I am very happy about this, as you might expect. The FMs have long enjoyed bipartisan support in federal government, and they played a key role in the housing market boom and subsequent bust in the 2000s. It's awesome to see the Obama administration not only acknowledging that, but acknowledging that the best solution is to get rid of them. Woohoo!
Some of the alternatives offered are not a whole lot better than the FMs, alas -- option number 3 is "we'll make new FMs but guarantee their securities explicitly instead of implicitly" -- an FDIC for mortgage-backed securities. I don't think the mortage market needs federal backing to function, and giving it federal backing makes it more likely that the feds will be called in again for another rescue. I'd prefer the feds got out of the business entirely.
BUT! All of the options are better than the current system, and since reform in this area has always been a political hot potato, I'm just delighted that none of the options are 'keep on doing it exactly the way we have been but with New Improved Tighter Regulations(tm)'. I wish President Obama every success in getting the FMs out of the picture.