WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin said on Monday the Trump administration would take administrative measures to overhaul mortgage giants Fannie Mae and Freddie Mac if it failed to secure congressional support for its plan within six months.

FILE PHOTO - U.S. Treasury Secretary Steven Mnuchin walks to a working breakfast at the G7 Summit in Biarritz, France, August 25, 2019. Erin Schaff/Pool via REUTERS

The Treasury is negotiating with the Federal Housing Finance Agency, which oversees the mortgage giants, which were bailed out during the 2008 financial crisis. It hopes for a “near term” agreement allowing the two companies to retain their earnings, Mnuchin said in an interview with Fox Business Network.

“They have been in conservatorship too long and we want to make sure they’re not in conservatorship on a permanent basis,” Mnuchin said of the two companies that guarantee more than half of the mortgages in the United States.

“So our first choice is to work with Congress on a bipartisan basis, but if we can’t do that we’re perfectly comfortable moving for it on the administrative side.”

Fannie Mae and Freddie Mac securities soared on Monday, with their preferred shares last up more than 15 percent, while the common stock was up more than 19%.

The Treasury said on Thursday the government should draw up a plan to begin recapitalizing Fannie Mae and Freddie Mac, while calling on Congress to act on comprehensive housing reform.

Mnuchin said he hoped to get Congress on board in three to six months, otherwise “we’ll move on, on the administrative front.”

Mnuchin, as well as other top housing officials, will testify on Tuesday before the U.S. Senate Banking Committee on the report. Investors will listen closely for further detail on the administration’s plan, as well as whether Congress is interested in pursuing housing finance legislation.

The Treasury holds warrants representing 80% of Fannie and Freddie’s common stock, as well as senior preferred stock agreements that allow it to sweep the firms’ profits into its coffers. That arrangement has left Fannie and Freddie with just around $3 billion of capital each.

On Friday, the 5th U.S. Circuit Court of Appeals overruled a lower court that had backed the federal government’s claim to those profits. The ruling clears the way for Fannie and Freddie investors to make legal claims for a share of the companies’ profits.

Mnuchin said an agreement with FHFA allowing the two companies to keep their earnings “will be a significant increase in capital.”

He said it was unclear when he Fannie and Freddie would come out of conservatorship.