Trump/Mnuchin will execute their plan with or without Watt.
What is Trump/Mnuchin plan? Are there any published details?
The FHFA is an independent government agency not under the direct, unilateral control of the President or Congress. There can be no forced takeover of the FHFA Director or the FHFA. There are other means available that reflect the checks and balances of this constitutional representative republic.
For an hypothetical example, the President of the US through the Secretary of Treasury can amend or cancel the Treasury's stated conditions, constraints and limits found in the Treasury's SPSPAs covenants and provisions approved by Henry Paulson and Timothy Geithner including those concerned with the Senior Preferred stock, the Senior Preferred stock pay down provisions, dividends and draws, commitment fees, the remaining 200+ billion dollar obligation, the warrants, and net worth sweep.
All of these conditions were formulated by the US Treasury under Section 1117 of HERA. They were merely agreed to and signed by the former FHFA Acting Director and former US Treasury official DeMarco. They can be rescinded, all or less, by the Treasury in a proposal to the FHFA.
Once these US Treasury constraining SPSPA covenants and provisions are removed or the SPSPAs declared null and void by the US Treasury in some manner, the FHFA Director can release the GSEs from the conservatorships with a stroke of a pen without the approval of the President or Congress. There is no need to overrun or trample on Watt. Public opinion and outcry and the gradual reduction of capital base towards zero and the dangers that process is currently creating should be sufficient motivation for the ready to retire Watt to release the GSEs from the conservatorships.
This is one, somewhat simplified hypothetical scenario for release from the conservatorships without considering recapitalization, congressional reforms or other issues.
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