Analysts from Keefe, Bruyette & Woods have highlighted significant obstacles to the privatization of Fannie Mae and Freddie Mac, focusing on the government's investment equity and required capital standards. They emphasized the need for adjustments to achieve a return on equity of double digits, as current standards hover around 8-9%. The ongoing reliance on government backing complicates the transition, and the Mortgage Bankers Association supports an explicit government guarantee during this process to ensure stability in the housing market. Communication from the Treasury remains crucial for any potential return to pre-Great Financial Crisis norms.
Analysts believe serious hurdles to privatization of Fannie Mae and Freddie Mac exist, particularly regarding the Department of the Treasury's investment and potential capital standards.
Bill Ackman argues that the government could forgive the GSEs' investment, considering they've repaid $310 billion in dividends after drawing $193 billion in support.”},{
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