How to fix mortgage finance? You decide!

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It’s a tough nut to crack: how should the U.S. reconfigure its housing finance system, including lumbering giants Fannie Mae and Freddie Mac, in the wake of the greatest housing-finance meltdown since the Great Depression? In fact, it’s so difficult a question to answer that the Obama Administration is turning for advice to… well, you.

Today the Treasury Department published 7 questions it would really like to have answers to. For example, “How should federal housing finance objectives be prioritized in the context of the broader objectives of housing policy?” and, “What is the best way for the housing finance system to help ensure consumers are protected from unfair, abusive or deceptive practices?” The Treasury department is now hoping that you—yes, you, Joe and Jane Q. Public—will ring in with your thoughts.

You can do that here*, with written responses via the Federal Register, or at one of the public forums the Administration intends to hold. “Together these opportunities for input will give the public the chance to deepen the federal government’s understanding of the issues and to shape the policy response going forward,” reads the Treasury press release.

That’s a lovely sentiment. Except, um, don’t we elect people to form our policy responses?

Setting aside cynicism and snark for a moment, this could really be a great thing. Politicians listening to individual people and not just the normal crop of lobbyists who get paid to unduly influence our regulatory regime? I can get behind that.

Unless, of course, this listen-to-the-people approach is a cover for not actually doing anything in a timely manner. I’ve written before about how annoying it is that the feds have so many opinions about how to change the financial services industry, but none about how to reform the particular parts they own—namely, Freddie and Fannie. That no doubt is exacerbated by the fact that right now we need Fannie and Freddie (and the Federal Housing Administration) to keep the housing market afloat and to implement all the housing-rescue programs the Administration keeps coming up with. Reform is certainly a good idea, but so is getting through crisis.

So I’m guessing the motives here are a little less than pure. Especially considering that one of the questions Treasury is seeking to answer is, “Do housing finance systems in other countries offer insights that can help inform U.S. reform choices?” Really? There’s not a researcher you can put on that one?

Nonetheless, I look forward to the debate. There’s certainly plenty in housing finance that the public will have opinions on. Let them flow.

*The Treasury press release says to go to this site to comment. I have gone to that site and can’t figure out how. I’ve e-mailed Treasury’s press folks. Will let you know when I hear back.

UPDATE: The questions and comments section will be posted on http://www.regulations.gov next week. For now, you can at least see the questions here.

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