Investors in Fannie Mae and Freddie Mac have hope that the bailed-out mortgage companies might survive under President-elect Donald Trump, even though Trump has yet to sketch out any position on housing finance.
In the week following Trump's surprise victory, Fannie and Freddie shares have exploded higher, from around $1.50 each before the election to over $3.
Those gains, which came without Trump or his team commenting on the prospects for the government-sponsored enterprises, represent the market placing greater odds on the possibility of Fannie and Freddie escaping the government's clutches. Over the past six years, the Obama administration and many Republicans have opposed this move on the grounds that the two companies would return to the model in which private owners benefit from profits, while taxpayers are on the hook for failures.
While in the government's custody, Fannie and Freddie have been required since 2012 to send all their profits to the Treasury. Investors have sued the government for those profits, and also pushed to allow Fannie and Freddie to rebuild capital and be released back into the private sector.
There are some signs that Trump might give them what they want.
"Everything that I've seen during the campaign indicated that it would probably be friendlier" to investors under Trump, said one lobbyist.
Of particular note are the close ties between Trump and some of the top investors in Fannie and Freddie.
John Paulson, the hedge fund billionaire famous for shorting the housing market during the crisis, was an earlier contributor to Trump's campaign, and has served as an adviser to him. Paulson's hedge fund is also a major owner of the government-sponsored enterprises.
Bill Ackman, the CEO of the hedge fund Pershing Square Capital that is also invested in Fannie and Freddie, said after the election that he expected their status "to get resolved within the first 12 months of this new administration," and that he was "extremely bullish on Trump."
Yet there are also indications that a Trump administration could lean the other way, and favor shuttering Fannie and Freddie and reducing the government's role in guaranteeing mortgage-backed securities.
"It is still early to make any predictions or assumptions," Tim Pagliara, a wealth management manager who founded the Fannie and Freddie investor group Investors Unite, said on a conference call Tuesday.
Trump himself did not comment on Fannie and Freddie on the campaign trail. In 2011, however, he did blame their "malfeasance" for the financial meltdown, a line of argument also frequently advanced by conservative congressional Republicans.
Similarly, Vice President-elect Mike Pence has staked out an anti-government-sponsored enterprise in the past, as a member of Congress calling for them to be privatized and forced to compete in the marketplace.
Which policies their administration will promote will depend on who Trump nominates to top financial and housing posts.
One of the names floated for treasury secretary, Rep. Jeb Hensarling of Texas, is the top congressional critic of Fannie and Freddie. As the chairman of the House Financial Services Committee, he has advanced legislation that would shutter the two businesses and pare back the government's role in backing mortgages. His appointment would effectively be the end of hopes for recapitalizing and releasing the two.
"Personnel is policy and we'll have to see who is put in key positions," said Rob Zimmer, the head of external affairs for the Community Mortgage Lenders of America, speaking to investors and reporters Tuesday.