No need to privatize in my view of it. Just drop the conservatorship and continue doing business as is being done now. The preferred and common stock will continue to trade publicly as it does now. The pps share will rise.
All the talk of reforming the GSEs has to do with past resentment of loss value, fear of another housing disaster and disruption of the housing finance market and system and political control and regulation over a multi-million money making machine.