If he is indeed going to follow the Facts sheet previously posted, he will begin the non-legislative steps. Which really isn't pretty for longs. I don't think he will ever get to the legislative steps.
B. Intermediate Steps to Transition to a New Housing Finance System: While bi-partisan legislation will be critical to creating a new housing finance system, non-legislative steps can be taken now to facilitate a gradual transition to the new system and to facilitate the wind down of Fannie Mae and Freddie Mac, including:
(Note:from the Facts Sheet)
Continue to aggressively wind-down Fannie Mae and Freddie Mac’s investment portfolios by at least 15% per year. This will reduce Fannie Mae and Freddie Mac’s holdings of risky mortgages and related securities to a manageable balance by 2018.
Accelerate a process of systematically reducing the government’s direct credit risk exposure by bringing private capital in front of the Fannie Mae and Freddie Mac guarantee. The government currently takes direct credit risk on more than 80% of all new mortgage originations, through FHA, VA, USDA, and Fannie Mae and Freddie Mac. There are two key approaches for reducing Fannie Mae and Freddie Mac’s credit loss exposure: 1) a capital markets approach in which private investors take on the risk of the portfolio’s first losses (a “risk syndication model”); and 2) an insurance approach in which well capitalized and regulated private institutions insure a portfolio of mortgages against default and collect insurance premiums (a “mortgage insurance model” or “MI”). The period of transition before Congress passes comprehensive legislation should be used to continue aggressively piloting these approaches to both reduce the government’s exposure and gain valuable insights about the most efficient ways to encourage private capital back into the housing finance system.
Prioritize the development of a common infrastructure / securitization platform that private actors can leverage. FHFA has directed Fannie Mae and Freddie Mac to pursue the important work of developing a common securitization infrastructure. This platform can also help facilitate securitizations by private companies by providing essential services and standardization which could help foster competition, better protect consumers, and increase investor comfort in investing in mortgage backed securities.
