Ending GSE conservatorships a ‘show-me story,’ says BTIG

BTIG says a “considerable amount of our time is spent thinking and talking about” Fannie Mae (FNMA) and Freddie Mac (FMCC) because those “mortgage behemoths are integral to the housing market,” though with President Trump returning to office in just a few days there has been a pronounced increase in questions and conversations about whether the government-sponsored enterprise conservatorships will be ended. Following “years of missteps and no steps, ending the GSE conservatorships is a ‘show-me story’ with the first step being signs of policy alignment” at the Federal Housing Finance Agency and the Treasury Department, argues the firm, which needs to see signals of those two entities pursuing the same goal. The Treasury Department’s senior preferred position is “concrete on the top of FNMA and FMCC’s capital stacks,” which must be addressed, BTIG added in a note to investors.