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The WSJ told readers:

“because the banking sector isn’t large enough to hold more mortgages without expanding its deposit base, securitization markets are an integral part of any lending expansion.”

The problem with this assertion is that one of the main reasons that the banking sector doesn’t have a larger deposit base is that investors can buy government insured mortgage backed securities. If the government reduces or eliminates its role in this market, then investors will have to look for alternative places for their money, such as bank deposits. So, rather than filling an unavoidable gap in private financing in the mortgage market, the government is helping to create this gap.