Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• STRIPPED MORTGAGE-BACKED SECURITIES (SMBSS)
  
  Mortgage securities that separate principal and interest payments from the underlying mortgage-backed securities. SMBSs can take four forms: interest-only strips, called I/O strips; principal-only strips, called P/O strips; discount strips; and premium strips. I/O and P/O strips are the more common of the four. Today, REMIC CMOs are used far more frequently than SMBSs to create securities with the same cash flow characteristics.
  
  Back