The common thread from the ongoing Zillow [stock Z][/stock] housing conference is this: Housing is in a recovery, mortgages are not.

It is a very important distinction, one excellently made by panelists at the Zillow conference.

John Burns, once though of as a permabear in the housing industry, is suddenly more positive about housing. As he points out, only 10% of total households remain in negative equity.

So housing prices are rising and reducing this number. Starts are strong. Homebuilders, whom Burns consults with his eponymous firm, are seeing businesses improve.

So good for housing.

Listening to the same panel though, mortgages are in another universe.

"Those who deal with MBS," Burns said, "are in hell."

Mark Hanson of Mark Hanson Advisers said the five to six million mortgage modifications in the last few years only keep the homeowner in a debt prison, with little hope in the future.

"They are zombie renters in their own homes," Hanson said. "The repeat buyer has died."

Pointing to the common thread, speaking earlier, the Federal Housing Administration acting commissioner Carol Galante said the private mortgage market needs to aggressively return in order to sustain these housing gains.

After listening to Hanson speak, I'm not feeling very confident. He added that it's not a lack of mortgage credit, but a lack of credit-worthy borrowers. Without a private market for securitization, Burns said, mortgages originated without the aid of the government in some way or another are unlikely to come back in force.