A white paper released yesterday by the Milken Institute said the Federal government should allow other mortgage finance-related companies to compete with Fannie Mae and Freddie Mac on a level playing field. The GSEs should also move back into private hands, the paper argued.   

Private capital would then stand in front of a secondary government guaranty on MBS, according to the white paper titled Reform of the GSEs and Housing Finance. The paper was written by Milken Institute Senior Fellow Phillip Swagel, a professor at the University of Maryland School of Public Policy and former senior official at the U.S. Treasury during the financial crisis.

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