Edward DeMarco, in his role as acting director of the Federal Housing Finance Agency, submitted a broad guideline for creating a vibrant private-label residential mortgage-backed securities market while deleveraging and unwinding the government-sponsored enterprises.

And in doing so, the GSEs are described as ailing and antiquated firms squeaking along with trillion of dollars worth of outstanding divestitures.

Like his housing notes past, DeMarco hits on the major points of contention. But I did tweet that the note makes it pretty clear no one in the federal government expects Fannie Mae or Freddie Mac to repay tax dollars anytime soon.

This lead @ruthlessgravity to reply: "that leaves receivership or good bank/bad bank as only options." To which, I replied quickly my expectations of the former.

And the reason is quite simple. As nonperforming loans move over to the GSE portfolio, the securitizers will become more illiquid. The creation of a public-private partnership, at least for these assets, appears unlikely.

For one, the government is reluctant to spend any money putting together a good bank/bad bank or to pay any third party.

But, as the FHFA admits, the operating and management systems at the GSEs are on the decline. It is unlikely there will be a meaningful budget for research and development. And new products from the GSEs seeking to hedge risk can be broadsided in general-interest press reports.

Not only are the computers different at the GSEs, but the FHFA seems concerned that it will not even get good people in, now that compensation levels are capped.

As Jim Vogel from FTN Financial said in an email: "The GSEs function with capital from the government, but human capital is at risk entering the fourth year of conservatorship. Risk management is a people business, not a system process."

So the likelihood of taking the entire operation under the federal umbrella seems to be growing. And by doing so the FHFA hopes to lay the groundwork for a thriving private-label secondary market.

For this the FHFA gets an 'A' for effort. If only the regulator's will could be enough to elicit definitive momentum from Congress or the administration to act.

Let's hope the GSEs can survive long enough, until a better solution can be reached.