Bill Ackman’s plan calls for Treasury to forgive its senior preferred shares, a strategy that some industry observers say would be politically risky for President Trump.

Securities industry stakeholders say preservation of the secondary mortgage market, especially MBS futures trading on the TBA market, is essential to keeping mortgage rates low.

In the early years of Fannie/Freddie conservatorship, investors were seeking an explicit guarantee of GSE MBS as part of any reform effort. More recently, they have shown an acceptance for maintaining an implicit guarantee.

Key mortgage industry stakeholders say an IPO of GSE stock would have trouble attracting investors if FHFA remains their conservator or they are released without an explicit guarantee.

Changes to Common Securitization Solutions, including being renamed U.S. Financial Technology, appear to set the company up to serve additional secondary mortgage market participants.

President Trump attempted to mollify concerns about the post-conservatorship guarantee of GSE MBS, but questions remain about the regulatory treatment of those securities and the TBA market.

Participants in the agency MBS market said if the Trump administration wants to release the GSEs from conservatorship, it should be done in a way that preserves many of the functions currently provided by Fannie Mae and Freddie Mac.

GSE watchers believe that, to appropriately compensate the taxpayer for their government guarantee, Fannie and Freddie would have to pay a commitment fee as high as $46 billion a year.

Three former CEOs of the GSEs this week debated the impact of federal conservatorship, what steps must be taken to safely end the oversight and what the GSEs should look like afterwards.

If the GSEs are released from conservatorship, some participants in the agency MBS market insist the to-be-announced market, uniform MBS and Fannie/Freddie CRT activity should remain untouched.