On Wednesday, Treasury Secretary Timothy Geithner broke thesilence about the administration's plans for the GSEs: a detailedlegislative proposal will be coming in 2011. "We do not think it isnecessary to consolidate the full obligations of Fannie and Freddieonto the nation's budget," he told the House of RepresentativesBudget Committee. "But we do think it is important that we make itclear to investors around the world that we will make sure that wewill take the actions necessary to keep the two companies stable."The Treasury would develop a few "broad principles" forrestructuring Fannie and Freddie this year, he added.

Into this vacuum has moved any number of proposals for the GSEs,from Congresspeople to industry groups such as the Mortgage BankersAssociation. The most recent comes from the National Association ofRealtors, which would like to convert the GSEs to non-profitentities owned by the US government. In essence, this plan wouldmake explicit the government's backing of Fannie and Freddie, whileleaving their missions relatively intact.

The current model of "private profit and public loss" isinherently flawed, NAR spokesman Lucien Salvant tells GlobeSt.com.Therefore NAR is proposing that the GSEs should be converted intoself-sustaining, government-chartered non-profit entities, hesays.