Housing is where the Great Recession began, yet Congress and President Obama still haven't untangled the complex ties among government, business and home buyers that fed into that economic calamity. After five years, though, there is movement toward reforming a big part of the system.
At the moment, the market for new mortgages is almost entirely government-backed through Fannie Mae, Freddie Mac or the Federal Housing Administration. In Phoenix on Tuesday, Mr. Obama rightly argued that the situation must change, that private finance should again be the "backbone" of the system. He supported slowly but steadily winding down Fannie and Freddie, so-called government-backed enterprises meant to drive investment to mortgages, and replacing them with a more modest government role in the market.
Simply hearing the president argue for ending Fannie and Freddie is important. Sen. Bob Corker, R-Tenn., a major advocate for a bipartisan restructuring plan, said his office saw a wave of interest in reform from other lawmakers following Mr. Obama's speech. Members of both houses of Congress had already been working on proposals. With both political branches engaged in good faith, there is a real chance something will pass in the next few months.