Fannie, Freddie and FHLB's are providing funding for now.

Implications: Through mid 2008 these will continue to be the drivers of home loan financing. Coming up quickly will be HUD/FHA. The unkown related player will be community banks, credit unions and small regionals. There is a problem that is already surfacing, add on fees by the banks using these groups for funding.

Analysis: From mid 2007 to present day and through mid 2008, Fannie, Freddie and FHLB's will continue to be the main players. Coming up behind them will be FHA, particularly if they can get a refinance program that will work (reguiring existing loan holders to write down first will only have minimal to moderate success).
FHA will be what it was before sub-prime, the home of first time buyers and others without the credit file to get a Fannie or Freddie loan.
The savings & loans and credit unions are already getting involved in their local markets and gaining share in jumbos and local loans.
The problem will develop over the additional fees and requirements being layered in. Fannie and Freddie are requiring more equity and downpayments. Banks are charging additional fees on loans to increase margins.
The drive to get a higher return is to offset infrastructure expenses that can not get by on the low returns provided by these funding sources. It is hard to support a retail environment on the spread on a Fannie loan. Just ask Countrywide, particulalrly when they were designed for sub-prime spreads. It is only a matter of time before someone is denied credit based on these additional fees and the subsequent litigation will prohibit the exercise going forward. The industry is still not a fast learner.