SAN DIEGO-The GSEs will continue to play asignificant role in multifamily housing,although it be up to five years before we know how that role willchange, says Gordon Gerson of Gerson LawFirm APC here. GlobeSt.com caught up with Gerson todiscuss his vision of the GSE's ideal role, the role ofprivate equity and the negative consequences oftoo great a dependence on the GSEs in multifamily housing.

GlobeSt.com: In your opinion what would be the idealrole for the GSEs in multifamily housing?

Gerson: With respect to the idealrole, the GSEs have actually fulfilled the ideal role throughoutthe last five years. They've been a market leader during aneconomic down cycle when other multifamily lenders left the market,and during that time period they served the entire multifamilymarket. When I say that, I mean all sectors of the market. As oureconomy trends upward, and other lenders have returned to themarket, the GSEs have been a market leader, lending in areas thatother capital providers are not entering. I think the model needsto change a little bit. For instance, there have beenFannie Mae and Freddie Mac loansin areas like Newport Beach in recent years when no one else wouldlend or when debt was very difficult to obtain during that timeperiod. However, now, when debt is still difficult to obtain inareas such as Riverside County, the GSEs can be a market leader inthose areas. In bad times, the GSEs are a market leader by beingeverywhere; in good times, they will go to a much larger degreethan others will.