Brian O’Reilly, president of the financial advisory firm Collingwood Group, and former executive at Fannie Mae said the Treasury Department‘s white paper on the future of housing finance is “a good first step” in a process that doesn’t have to take as long as officials say. Since the paper was released Friday morning, Treasury Secretary Tim Geithner and others in the Administration have said the plan to wind down Fannie Mae and Freddie Mac would take between five and seven years. While O’Reilly praised the report for ending the speculation and reducing some uncertainty, the haziness of its timeline has left investors and clients of his wanting. “One fault is that the timeline is vague,” O’Reilly told HousingWire. “We would have liked to have seen a bolder deadline. If this languishes for seven years then that will not be good.” Of the three options for what would replace Fannie and Freddie, O’Reilly said the third option, the one that calls for a catastrophic fund to back a market filled with private capital, would best serve the housing industry going forward. Washington think tank MF Global responded to the white paper Friday afternoon, warning “getting rid of Fannie and Freddie is much harder than it looks.” Analysts there said large banks would move in and dominate the securitization market, setting back efforts to end too-big-to-fail. Community banks and credit unions would lose access to the secondary market. The only way to let them in is if Congress bars large banks that securitize loans from writing them, a move that is “highly improbable.” Other critics are concerned that rising housing costs would prevent some borrowers from ever owning a home. Sorting these issues out will take a lot of work between Republicans and Democrats in Congress. O’Reilly said, though, that by segregating out segments such as departments dealing with legacy assets would reveal an infrastructure that still has some value and would accelerate the process of retooling that infrastructure to better serve the industry. “There is one thing the GSEs have done really well. They are the hub of the wheel that connects the players in this industry and the data that flows through their infrastructure,” O’Reilly said. “That infrastructure is hugely valuable.” The most important thing the white paper does, O’Reilly said, is that it provides a framework around which legislative discussions can finally begin, and it gives the private market, now shouldered with the responsibility of carrying the market in some form, a direction to head into. “The paper reduces that persistent malaise,” O’Reilly said. “You can’t underestimate this malaise on the private investor.” Write to Jon Prior. Follow him on Twitter: @JonAPrior