It was Glen Bradford's article on Seeking Alpha that thought Freddie might not need a draw for that reason. Tim Howard's comment was in response to a question about that.
I think actual liquidation chance is just north of zero. The only risk of that type I give credence to is the formation of new companies with assets and liabilities being transferred over, but shareholders left with equity in the old worthless company. Even that is pretty unlikely in my view because the new companies would not have the Congressional charters. It would also kick off a whole new round of lawsuits because the NWS being unwound or not would affect the payouts to difference classes of shareholders drastically.
Agree that the Dodd-Frank stuff won't have a direct effect on FnF. But between it, Treasury's "Chapter 14 Bankruptcy" paper, and Trump's EO directing to Treasury to investigate how to prevent bailouts, I would imagine that getting FnF recapped is on their short to medium term list. It all goes hand in hand.
That assumes no new shares are issued, the proceeds from which would contribute directly to a recap. It depends on how quickly Treasury wants the process done. A full recap through retained earnings alone would take roughly a decade, theoretically "leaving taxpayers on the hook" that whole time.
While that last bit is technically true, and thus will be used by politicians mercilessly, it would be a decreasing commitment by Treasury over time. Pollock's piece recommends a recap through retained earnings with Treasury's funding commitment being set equal to the difference between a full recap amount and whatever capital FnF already have. This would decrease over time (dollar for dollar equal to FnF's net earnings) and FnF would pay a fee based on the amount left.
It's a fair solution but it leaves the door open for Congress to act before FnF are fully recapitalized. It also means higher chances of a bailout in 3-4 years if another big downturn hits; FnF would not have had enough time to build enough earnings to absorb a loss like that. Thus I think FnF issuing more shares to recap faster is a distinct likelihood because it makes for better politics, and politicians are the ones making the decisions.