WASHINGTON, DC-Once the jokes about last week’s abortive RealShare were dispensed with--accompanied by Billy Joel’s "We Didn’t Start the Fire"--presenters at RealShare DC quickly got down to business. Kicking off the event was Walker & Dunlop’s CEO Willy Walker, who gave a no holds barred keynote on the direction Fannie Mae and Freddie Mac are headed according to a white paper put forth by the White House recently.

Not that it is necessarily a bad thing for multifamily, Walker told the packed room. “Multifamily should be fine,” he said. Essentially, if the residential finance market is fully privatized as the white paper suggests, lenders will target prime borrowers, cutting off at least 20% of the subprime borrowers who will move to rental markets. “For multifamily that is clearly an upside,” Walker says.

For the residential markets, however, shutting down the GSEs will have larger, unforeseen implications, Walker said. “This is already an era of volatility. The white paper suggests shifting that volatility even further off the government’s books and onto peoples’ backs.” For instance, he said, the 30-year fixed income mortgage will be all but dead under the white paper’s scenario.

Unfortunately, the GSEs are falling victim to politics--even though both political parties have alternatively used and then abused the institutions. Not that they haven’t made mistakes, Walker said. “It is clear that Fannie Mae caught the falling knife when it started to buy Alt-As a few years ago.” Still, he added, regulating a known--albeit flawed entity--is better than regulating a newly formed unknown entity.

“Hopefully, the government won’t screw it up too badly,” said CW Capital SVP Dee McClure, speaking at a later panel. “Multifamily is 5% of Fannie and Freddie’s portfolio, and it is their profitable side.” Such figures, McClure added, are starting to catch the attention of some in Congress. “This is a unique period for multifamily. What we need to do is educate the legislators on what the loss of the GSEs will mean.”