FHFA must turn conservatorship directives into regulations before releasing the GSEs from conservatorship, according to former agency director Mark Calabria. But an explicit guarantee is unnecessary, he said.

Responding to written questions from the Senate Banking Committee, Trump’s new Treasury secretary gave the mortgage industry limited insight into his views on GSE reform.

Trump’s nominee for FHFA director has drawn strong support from some quarters, but also some reservations.

It was largely business as usual for Fannie Mae and Freddie Mac in the fourth quarter. But going forward, the Trump administration could make moves to reduce the two GSEs’ activity. (Includes data table.)

Given the financial and political hurdles that stand in the way of releasing Fannie Mae and Freddie Mac from conservatorship, it may be only a second- or third-tier issue for the Trump administration.

Lenders doubt the changes agreed to by FHFA and Treasury will hasten the end of the conservatorships; they may even delay it.

Treasury and FHFA agreed on some guidelines for how the process of getting the GSEs out of conservatorship will work. But they didn’t set that process in motion.

Even if lawmakers can’t agree on how or whether to release the GSEs from conservatorship, there are incremental steps they can take, according to former FHFA Director Mark Calabria.

The hedge fund billionaire predicts Treasury will write off its senior preferred shares in the GSEs and exercise its warrants for 80% of their common stock.

Some industry groups are calling for a legislative solution to ending the conservatorships; others say FHFA and Treasury can do it themselves.