With the housing recovery still in a fragile state five years after the meltdown, it's definitely time for comprehensive housing reform, analysts claim.

While President Barack Obama’s recent speech on housing seemed encouraging, most consider the probability of housing finance legislation reaching the president’s desk anytime this year to be relatively low.

As a result, the lack of coordination and clarity around any type of housing proposal fuels the uncertainty of private capital returning to the market.

"While policymakers and recent legislative proposals have acknowledged that the current housing market recovery is not sustainable without the return of private capital, many housing policy initiatives to date have been fragmented and in some instances, effectively discourage private capital from the sector," explained analysts for BlackRock [stock BLK][/stock].

They continued, "The sheer number of initiatives and the array of people and agencies involved is daunting."

Much of the focus on current housing finance policy is centered on reform or eliminating Fannie Mae and Freddie Mac.

A number of enterprise-related bills have been introduced in the Senate and the House of Representatives.

Additionally, the Federal Housing Finance Agency is implementing its 2013 strategic plan, which seeks to reform the government-sponsored enterprises and the mortgage finance system.

However, the environment of GSE reform is complicated by positive financial information from the housing agencies due to the enterprises’ profitability, dominant market share and increased guarantee fees.

"Given the importance of the GSEs in the primary and secondary mortgage markets today, any reform of the GSEs must include a clear plan for an orderly transition to a new system that does not impair liquidity or pose a threat to existing investors or interfere with the orderly functioning of this vital multi-trillion dollar market," BlackRock analysts stated.

Regardless of the recent financial performance of both mortgage giants, a bipartisan dialogue has emerged on Capitol Hill in regards to GSE reform.

Currently, there are a handful of newly proposed bills that take into consideration a new sustained housing market with the ultimate goal of protecting taxpayers.

While each proposal offers differing views as to the proper amount of government support, there is a consensus that any approach to reform must attract more private capital and reduce the amount of government support currently in place, the BlackRock paper suggests.

"We encourage policymakers to pursue comprehensive and well-defined solutions that respect investors’ rights and interests in order to ensure that the current housing recovery is sustainable over the long term," BlackRock concluded.

On a similar yet opposing view, Bank of America Merrill Lynch [stock BAC][/stock] mortgage-back securities strategists believe that since 2011 the market has witnesses a rather activity period of policy reform in regards to the housing market.

So much so, in fact, that such policies played a major role in fixing key structural problems that faced housing a few years back.

"In doing so, we also note that, with housing fixed, the need for extraordinary policies such as open-ended third-round of quantitative easing program is sharply diminished," BofAML strategists stated.

They added, "We articulate this view with the purpose of highlighting the risks we see to securitized product asset values in the event of tapering or ending of MBS purchases occurs sooner rather than later."

The current volatility in the rates and equity markets provided a glimpse of what is likely to come upon the news of more definitive tapering of MBS purchases.

Nonetheless, the set of policies that came out of the July- September 2011 period are believed to be highly successful and BofAML thinks it’s far to say ‘mission accomplished,’ and recognize that ending QE3 makes sense.

The interesting note here is that while some market analysts believe the public policies of housing are fixed, the private side of the market is still playing catch up.