THE World Bank wants safeguards to help Hong Kong's stuttering securitised-mortgage market and suggests a safety-net insurance scheme for bonds. Support facilities were needed to allow for the issuance of securitised mortgages in the form of mortgage insurance or letters of credit, the bank said. The World Bank predicted that a mortgage-backed securities market using structures and market mechanisms - like those in the United States, Britain and Australia - would begin soon in Hong Kong. Mortgage-backed securities involve taking a group of home loans and pooling them, then issuing debt securities. Interest and principal payments on the underlying home loans provides the payment to investors in the debt securities. Mortgage-backed securities total about $3.5 billion in Hong Kong. 'The securitisation of residential mortgage loans would allow many mortgage lenders to reduce their balance-sheet exposure from mortgage loans and provide a means for some lenders to obtain funds for continued mortgage lending, the report said. 'In Hong Kong, as elsewhere, mortgage-backed securities must be furnished with credit supports to protect investors against unexpected credit losses. Moody's Investors Service warned earlier this month that securitisations appeared to have hit a wall in Hong Kong, the region's main supplier. The World Bank said bond investors needed protection also.