South Korea is set to launch a quasi-governmental mortgage corporation that will likely be the country's first issuer of mortgage-backed securities, the first step in its long-stated goal of creating a liquid secondary mortgage market.

The Korea Mortgage Corporation's (KMC) first target will be to securitize assets of the National Housing Fund, the country's biggest provider of mortgages, said Kwon Kyung Won, head of the KMC's business planning team in Seoul. "The government wants to securitize its portfolio through the KMC, which is why it is being set up at this time," he explained. Ultimately, the KMC's goal is to increase affordability of home mortgages for low to middle-income citizens, he added.

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