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71 is set to expire in 2021. However, the Mortgage Bankers Association doesn't want the QM Patch expire without a defined plan for creditworthy borrowers who don't reach the QM's 43% debt-to-income ratio. Sharga also expects the GSEs to leave conservatorship, though any changes to how the GSEs operate will need to be done gradually, with much thought and consideration, he said. "e whole trick is to move them out in a way that protects taxpayers and enhances consumer access to credit." Sharga added: "ey will need more oversight than before. ey need better controls for credit risk than they had before." Sharga said he also wants to see a more level playing field for community banks and credit unions with any restructured GSEs. Regulators want to make sure GSEs "aren't over their skis" when they leave conservatorship, added Garber, who expects the process to move forward once the capital rule is defined. Rossi and several others said that one of the big questions that remains is whether post-conservatorship Fannie and Freddie will offer implied government guarantees. Horne added that leaving conservatorship would likely lead to increased consolidation in the mortgage market. In the unlikely event that there's no path for the enterprises to build sufficient capital, statutorily they will be required to be taken into receivership, Rood added. is will force the outstanding lawsuits and investors to settle disputes or, if the lawsuits are too much for the entities to bear, face a receivership. He thinks the first scenario is much more likely. "We believe it's likely that the GSEs will maintain a UST backstop and access to a line-of-credit. e QM patch will likely expire in Q2 of 2021 (following an extension of the patch), and QM will likely be amended in ways that are aimed at luring private capital back into the housing market," Rood said. "If this happens, the safe-harbor advantage the GSEs experiences today would be removed and greater competition from private players would likely arise." "In the new age (post-conservatorship), we will see the GSEs and private market compete more directly," Garber said. Whether the GSEs leave conservatorship entirely or are little changed in the next few years, their status will certainly change. But whether an implied government guarantee will still exist is still a matter of some debate. If it still does exist in a new GSE environment, private lenders are unlikely to pick up any slack the GSEs leave as they change. As the GSE environment changes, it also remains to be seen if it will result in tighter or looser credit, which would have a direct effect on the housing market, said Rohit Gupta, President and CEO of Genworth Mortgage Insurance. He also pointed out that any changes should be made when the market is strong. "A down cycle is a bad time to do reform." "ey need to have complete transparency across the mortgage market," Gupta added. "It's important to have a functioning and transparent mortgage market. Any reform needs to provide better [protections] to ensure a stable financial system." Phil Britt started covering mortgages and other financial services matters for a suburban Chicago newspaper in the mid-1980s before joining Savings Institutions magazine in 1992. When the publication moved its offices to Washington, D.C., in 1993, he started his own editorial services room and continued to cover mortgages, other financial services subjects, and technology for a variety of websites and publications. "You can't just unplug them; a lot of things could happen. The chances of getting it wrong are too high." —Steve Horne, CEO, Insight One