The first panel speaking at the Conference on the Future of Housing Finance shows just how deep the divisions are to the many proposed solutions on how to shift the role of the government-sponsored entities Fannie Mae and Freddie Mac into fiscally stable operations. The moderator, Treasury Secretary Timothy Geithner, asked the panel which includes speakers — such as Marc Morial CEO of National Urban League and Barbara Desoer, president of Bank of America (BAC) — but no one from the GSEs, for their ideas on how to create such a solution. Bill Gross, co-founder and co-chief investment officer of PIMCO suggested that rental housing should become a larger focus and that the GSEs should always carry of government guarantee in its bonds. Americans should be "well-housed but not necessarily home owners," he said. Gross' opinion is popular among mortgage finance investors, and PIMCO is a massive investor in this space. Others have also proposed such an arrangement, including real estate consultant John Burns. Without GSE mortgage guarantees, financing for mortgages may soon require 30% down payments as investor cash gets pulled out of the waterfall from the secondary markets down to originations, Gross said. "Without government guarantees mortgage rates would be hundred of basis points higher," added Gross. Alex Pollock, resident fellow at the American Enterprise Institute offered his strategy for the GSEs. He recommends a "Julius Caesar strategy" to divide the entities into three parts, named so as the ancient leader divided Gaul into three parts. One part should be dedicated to government-led housing and folded into HUD. The viable parts divided into a private business. The third part is to create a bad bank to consume the distressed portfolio in order to wind it down," at a considerable cost to the taxpayer," Pollock added. Write to Jacob Gaffney.