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Fannie Mae’s and Freddie Mac’s federal regulator took new steps to privatize the mortgage-finance companies on Monday, telling the firms to help lay the groundwork for their own transitions out of an 11-year government conservatorship, the Wall Street Journal reported. In new policy goals, the Federal Housing Finance Agency for the first time released formal objectives calling for Fannie’s and Freddie’s return to the private sector. The companies have been in government conservatorship since the 2008 financial crisis. FHFA Director Mark Calabria, who took over the agency in April, is pressing to privatize the mortgage-finance companies, which back around half the nation’s mortgage market. Many specific policy details remain to be ironed out over the coming weeks and months, such as how much capital the firms must raise once they eventually leave government control. Monday’s policy goals, contained in a strategic plan as well as a document known as a scorecard, included instructions for the companies to work with regulators as they revamp a post-crisis regulation that has transformed the mortgage market by allowing more deeply indebted borrowers to obtain home financing. Calabria and other Washington policy makers want to curtail the provision to ensure the companies operate competitively with other market players, “with no special advantages for anyone,” Calabria said.

Fannie Mae and Freddie Mac this week unveiled a redesigned Uniform Residential Loan Application, following a directive from the Federal Housing Finance Agency to remove the language preference question and housing counseling information from the updated URLA form, HousingWire.com reported. Earlier this year, the FHFA ordered the government-sponsored enterprises to remove the language preference question and housing counseling information from the new URLA form, which is the standardized form used by borrowers to apply for a mortgage. The move was welcomed by the mortgage business, namely the Mortgage Bankers Association, claiming the language preference question may cause more problems than it solves. But not everyone welcomed the changes. Last week, a group of nearly 20 prominent Senate Democrats, including five who are currently running for president, called on the FHFA to undo the alterations to the URLA, claiming the changes could reduce access to credit for mortgage borrowers who are already underserved. Under the changes proposed earlier this year by the FHFA, the language preference question and housing counseling information are being moved to separate voluntary forms, a change that concerns the Democrats.

Fannie Mae and Freddie Mac’s regulator, facing scrutiny from Democrats about whether freeing the companies from U.S. control might enrich hedge funds, said he would be willing to wipe out shareholders of the mortgage giants if circumstances called for it, Bloomberg News reported. Mark Calabria, director of the Federal Housing Finance Agency, said at a House Financial Services Committee hearing that while it isn’t his objective to wipe out or enrich shareholders, he will do what’s needed to ensure taxpayers don’t have to bail out the companies again. The hearing focused on the Trump administration’s proposal for releasing the companies. Billionaire John Paulson’s firm is among a group of hedge funds that have been fighting for years to end the net-worth sweep that sends Fannie and Freddie profits to the Treasury. Shares have rallied this past year on optimism that the Trump administration will move to end that policy. Fannie and Freddie have been under U.S. conservatorship since 2008, when they were seized as the mortgage market imploded. Treasury’s proposal suggests dozens of reforms to protect against another housing crash, shrinking their dominant market shares and creating new competitors to the two companies, which backstop about $5 trillion of home loans.