The Treasury Department is due to deliver its recommendations on Fannie Mae and Freddie Mac reform in the coming weeks. Residential mortgage bond analysts at Credit Suisse say they expect the de facto guarantee the government-sponsored enterprises currently carry to become set in stone, explicitly leaving the U.S. and the American taxpayer on the hook for any losses. It's a move large bond investors, such as PIMCO, have sought for some time. "The absence of such a feature could significantly widen MBS spreads and result in outperformance of GN/FN swaps," said Credit Suisse analysts Mahesh Swaminathan, Mukul Chhabra and Qumber Hassan. In the meantime, they recommend investors hold long MBS basis trades "given what we believe are cheap valuations. The trade is down 5+ ticks since inception." Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.