Freddie Mac (FMCC) and Fannie Mae (FNMA) stocks just went through the roofup 35% and 30% respectivelyas Donald Trump secured a return to the White House. Investors are eyeing this move as a green light for the long-anticipated recap and release of these mortgage giants. One of Trump's first steps could be appointing a new head of the Federal Housing Finance Agency, clearing the way to finally end the government's control over these firmsa move he started in his first term but didn't finish.

• Warning! GuruFocus has detected 2 Warning Sign with FNMA.

But there's tension brewing. Democrats warn that taking Fannie and Freddie private again could make mortgages pricier. Economists like Mark Zandi predict that mortgage rates could spike between 0.43% and 0.97%, hitting homeowners' wallets hard with extra annual costs. Meanwhile, Trump-aligned voices like former FHFA head Mark Calabria argue that Fannie and Freddie are financially solid and ready for independence. Both sides know these companies back a huge slice of the U.S. mortgage markethalf of the $12 trillionmaking their privatization no small shake-up.

And here's where it gets interesting for investors: Trump's allies, including hedge fund heavyweights like Bill Ackman (Trades, Portfolio) and John Paulson (Trades, Portfolio), have already placed big bets on these stocks and stand to rake in serious profits if the conservatorship ends. Quiet discussions among Trump's team suggest they're exploring options to go around Congress, accelerating a privatization plan via the FHFA and Treasury. As Trump's plans come into focus, both Wall Street and homeowners are watching closely, bracing for a transformation that could reshape the housing market for years to come.

This article first appeared on GuruFocus.