Here’s an excerpt, with emphasis added, from the Bush Administration’s 2004
“A secondary mortgage market affords two principal advantages. First, it lowers the cost of mortgage finance by allowing credit risk and interest rate risk to be separated and borne by those best able to bear it. Second, it levels the cost of finance by connecting local housing markets to international capital markets so that borrowers have access to the lowest cost funds, not just those available locally. As mentioned above, a credit enhancement for lenders in a secondary mortgage market would provide them a liquid source of funding by permitting lenders and investors to easily sell and buy bundles of mortgage loans without regard for the underlying credit risk. Establishing a secondary mortgage market would require a governmental entity, similar to Ginnie Mae, to underwrite a security instrument backed by mortgage loans and guarantied against loss from credit risk that could trade in international capital markets.