Goldman Sachs says the emergence of the Federal Home Loan banks' Mortgage Partnership Finance program as an alternative to Ginnie Mae has contributed to the recent volatility of Ginnie's mortgage-backed securities.

Goldman cited the direct competition from the banks, the resulting scarcity of Ginnie securities, and uncertainty about how Ginnie will handle the competitive threat. Profit-taking by some traders late last week also whipsawed Ginnie prices, Goldman said in a research report issued Friday.

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