Fannie Mae (FNMA)

[BaGr]

Can someone explain this to me.

https://www.bloomberg.com/news/articles/2017-12-18/trump-real-estate-investors-get-last-minute-perk-in-tax-bill

If in 2005 private companies had 55 percent of the market and F&F had 45 this makes no sense.

If no rivals develop, the mortgage-finance giants could remain where they are now: under government control.


Senator Mark Warner, a Democrat from Virginia.Photographer: Andrew Harrer/Bloomberg
A plan being developed by Republican Bob Corker of Tennessee and Democrat Mark Warner of Virginia would lower barriers to entry by removing some advantages Fannie and Freddie now possess. The goal is to create a system sturdy enough to withstand the failure of any one company and avoid a rehash of the taxpayer rescue that occurred during the 2008 financial crisis.

“If you want to eliminate too-big-to-fail, you need to have enough guarantors that you’d really let one fail in the event of a downturn,” said Mortgage Bankers Association President David Stevens, who served as Federal Housing Commissioner during President Barack Obama’s administration.

Because there’s no guarantee that the changes will be enough to attract competitors, the senators have come up with a fail-safe: Fannie and Freddie will stay within the government’s grip unless new companies enter the business of backing the mortgage market, according to people familiar with the matter.