Keeping the common stock outstanding is a serious problem. Fannie and Freddie, once powerful institutions backed by Washington insiders and the titans of banking, are at the weakest they have ever been. Their shareholders and executives have been knocked back on the heels. If we can't knock out the shareholders now, we're not going to knock them out later. If anything, leaving them standing probably indicates we'll end up lining their pockets with taxpayer financing later.
As time goes on, the holders of Fannie and Freddie will likely grow stronger and seek to exercise their political muscle once again. In a year or two, regardless of who gets elected president, the Treasury Department will not likely be staffed with quite so many critics of the mortgage companies or ideological (if often inconsistent) free-marketeers.
Despite reassurances that taxpayers will be put before the shareholders, this deal is unlikely to stick. One economic reason is that the economic benefits available to shareholders are highly concentrated in powerful institutional investors, while the costs are widely dispersed. The direct benefits of guarantees and subsidies can be quite large for a relatively small group of people and institutions, such as banks, pension funds and foreign governments. These groups would benefit from changing the deal, keeping the entities afloat with subsidies if necessary, and therefore have strong incentives to lobby for a more beneficial arrangement.
The costs of ongoing bailouts and subsidies, while large in aggregate, are likely small when spread over the tax-paying population. A large group of taxpayers facing relatively minimal costs will have minimal incentives to monitor the arrangement, much less organize and lobby against modifications that serve special interests. The organizational costs alone are probably prohibitive of effective public policing of this take out. Although this is being played as the Treasury "seizing" Fannie and Freddie, it may well end up as Fannie and Freddie seizing the Treasury.