Republicans have been bashing Democrats all year for leaving government housing finance out of the financial regulation overhaul.  Now it appears Republicans will likely get a much greater say in the government’s future role in housing.

The House Financial Services Committee, and the party that controls it, will do much of the rewriting of housing finance. If Republicans win the House, they’ll control the committee and much of what it produces.

“There’s clearly a window of opportunity here,” said a Republican aide with the House Financial Services Committee. “I think that Fannie Mae and Freddie Mac are the perfect case study to demonstrate Republicans are serious about this effort.”

“Ending the bailout of Fannie and Freddie will be at the top of our agenda,” said Rep. Spencer Bachus (R-AL), the committee’s top Republican.  “House Republicans want to reinvigorate the housing finance system so government guarantees no longer make private investors and creditors wealthy while saddling taxpayers with losses.”

The government-sponsored enterprises have cost taxpayers about $150 billion so far.  Fannie and Freddie buy mortgages from lenders, and package them into guaranteed securities.  That allows mortgage companies to loan more money and make it easier for more buyers to finance their home purchases.   

Fannie and Freddie also bought hundreds of billions of dollars worth of mortgage backed securities, which collapsed along and left the GSEs insolvent.  The government’s guarantee of Fannie and Freddie went from implicit to explicit, and they continue to drain the Treasury. 

Committee members from both parties promise to wind down Fannie and Freddie.  They continue to argue over what will replace them, though they appear to agree on one significant point. 

Committee Chairman Barney Frank (D-MA) has said both he and Bachus were “skeptical of this system whereby the government guarantees that loans will be paid off and a private entity gets the benefit from making those loans which the government has guaranteed to be paid off.”

The federal government has been deeply involved in housing for generations.  Democrats, Republicans and administration officials are considering changes beyond Fannie and Freddie, throughout the system.  Treasury officials said they plan to release the administration’s plans early next year.  When they do, there will likely be fewer Democrats in Congress to work with.  More Republicans mean Congress will probably produce a much different system than if this administration had pushed to tackle the problem with the Democratic majorities it’s enjoyed for two years.