Replies to post #500747 on Fannie Mae-No Politics (FNMA)

[YanksGhost]

Unless the XX for how much market share each guarantor can hold gets filled in with numbers to support F&F's 70% present share, this is a BOMB delivered on the heads of shareholders.

[RCChristian]

But the securities guarantees will be explicit and other competitors have access to this business. With explicit backing that means a high fee. 30 yr mortgages costs will spike. The GSE will no longer dominate the market in the future. So the bill just basically turns the GSEs to 2 big PMI companies.

[stoxjock]

"They make it clear fannie and freddie will (continue) to guarantee loans (i.e., private mortgage insurance). The PMI collected by borrowers is a major source of income/revenue stream for fannie and freddie."

I think you are failing to recognize that while they may have 'guarantor' revenues, the risks of 'guarateeing' far outweigh the benefits because under this proposal they will have much lower volume of the 'guarentee' business...