Fannie and Freddie Finally on the Block

CNBC

The Obama administration finally released it's "white paper"on how to eventually wind down Fannie Mae and Freddie Mac. Really no surprises. They offer three scenarios and don't throw their weight behind any one in particular.

Option 1: Privatize the mortgage market entirely, and limit the government's role to FHA, VA and USDA for "narrowly targeted groups of borrowers."

This as the paper also says FHA's downpayment could be raised to 5% and insurance costs raised.

Option 2: Privatize as in option 1 with FHA, VA, USDA, but add a government guarantee "to scale up during times of crisis."

Of course all the new regulations on the mortgage market are supposed to avert the type of crisis the market just endured, but I guess that's besides the point.

Mortgage Mess - A CNBC Special Report

Option 3: Privatize as before but add "catastrophic reinsurance behind significant private capital."

This could be a group of private mortgage guarantor companies that would provide guarantees for securities backed by mortgages that meet strict underwriting guidelines. A government reinsurer would then provide reinsurance to the holders of these securities. The government would charge a premium for that.

So it's no government, government light and full government backing.

I'm at the Brookings Institution right now, where Treasury Secretary Timothy Geithner is now speaking.

Here's some headlines:

Geithner: "There is a very important role for government in affordable housing."

"To make sure system is more stable in the future, you need to have a system where banks hold more risk" and borrowers put more capital into their homes.

More to come after Geithner speaks from several panels of experts who will rip into the white paper.

Questions? Comments? [e-mail] follow me on Twitter @Diana_Olick