Calls for government-sponsored enterprise reform have gone on for years – but now that reform could be just weeks away from becoming a reality.

Earlier this month, Mel Watt’s time as the director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, officially ended.

The FHFA is now led by Comptroller of the Currency Joseph Otting, who was picked by President Donald Trump to serve as acting director of the FHFA while Mark Calabria is awaiting Senate confirmation to replace Watt on a permanent basis.

Now, Otting announced to the agency’s employees that the FHFA will release its plan within weeks to take the GSEs out of conservatorship, according to an article by Steve Goldstein and Andrea Riquier for MarketWatch.

From the article:

Joseph Otting, who is leading the FHFA as Mark Calabria awaits Senate confirmation, said at an all-hands meeting on Thursday that a plan to lift Fannie Mae and Freddie Mac out of the conservatorship that has permeated the institutions since the financial crisis will soon be announced, according to an attendee of that gathering.

A spokesperson for the agency confirmed there was discussion about ending Fannie and Freddie conservatorship but denied there was any talk of timing or details.

And now, Fannie and Freddie shares are skyrocketing. Fannie Mae saw its shares increase by 31% to $2.37 and Freddie Mac increased 24% to $2.25 at 2:05 p.m. in New York, according to an article by Joe Light for Bloomberg.

From the Bloomberg article:

The increases were the biggest since November 30, 2016, when then-Treasury Secretary nominee Mnuchin first said getting the companies out of the government’s grip was a priority.

Back in September 2017, during a Politico Policy Summit in Washington, U.S. Department of the Treasury Secretary Steven Mnuchin said GSE reform would be addressed in 2018. Obviously, this didn’t happen.

During an interview with Fox Business in May 2018, Mnuchin confessed that reforming mortgage giants Fannie Mae and Freddie Mac probably wasn’t going to happen that year, and isn’t a priority for this Congress.

However, he did tease that once Watt’s term expired, the administration would select someone more focused on GSE reform.

And experts think the nomination of Calabria to lead the FHFA could kickstart discussions on GSE reform.

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