If banks can't sell the mortgage quickly (to likes of FNM) then they won't be offering any such mortgages. A mortgage is a long term loan, and banks just don't have the capital to freeze it for 30 years.
As result, a common man can't get a mortgage. Houses will be bought for cash only, which eliminates new homeowners, and those who want a larger house (or in a more expensive market.) The average price of a typical home will drop somewhat, following the lack of buyers. This will result in "house as an investment" schemes being thrown out of the window, and most people will see their assets reduced. Those who still pay mortgages may be forced to send the jingle mail (lose the house) because the property is no longer worth owning and paying for.
If banks can't sell the mortgage quickly (to likes of FNM) then they won't be offering any such mortgages. A mortgage is a long term loan, and banks just don't have the capital to freeze it for 30 years.
As result, a common man can't get a mortgage. Houses will be bought for cash only, which eliminates new homeowners, and those who want a larger house (or in a more expensive market.) The average price of a typical home will drop somewhat, following the lack of buyers. This will result in "house as an investment" schemes being thrown out of the window, and most people will see their assets reduced. Those who still pay mortgages may be forced to send the jingle mail (lose the house) because the property is no longer worth owning and paying for.
I understand your point completely. My question to him was how his mortgage being owned by either Fannie Mae or Freddie Mac was going to affect his mortgage.
He answered none which of course is correct.