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Bye-bye Fannie and Freddie, but hello to what?

Mortgage giants Fannie Mae and Freddie Mac are draining taxpayers and face extinction. Obama is due to present reforms in housing policy by January. One consensus: more help for renters.

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In four months, President Obama must propose to Congress a new vision for federal support of housing. Sounds a bit boring, true, except that this will be a multitrillion-dollar decision. Even as the vision takes shape, it is seen as critical to the economic recovery.

Time is short because Washington has been spending millions each day to prop up the giants of the mortgage industry, Fannie Mae and Freddie Mac, which are the main focus of the coming reform.

These once-regulated-only enterprises became fully government owned during the 2008 financial crisis. So far they have cost taxpayers at least $150 billion – with more red ink to come as home foreclosures rise.

The first inkling of the Obama vision was made public Tuesday at a forum of experts led by Treasury Secretary Timothy Geithner. The ideas discussed by Mr. Geithner and others, such as Shaun Donovan, secretary of the Department of Housing and Urban Development, reveal fresh thinking about a huge problem.

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