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Shares of Fannie Mae and Freddie Mac fell Friday morning after the Trump administration laid out its vision for releasing the mortgage giants from more than a decade of federal control.

Analysts said the report represented progress, but cautioned that it offered scant details, warned that any change will likely take a long time, and probably depends on bipartisan efforts in Congress and President Trump winning re-election.

House Financial Services Chair Maxine Waters was an early critic, saying on Thursday that the proposal would hinder homeownership and could cause “significant damage for low-income persons and communities of color.” Investors will watch a Sept. 10 Senate Banking Committee hearing on the future of housing finance, where Treasury Secretary Steven Mnuchin and Federal Housing Finance Agency, or FHFA, director Mark Calabria are are scheduled to testify.

Fannie and Freddie common shares both sank as much as 15% in early trading, the most intraday since June 10. Fannie shares have rallied 145% so far this year, while Freddie’s have gained 137%, largely due to shareholder optimism change is coming.

Here’s a sample of analyst commentary:

Compass Point, Isaac Boltansky

“The plan is directionally positive for shareholders and the broader effort to end the conservatorship,” Boltansky said via email. “The report may be light on details compared to the expectations of some market participants, but we shouldn’t miss the forest for the trees.”

The Trump administration, he said, “appears committed to action, so this story is still about timing, execution, and political will.”

FTN, Jim Vogel

“The plan weds the federal government to Fannie, Freddie, and single-family housing finance to roughly the same degree they’ve been locked together for the last four decades,” Vogel wrote in a note. “Although it claims not to be, the report contemplates as much intrusion as the previous system (1970s to 2008) and the existing one. That may not doom the plan, but it does introduce doubt about its adoption or its success.”

Odeon, Dick Bove

The proposal certifies the “continued existence of Fannie Mae and Freddie Mac,” arguing they “should be recapitalized and released from their conservatorship,” Bove wrote. “Recap and release” refers to the process of bolstering Fannie and Freddie’s ability to absorb losses and then returning them to private shareholder ownership.

Bove flagged “multiple winners,” including investors in preferred issues, who “are about to make a great deal of money.” Other winners: Wall Street, which “may be about to raise the largest amount of money in its history for what would now be private companies,” and the banking industry, which may get the “right to set up secondary mortgage companies that would compete with the traditional” government-sponsored enterprises, if Congress agrees.

“Everyone could make money here including the taxpayers, the United States economy, the housing industry, holders of GSE preferred issues, and possibly even the investors in the GSE common shares,” Bove said. At the same time, he cautioned, “the road to making this happen will not be without numerous road blocks.”

Cowen, Jaret Seiberg

“The White House plan for the future of Fannie and Freddie defers often to Congress to act,” due to “political and good government reasons,” Seiberg wrote.

“Despite the request for legislation, we believe Team Trump has kept the door open to administrative action. And we see Team Trump as prepared to push recap and release.”

AGF Investments, Greg Valliere

“Hats off to the Treasury Department for at least beginning the process of reforming Fannie Mae and Freddie Mac,” Valliere wrote in a note.

“But the plan released yesterday was short on details and 1 / 8is 3 / 8 certain to encounter opposition in the House, where Democrats want to focus on affordable housing, not freeing the agencies from government control.”

Valliere added that much depends on Congress, but “there’s a possibility of regulatory reform” by the FHFA. That agency is “filled with Trump loyalists,” and may “end the conservatorship that Freddie and Fannie were forced to enter after the financial crisis a decade ago.”

Even so, Valliere doubted any FHFA reforms would “pay imminent dividends to hedge funds and other investors who have been betting recently that there could be a resolution finally of who gets the agencies’ profits. Anything that might look like a shareholder give-away would ignite a firestorm in Congress and could become a political liability for Republicans who already are worried that housing is an issue that could work against them in the upcoming election.”

KBW, Brian Gardner

“In our view, the reports contained little new information,” Gardner wrote. “While Treasury recommended ending the conservatorship and the net profit sweep, there is no clear timelines for doing so and we can envision a scenario where the sweep and the conservatorships last into 2020 and possibly beyond.”

Capital Alpha, Charles Gabriel

“We now urge caution in assuming how quickly and clearly a recap and release’ plan might proceed, particularly with GSE critics and Hill supporters of the banks demanding tricky reforms that could upset any balance or produce negative optics along the way,” Gabriel wrote.

He saw “both positives and negatives for stakeholders and policymakers, with Treasury Secretary Mnuchin arguably creating a roadmap,’ more than a blueprint,’ with many possible detours designed as political gestures or accommodations along the way.”

For investors in common and preferreds, “the outlook seems confirmingly positive, albeit with uncertainty for timetable and crucial tumblers’ falling into place.”

Beacon Policy Advisors

The blueprint is “long on words, short on new details,” Beacon wrote in a note.

“Although the menu of potential administrative changes to the GSEs is now on the table, there is even less clarity over the next steps,” they said, citing three “important investor milestones”: Ammeding the PSPA (senior preferred stock purchase agreements) to stop the net worth sweep and allow Fannie and Freddie to retain earnings as capital; announcing how the Treasury plans to treat its current investments, and how FHFA and Treasury intend to increase GSE capital beyond allowing retained earnings.

“Despite the overall positive message that the release of this plan has generated, its long delay and lack of specificity on key contentious points further bolsters our view that the risk of protracted negotiations is extremely high,” Beacon said.

The firm added that the “closer it comes to the November election, the harder it will be for any outside capital to be raised due to fear of President Trump losing the election and his opponent halting or even reversing these reform plans.”

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