The housing finance reform bill introduced by US Senators Tim Johnson and Mike Crapo could be key to unlocking the private-label residential mortgage-backed securities (RMBS) market, according to Moody’s Investors Service.

Under the bill, a new agency, the Federal Mortgage Insurance Corporation (FMIC) would provide a government backstop for eligible mortgage pools that have secured a private first loss piece of 10% through FMIC-approved risk-sharing mechanisms.

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