Bloomberg is reporting House Financial Services Committee Chair, Barney Frank, is talking about replacing Freddie Mac and Fannie Mae with a different type of mortgage financing model.

The committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,” Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, said at a hearing in Washington today. “That’s the approach, rather than a piecemeal one.”

If you recall, Fannie and Freddie received quite a Christmas present in the form of an unlimited bail out, which puts TARP to shame.

Also, Freddie Mac and Fannie Mae are projected to lose $400 billion dollars, which is also much larger than TARP losses.

So, what does Frank have in mind? Try this vague, we need to do somethin' generality:

We’re going to look at the whole question of housing finance,” Frank said. “Sorting out the function of promoting liquidity in the market, and also the secondary market in general but then also doing some kind of subsidy for affordability.

Even worse, Treasury Secretary Geithner is claiming reforms couldn't be passed until 2011.

Meanwhile Fannie and Freddie are burning money like a bomb fire.

We hope to dig through some expertise and see what kind of policy recommendations and analysis make sense. If you know of such work, please post a link in the comments.

Obviously, promoting home ownership and affordability isn't working out too well. Fannie and Freddie are this financial sink hole and even more amazing, seems to get a yawn in the press.