Fannie Mae (FNMA)

[Donotunderstand]

indeed

they would take out of the market 1000s of local banks

the market would be monopolized by 3-4 large TBTF banks

the amount of loans would drop by say 30-40%

housing prices would definitely drop as it will be hard to sell to some one who could qualify for a mortgage

then the TBTF banks would get greedy v just cautious

they would charge near usurious rates to normal middle class buyers

or

they would again get into the game of interest only loans - balloons - and 80 10 10

kiss the housing market as we know it good bye