"The assets within the companies—they have tremendous scale, expertise, people—there are no other group of assets that can perform the job necessary for American housing," said Bruce Berkowitz, founder and manager of Fairholme Capital Management. "We have the infrastructure. We could have the money. We can make a reasonable return. We don't have to be greedy. We don't have to have federal support."
On Wednesday, Berkowitz announced the proposal to buy the insurance components of Fannie Mae and Freddie Mac as a way to free the bailed-out mortgage giants from U.S. government control. But heavy speculation remains over how federal regulators and lawmakers would receive the plan.
(Read more: Fairholme proposes to buy insurance businesses of Fannie, Freddie)
The proposal seeks to bring in $52 billion worth of new capital. Its recapitalization plan needs to raise about $34.6 billion in exchange for preferred stock, as well as a rights offering from preferred stockholders to fund the rest of the endeavor.