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38 IS THE GSE STATUS QUO SUSTAINABLE? e Federal Housing Finance Agency (FHFA)'s conservatorship of Fannie Mae and Freddie Mac, which will reach its eight-year anniversary in September, was only meant to be temporary. e Obama Administration does not believe that GSE reform is an urgent issue. Last year, key officials such as Treasury Secretary Jack Lew and Treasury Counselor Antonio Weiss publicly stated that the GSEs will not be recapitalized and released from conservatorship while Obama is president. e financial results for Q1 2016 released by both Freddie Mac and Fannie Mae this week, particularly for Freddie Mac, have resulted in even more questions as to whether or not the current GSE model is sustainable—whether the GSEs can continue to be profitable under the conservatorship or whether taxpayers will be forced to fund another bailout. Freddie Mac reported a $354 million loss for Q1, its second quarterly loss in the last three quarters (a $475 million loss was reported for Q 3 2015). Fannie Mae was profitable for Q1 at $1.1 billion but it was less than half of the previous quarter's profit. "From a sustainability standpoint, it could be sustained as a conservative enterprise for quite some time, but I don't think it's sustainable because you're going to eventually continue to have litigation from real shareholders saying, 'What it the world is going on? It's in conservatorship, not receivership,'" said Steve Williams, Principal with Cornerstone Advisors. "at's occurring right now. Even the money moving to Treasury is still in litigation with shareholders. But more importantly, I think it's not sustainable because having the two GSEs, essentially your mortgage market standard- bearers, in this kind of limbo could ultimately constrain the health of the economy in terms of the housing market and housing finance." In response to Freddie Mac's Q1 earnings release, noted Washington Post political columnist George Will wrote a piece titled "Treasury's Fannie and Freddie Rip-Off " in which he described the "misadventures" of Fannie Mae and Freddie Mac and characterized the GSEs' current situation as a "maddeningly complex story" that "illustrates the toll the administrative state takes on the rule of law." "In September 2008, the government rescued them with $187.5 billion and placed them in conservatorship, which is supposed to be temporary and rehabilitative," Will wrote. "A conserved entity should be returned to normal business in private ownership." Several industry trade groups have joined the chorus of calls this week for GSE reform. e Community Home Lenders Association (CHLA) released the following statement following the news of the Freddie Mac Q1 loss: "e Community Home Lenders Association is renewing its call, made in a February letter to Director Watt, to have FHFA