The Administration is expected to issue a white paper soon that will address the ailing consumer mortgage market and how it should be fixed. We've discussed these matters quite a bit.

The big issue is the role of Fannie Mae and Freddie Mac, the two disgraced GSEs that remain effectively wards of the government. Bailing them out has cost taxpayers $130 billion.

The debate has taken on a very political tone as of late, as the essential issue strikes to the core of a great political divide in this country. Should the government be involved in this market? Is backing consumer mortgages with guarantee a wise government function?

No matter what you believe, the degree to which these entities dominate mortgage lending is striking. You might think the two GSEs, given their health, would be playing a smaller role these days. You would be wrong. "Before the financial crisis, more than half of home loans were made without any government guarantee. Today, fewer than 10 percent are," notes the Washington Post.

No one is expecting extreme solutions, and while people crow about getting these entities out of the market, a recovery will be much harder without them. In the end, they feed Wall Street and lenders, and that will keep them around. But we'll likely see proposals to lower the maximum amount of loan they can guarantee. We might also see limits on what types of mortgages can be guaranteed.

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