Perhaps the most important aspect of the 37 comment letters filed with FHFA on GSE risk-share options is the breadth, depth, and business focus of so many submissions.  This reflects widespread expectations  – correct in our view – that GSE reform in 2017 will take the shape either of de jure establishment of a risk-share structure as the U.S. mortgage-finance construct or continued de facto reliance on risk shares through Fannie, Freddie, and – to come – the Federal Home Loan Banks.  The scope of these comments also lays bare the profound competitive consequences of this new-style residential-finance system, the critical importance of capital rules as a success determinant, and the challenges confronting private MIs in this emerging framework.

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