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.

Mortgage industry stakeholders discussed what happens to the UMBS, LLPAs and capital rules if shares in the GSEs are sold without letting them out of conservatorship.

The Trump administration continues to tease a 2025 capital raise for the GSEs but industry experts remain skeptical this can be done in a safe, sound manner.

Although FHFA Director Bill Pulte recently put the value of the GSEs at $1 trillion, most estimates are between $300 billion and $600 billion. Meanwhile, Commerce Secretary Howard Lutnick suggested that only a small portion of the GSEs will be sold via a stock offering.

Industry insiders worry that mixed signals from the Trump administration makes complex decisions, like ending the conservatorship, more difficult.

Mortgage rates and MBS spreads may depend on how the White House structures the proposed IPO for the GSEs and how markets react to a potential merger of the two mortgage giants.

Although President Trump didn’t specifically mention a merger, that appears to be the implication of the post.

There’s no consensus on how the Trump administration’s effort to end the conservatorship of the GSEs should address senior preferred shares in Fannie and Freddie.

Advocates for GSE reform offered the Trump administration some useful guardrails to consider as it plots ending the conservatorships of Fannie and Freddie.

Republicans may hope to use any windfall the government gets from selling its stake in the GSEs to offset revenue cuts in their “Big Beautiful Bill,” but housing advocates have other ideas.