A couple of thoughts on when the conservatorship will end. Still pretty sure that it will get ended after November midterms are over (mostly because Mnuchin said so).
The key reason is possibly that any efforts to free FNMA and FMCC will have such a major blowback on the GOP that candidates will have to answer tough questions during debates (not forgetting that the GSEs are antithetical to the GOP's free enterprise policy stance). How many seats will be lost to the Democrats if GOP candidates start on the back foot in debates, having to justify how hedge funds got enriched from a supposed GOP (more like Mnuchin) policy.
By waiting until November/December, Mnuchin can do whatever he wants without jeopardizing the GOP during elections. This will get amplified by his ally Joseph Otting becoming FHFA director in 2019 (my guess, based on the latest rumor indicating that the next FHFA director comes from OCC). At that point, Treasury and FHFA will have essentially the same views on housing finance reform, even more so than the current "eye-to-eye" views between Mnuchin and Watt. Essentially, we're waiting on administrative action once the elections are done, because Mnuchin can't risk the GOP (and by extension, Trump) through unilateral action until then.
Administrative action is probably the ideal approach for shareholders, because we all know that Congress has already spent (wasted) almost 10 years discussing the future of housing reform, and nobody wants to take responsibility for what happens. Mnuchin (and Otting (?)) don't have that worry because their futures are tied to Trump, and not the electorate. Doesn't matter what they do outside of an election year. GOPers and Democrats can criticize them for whatever happens with FNMA/FMCC, but it'll just be posturing for voters (or pushing blame to each other's party). Mnuchin will get the blame for it, but who cares? Ain't nobody voting him out of office anyway.
Still, the big question is what happens to shareholders once the conservatorship ends. Anything is possible, ranging from a full recap/release to a full receivership scenario. Somewhere in the middle is the most likely answer. Anything outside of that is just a guess.
As a side tangent, I don't understand the commons-vs-preferred "fight" on this board. Most of the decisions are made by people who don't visit online message boards. As individual retail shareholders, we really have no say at all. We're just sitting on these securities to make some money in the hope they don't end up worthless. Commons have more upside, with more uncertainty (higher risk, higher returns). Preferred have less upside (as the max is par value) but slightly more certainty. Pick one, or pick both, depending on your risk tolerance and expectations.
I'm holding on to my 11,982 FNMA and 1,880 FNMAS shares until the very end. This allocation was created to ensure that, in the possible scenario where commons are cancelled and preferreds are made whole, I'd break even on the entire deal. My favored outcome is (obviously) for commons and preferred to both maximize value. The 20%-30% losses I've endured since becoming a shareholder have been painful, but I believe that we'll see some decent returns come year-end. GLTA!