It depends which way they go. It sounds like, in option 1, the government will guarantee only veteran's home loans and low-income loans (as opposed to owning 92% of the market as they do now.) In #2, there would be no formal gov't intervention except if the market froze. (I kinda hate this one.) In #3, you get a bunch of little FMs who are explicitly guaranteed by the feds, and who pay for that privilege.
The biggest difference is that we won't have the government swearing up and down that "The FMs are private companies and the government doesn't back their guarantees" when everybody knew that Uncle Sam would rescue the FMs if they went belly-up. Oh and look, they did. And he did.
An explicit guarantee that the feds get paid for is better than an implicit one that they don't, but the whole market acts like it exists anyway because the companies are gov't chartered and have a cozy relationship with numerous Congressmen.
no subject
The biggest difference is that we won't have the government swearing up and down that "The FMs are private companies and the government doesn't back their guarantees" when everybody knew that Uncle Sam would rescue the FMs if they went belly-up. Oh and look, they did. And he did.
An explicit guarantee that the feds get paid for is better than an implicit one that they don't, but the whole market acts like it exists anyway because the companies are gov't chartered and have a cozy relationship with numerous Congressmen.