Some observers think that resolving the long-running conservatorship of Fannie Mae and Freddie Mac this year is closer than it has ever been, but they also say political differences present a number of challenges. There has been an uptick in momentum the past few months and the recent deal between the Federal Housing Finance Agency and the Treasury that allows the GSEs to retain $3 billion in capital is an optimistic sign of progress to many. Moreover, the Senate Committee on Banking, Housing, and Urban Affairs is working on a draft of a GSE reform bill, and the House Financial Services Committee has held a handful of hearings on GSE reform issues in the fourth quarter in preparation for drafting legislation.