MBS in Colombia may receive a two-fold boost as an injection of funds into the mortgage lending system combines with new legislation intended to increase the system's stablilty, experts in the U.S. and Colombia said.

The new funds will come via a government scheme that will force financial institutions to buy government debt-reduction notes (TRDs), a five-year zero coupon instrument. The money raised will be passed to Housing and Savings Corporations (CAVs), for them to on-lend as mortgages.

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