I prefer to think of it the other way. Without the GSE we would no longer have a totally manipulated overinflated housing market and prices would be substantially cheaper and larger downpayments would be needed. We would have a painful one time housing market correction and what would emerge from the ashes would be a healthier housing market that would be valued correctly. We would also have a private secondary market that would demand stringent underwriting standards because there would not be an ultimate safety net that is taxpayer funded directly or indirectly.
It would hurt at first but be great in the long run.
