Ginnie Mae plans to start guaranteeing interest-only and principal-only strips next year, according to sources and a published report.Fannie Mae and Freddie Mac have guaranteed IO and PO strips since the 1980s, and the move is expected to fill out Ginnie Mae's product line and generate more demand for Ginnie Mae mortgage-backed securities. Ginnie Mae President Ronald Rosenfeld announced the decision to offer the new products at a Dec. 17 anniversary party for the U.S. government agency, which was created 35 years ago. Ginnie Mae has guaranteed the issuance of more than $2 trillion in MBS since it was created in 1968. In fiscal year 2003, it guaranteed $215.8 billion in securities backed by Federal Housing Administration and Department of Veterans Affairs loans. Ginnie officials are reportedly going to work with investors and issuers to engineer the IOs and POs. Ginnie Mae had not made an official announcement about the new products as of MortgageWire's deadline, and few details were available. Ginnie Mae's decision was first reported by Reuters. Ginnie Mae can be found online at http://www.ginniemae.gov.
