WASHINGTON (Reuters) – The Trump administration will pursue the reform of mortgage giants Fannie Mae (FNMA.PK) and Freddie Mac (FMCC.PK), the guarantors of over half the nation’s mortgages, if Congress fails to act, officials told Congress on Tuesday.

In testimony before the U.S. Senate Banking Committee, U.S. Treasury Secretary Steven Mnuchin, Housing and Urban Development Secretary Ben Carson, and Federal Housing Finance Agency Director Mark Calabria defended a plan to release Fannie and Freddie from government control more than a decade after they were bailed out during the 2008 financial crisis.

While reiterating that legislation to overhaul the entire system would be ideal, the officials insisted they would pursue reforms if Congress failed to act.

“If we do nothing, this is going to end very badly,” said Calabria, who warned Fannie and Freddie are undercapitalized and overly reliant on government backing to weather any downturn.

Mnuchin said he would like to end a 2012 policy of claiming all Fannie and Freddie profits “very quickly.” He added that beyond retaining earnings, the pair would also likely need access to third-party capital, estimating they could need to raise roughly $100 billion in reserves.

And they received support from Senate Republicans to begin acting alone, as housing lobbyists are extremely pessimistic Congress would pass housing legislation before the 2020 presidential election.

“While it’s the proper role for Congress to solve this … I encourage you to act and to help us get to that point,” said Senate Banking Chairman Mike Crapo.

Their plan, ordered by President Trump in March and published Thursday, is a first step on the long road to reforming Fannie and Freddie after a 2012 attempt by the Obama administration fell flat.

Lawmakers covered a range of legal and economic issues, including how the Treasury intends to bolster Fannie and Freddie’s capital, and how the administration planned to shrink the pair’s footprint, all while keeping mortgage costs stable.

The administration’s plan called for Congress to pass legislation to ensure the housing market is not destabilized, notably by giving an explicit government guarantee for Fannie and Freddie’s mortgage-backed securities, and setting up new charters that would allow other companies to compete.

Republicans and Democrats are already at odds over the report. Republicans praise the inclusion of several recommendations outlined in a draft bill unveiled by Crapo in February. Democrats say the plan will drive up housing costs for lower-income Americans.

“Rather than create a system that addresses the needs of working families, the Trump Administration has put out half-baked proposals that will make mortgages more expensive and harder to get,” said Senator Sherrod Brown, the top Democrat on the committee.

Fannie and Freddie securities have traded in a tight range since the committee meeting began. Fannie preferred shares were last up 0.6% on the day while Freddie preferred shares were up 1.6%. Fannie Mae common shares were last down 4% while Freddie Mac common shares were down 4.6%.

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