Donald Trump’s Treasury secretary nominee, former Goldman Sachs executive Steven Mnuchin, says he and the president-elect want to privatize the home-mortgage market and “will get it done reasonably fast.” That’s good news for American homeowners, the economy and taxpayers who were forced to foot the bill after the 2008 subprime mortgage meltdown.

For those familiar with global mortgage markets, this is not a radical proposal. The private sector provides mortgages in most major countries, and there is little difference in the share of homeownership between the U.S. and other developed countries. No other country has the equivalent of the private-public model of Fannie Mae and Freddie Mac—crony capitalism at its best.

The U.S. needs a new mortgage system that preserves the value that currently exists with Fannie and Freddie, never places taxpayers at risk again, promotes homeownership at affordable levels, and transitions to a new private model without disrupting the housing industry. Congress will also need to resolve the issues with shareholders of Fannie and Freddie resulting from the Obama administration’s unilaterally changing the terms of conservatorship in 2012 by seizing their capital and future profits.

Mr. Mnuchin won’t have to start from scratch. Positive steps have already been taken. Back office and securitization functions of Fannie and Freddie are being combined to increase efficiency. Fannie and Freddie’s huge portfolios are being reduced (albeit much of the reduction has been added to the Federal Reserve’s portfolio). The companies have also repaid taxpayers more than $240 billion against their $187 billion bailout.

Yet many politicians and industry participants believe that housing cannot prosper without government support. We disagree. The U.S. cannot afford to go through another financial crisis, which started with subprime mortgages and would never have been so large if the residential mortgage industry had been market-based.

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