Sources are telling Bloomberg that a report on the White House's plan to release Fannie Mae and Freddie Mac (the GSEs) from their 11-year long conservatorship has landed on the desks of several agencies and is also in the hands of Lawrence Kudlow, head of the National Economic Council.  Bloomberg staff say this is a sign the report is getting closer to being released publicly.

The two mortgage giants were placed in conservatorship with the Federal Housing Finance Agency (FHFA) in August 2008 after they incurred large losses through mortgage defaults during the housing crisis. Over the next four years they each drew substantial operating funds from the Treasury, but both returned to profitability in 2013 and have earned billions of dollars since.  All of their profits except for a relatively small buffer has been swept into the Treasury as dividends.  The companies have not been allowed to rebuild capital nor have the payments to Treasury reduced any of their massive debt.

The new report was prepared by the Treasury Department and is said to address their path out of conservatorship and plans for them to rebuild capital. Among discussions in Congress and the administration has been the possibility of public offerings, an issue that is complicated. The Treasury Department debt is secured with the entirety of the Senior Preferred Stock in each of the companies and the common and regular preferred stock that was issued pre-conservatorship is still outstanding and actively traded.

Regardless of what is proposed in the report from Treasury, it is likely Congress will insist on input. Both House and Senate have held numerous hearings on housing finance reform including the fate of the GSEs, and there are currently several related bills wending their way through both houses.  Among the sticking points is the role the government will play in guaranteeing loans that are sold on the secondary market and whether the GSEs would have competition in that market.

The report was originally expected to be made public in June, but Bloomberg says the administration was concerned that any bold steps could upset the housing market before the 2020 election.

Rumors of the report sparked gains in the stocks of both companies. According to Bloomberg Fannie's stock was up 8.2 percent to $2.45 and Freddie's gained 7.7 percent to $2.38. As discussions about allowing the companies to move out of conservatorship picked up again earlier this year the price of both stocks has more than doubled.