One option that has been discussed is to privatize the GSEs and let them compete in the market as private mortgage insurers and securitizers. To eliminate the presumption of government support and to stimulate competition, some proposals advocating privatization call for breaking up the companies into smaller units before privatizing them. Privatization would solve several problems associated with the current GSE model.
It would eliminate the conflict between private shareholders and public policy and likely diminish the systemic risks as well. Other benefits are that private entities presumably would be more innovative and efficient than a government agency, and that they could operate with less interference from political interests. However, whether the GSE model is viable without at least implicit government support is an open question.