The Federal Housing Finance Agency (FHFA) has the expertise to set servicing, underwriting, and mortgage securitization standards that could lead to the development of a private-label MBS market, according to the GSE regulator.

FHFA acting director Edward DeMarco told a House panel Thursday that his agency could set the credit risk standards for private mortgages, allowing for efficient pricing for "deep pools of homogenous mortgages," as directed by a bill sponsored by Rep. Scott Garrett, R-N.J.

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