The most urgent need for housing finance policy today is to ration the use of government-subsidized mortgage credit.

There is a way to guarantee reliability of mortgages that does not require a government agency.  The solution is for most borrowers to make down payments of 20 percent, which was typical before the madness of the last two decades.

What should we say to someone who wants to buy a $200,000 house but has only $5,000 saved up? In most cases, we should say the same thing we would say if they wanted $200,000 in poker chips in Las Vegas or $200,000 worth of stock. We should just say no.

If the mortgage industry stops making bad loans, then Washington does not need to come in with a new playbook and a new set of roles that people have to learn to play. With good loans, the mortgage finance business will take care of itself.