The Treasury Department Tuesday refuted an article in The Washington Post that implies the Obama administration settled on a proposal to heal the housing market with a large government role. Neal Wolin, deputy secretary of the Treasury, said the article “mischaracterizes a number of the core housing finance reform principles” the administration proposed in February. The article quotes people familiar with the talks saying the proposal chosen could preserve Fannie Mae and Freddie Mac. Wolin said each of the three options outlined in the Treasury’s white paper released in February recommend the government-sponsored enterprises “be wound down in a responsible time line.” The Post said a decision to maintain federal support of the mortgage giants “would mark a big milestone” in the process of reforming housing finance. Many — including Wolin and the Obama administration — envision a new mortgage finance system that has a limited role for Fannie and Freddie. “This will help ensure that taxpayers are protected and the private sector bears the burden for losses,” Wolin said. He said the administration wants the private sector, under strong federal oversight and consumer protection, to be the dominant mortgage provider, with the government’s footprint shrinking substantially. Wolin stressed no decision has been made. “Today, our focus must be on both healing a still-struggling housing market and taking the steps necessary to bring private capital back into the housing market,” Wolin said. “The principles we have laid out will help lead to a future system with more private capital, more oversight, and less risk to the taxpayer – in short, to a healthier, more stable system of housing finance. Write to Jason Philyaw. Follow him on Twitter: @jrphilyaw