The Treasury Department is delaying a report on the future of the government-sponsored enterprises from the end of January until mid-February. Meanwhile, Moody’s Investors Service is throwing its hat into the ring, arguing that the current model is not only unsustainable, but against government vision. Residential mortgage analysts at the rating agency say that keeping Fannie Mae and Freddie Mac in the current manifestation would create two scenarios. And both are not good. “If the GSE model is to be preserved, the companies would require far more capital and the risk premia on their debt would likely be much higher,” write the analysts in a report Tuesday. “This would, in turn, necessitate either significantly higher mortgage rates, in contradiction of the government’s first policy objective of providing affordable housing financing,” they continue, “or require much more financial backing from the government, defeating the second, fiscal objective of maximizing private-sector participation in the $5 trillion GSE mortgage market in order to reduce the risk of taxpayer bailouts.” The report quotes Federal Housing Finance Agency figures that show Fannie may end up owing the U.S. government between $14.7 billion and $23.2 billion in annual preferred dividends — even though the company has never earned more than $8.1 billion. Freddie may be on the hook for up to $10.4 billion to the Treasury. Freddie’s highest yearly earning was in 2002, when the GSE posted $7.1 billion in profits. “Clearly, the failure of the GSEs’ financial model, including their inability to service their preferred dividends over the longer term, mean that reform must occur at some point,” they add. Moody’s is maintaining its stable rating on the GSEs and predicts a window of 12 to 18 months for reform. “Although there are many directions GSE reform could take, we believe the likely path will result in the U.S. government supporting the senior obligations issued by the GSEs prior to the implementation of reform through their final maturities,” they conclude, “as well as the continuance of the effective credit substitution of the U.S. sovereign rating for these instruments.” Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.