Market experts and participants are uncertain as to just how capable the private sector is to step in and replace Fannie Mae and Freddie Mac, as legislative initiatives to deal with the government-sponsored enterprises and reform the non-agency MBS market gain some momentum in Congress. “I think the problem so far has been the fear that the flow of credit would dry up if we try to extract the government from the mortgage finance system. With $5 trillion in GSE/agency debt out there, it’s a compelling fear,” said Ralph Daloisio, a managing director of the New York-based structured finance group of...