Obama asks America: What to do with Fannie Mae?

Rep Paul Kanjorski (D-Pa.)'s financial services subcommittee is grilling Housing and Urban Development Secretary Shaun Donovan and a range of interested parties this morning on what to do about Fannie Mae and Freddie Mac, the government-dependent, multibillion-dollar-losing home finance giants. Testimony here.

Meanwhile, the "Obama administration seeks public input on reform of the housing finance system," the government says here. Send comments, marked "Office of Management and Budget Approval Number 2502-0500", to "HUD Desk Officer, Office of Management and Budget, New Executive Office Building, Washington, DC 20503; fax: 202-395-5806." Here's what they want to know, partly translated:

    1) Which of these are most important: "Sustainable homeownership; rental policy; balancing rental and ownership; how to account for regional differences; and affordability goals"?
    2) "What role should the federal government play in supporting a stable, well-functioning housing finance system and what risks, if any, should the federal government bear?" 
    For example, what's the right level of  "government involvement... private vs. public capital... explicit government guarantees... direct subsidies...  risk...  incentives... mechanisms for dealing with episodes of market stress"?
    3) "Should the government approach differ across different segments of the market, and if so, how?"  For example, should the government be in the low-cost apartment-construction business?
    4) "How should the current organization of the housing finance system be improved?" Consider "capital market functions; sources of funding; mortgage origination, distribution and servicing; the role of the existing government-sponsored enterprises (Fannie Mae, Freddie Mac)"
    5) "How should the housing finance system support sound market practices?" For example, "underwriting standards... risk and access"
    6) "What is the best way for the housing finance system to help ensure consumers are protected from unfair, abusive or deceptive practices?" Should Washington protect or educate consumers? Should any home loan products be illegal?
    7) Are there other countries whose housing policies we should copy?