Fannie Mae-No Politics (FNMA)

[kthomp19]

in that scenario the entire real estate market goes tits up

Not necessarily. Mortgage rates would spike, and the 30-year fixed-rate mortgage would be all but dead. There would be plenty of banks willing to fill the gap....for the right price.

But nobody could actually stop the new director from doing it. Currently the director is still only firable for cause.

Even if the director could be fired at will, Trump is picking that person anyway. If Mnuchin wants the companies gone he will ask Trump's permission to pick an anti-GSE director. Then if Trump says yes, he won't remove that director.

I don't think this is particularly likely, but it scares me how easy it would be. Trump's approval ratings keep going down and with a divided Congress he will have a much harder time getting his policy agenda accomplished. He's just the kind of person who would say "screw it" and burn down everything.

Bright is just the kind of person who would try and find a way to run FnF through receivership and pass their business on to Ginnie to finally kill the GSEs without disrupting the market too much.

Not to mention the consolidation of the outstanding debts on the balance sheets of the GSEs.

Well, the GSEs would be gone. I think you're right that if Ginnie absorbs that business, the debts (and assets) would have to be consolidated on the government's balance sheets. If the private market is left to pick up the slack that wouldn't happen.

So do the rules matter or don't they

Which rules?