A private securities market set up exclusively for prime mortgages can be developed and attract investors as Fannie Mae and Freddie Mac are phased out, according to three American Enterprise Institute fellows.

The AEI plan, unveiled Thursday morning in Washington, calls for securitizing strictly defined prime mortgages backed by private mortgage insurance. Other mortgages could not be placed in public securities that are registered with Securities and Exchange Commission.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.