Given the chaos surrounding the debt ceiling, we think it timely to remind clients of what would happen to the mortgage market if worse comes to way worse. In our view, nothing immediately cataclysmic would happen (especially in the context of everything else that would then ensue). But, any deal delay hammering out a ceiling increase will throw Fannie and Freddie into receivership or bridge status – potentially disruptive options even if not immediately cataclysmic ones.

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