“By default, the only business that can be privatized is new guarantee business,” Rajadhyaksha said. “But agency MBS buyers, especially in foreign countries, are likely to be unhappy about the prospect of new agency MBS that is not backed by the US government. While we are not sure that the administration is thinking of a mortgage world without government backing, the mere possibility should make some MBS investors nervous.
Gosh, shame on the govt for thinking MBSs should be priced by the market! Let me guess…mortgage rates would be a tad higher than the 4-6% we’ve seen during “The Worst Housing Downturn Since the Great Depression”!
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