Bye-bye to Fannie and Freddie?

So it seems, according to press accounts in NYT and WSJ.  The Obama administration laid out three scenarios for the future of mortgage finance, none of which included Fannie or Freddie.  One option is for the federal government to get out of the mortgage insurance business altogether (except for a scaled-down FHA).  Another is for the government to stay out of the way most of the time except in periods of financial shocks (question: define a financial shock).  In the last case, the government would guarantee mortgages issued by the private sector, but would charge a fee for the service -- much like what is currently done with the FDIC for bank accounts.  

It remains to be seen which approach can get through a divided Congress.  In any of the three scenarios, mortgages would become more expensive and fewer households would qualify.  But after the turbulence of the last few years, that is not necessarily a bad thing.