Replies to post #440463 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

Small lenders are very apprehensive about disruptions to the marketplace, so the idea of winding down or dismantling Fannie and Freddie amounts to what we think is a huge disruption potentially, so we would have a lot of difficulty getting on board with that,” said Glen Corso, executive director at the Community Mortgage Lenders of America.

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There has also been ongoing pressure from hedge funds which bought stock in Fannie and Freddie after they were seized by the government. They would stand to gain significantly if the GSEs were spun out from conservatorship and returned to private control. Hedge funds appear to have successfully lobbied some senators on the issue, making striking a deal difficult if Fannie and Freddie are eliminated.

“We see the shifted … stance toward a continued GSE role and some concessions to shareholders as potentially reducing or removing barriers to reform,” wrote Charles Gabriel, an analyst at Capital Alpha Partners.