Replies to post #463815 on Fannie Mae-No Politics (FNMA)

[RickNagra]

I am all for allowing competition in the secondary mortgage market. That’s because it makes no difference. It’s all semantics. Fannie and Freddie will continue to dominate because they have been in the business for 50-80 years. They know what they are doing. They will have the large capital buffers in place. It is going to be very difficult for new competitors to enter the field. For starters the capital requirements are just too big. Case in point the GSEs need to raise $181B. Secondly the competitors would be highly regulated by the FHFA or some other regulator. I suspect at most the combined competitors to gain 10% of the market share if that. But it makes Congress happy so be it. Who cares. And thirdly I am not sure if TBTF banks would even be allowed as competitors because they are part of the primary mortgage market. There is a conflict of interest. Consequently share price should start to go up now as more and more investors start to digest the news and read my posts. I am WhaleBalls.