The revamp of Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FMCC) was not making much, or any, progress. Hedge funds wanted to have FNMA and FMCC, also known as Fannie Mae and Freddie Mac, respectively, sold through a public offering. Afterwards, a private-sector mortgage market could take the place of Fannie and Freddie.

However, this plan has not moved very much in Congress. Similarly, two recent proposals were not making headway as well. These proposals included a bipartisan Senate bill and a discussion draft from the House.

According to the hedge funds, Fannie and Freddie fully recovered from their keel over that resulted in government receivership. Fannie and Freddie received US$187 billion from the government. The two still owed around US$55 billion to the government. The debt was being repaid through special preferred stock dividends.

Now, Fannie and Freddie were ready return to the private sector, according to hedge funds. They believed that the two could offer their stock to the public for sale and raise enough funds to pay for debt.