I'm not an economist but....

This quote by the smartest bond guy I know seems to indicate the cost of capital for both these GSE's will get cheaper due to EXPLICIT guarantee of capital by the government thereby making bonds by the GSE's comparable to treasury debt. If cost cheaper then shouldn't this lower cost of mortgages? The secondary market is now cheaper for the entire mortgage community. Bill Gross, who manages the $130 billion Pimco Total Return Fund, also said he expected regulatory changes for Fannie and Freddie that could make their bonds "look more like Treasuries in terms of yield and credit quality, as will the mortgages that bear their name."