WASHINGTON (Reuters) – An Obama administration summit of housing industry leaders next week may yield clues on the future of Fannie Mae and Freddie Mac , the two mortgage heavyweights that so far have sucked up close to $150 billion in taxpayer bailout funds.

The administration has vowed to produce a plan by January to change the role the two government-controlled firms play in supporting the housing market. The conference on Tuesday is aimed at soliciting views from top industry officials on how to the companies should be restructured.

The Bush administration seized Fannie Mae and Freddie Mac in September 2008 as the financial crisis was reaching fever pitch. The two companies were heavily saddled with mortgage losses after the implosion of the U.S. housing market.

A consensus has since emerged that their former status as shareholder-owned but congressionally chartered entities, which fostered a belief in financial markets that the government would not let them fail, should not be resurrected.

Still, the debate over how much support the government should provide to foster homeownership is likely to prove messy given the diversity of views along the political spectrum. Any decision on what to do could take years to resolve.

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By WILLIAM POOLE

THE Federal National Mortgage Association — known as Fannie Mae — and the Federal Home Loan Mortgage Corporation — Freddie Mac — were poorly structured from the time, 40 years ago, when they were set up as so-called government-sponsored enterprises. Both of these technically private companies, designed to foster the issuance of home mortgages, enjoyed implicit federal backing in the event they got into financial trouble but only weak regulation to prevent such trouble. Essentially, the federal government insured the companies’ liabilities but never charged a premium.

Fannie and Freddie had a license to print money. They could borrow at an interest rate only a bit over the Treasury rate and then accumulate large portfolios of mortgages and mortgage-backed securities earning the market rate. What a deal — borrow at the low rate, invest at a higher one, hold little capital and let the federal government bear the risk! Investors enjoyed high returns, and management enjoyed high salaries. Incidentally, politicians also got a steady flow of campaign contributions from the companies’ executives.

Fannie and Freddie’s risky policies led to their near collapse; in September 2008, the federal government brought them under federal conservatorship. Fannie and Freddie have cost taxpayers about $150 billion so far.

On Tuesday, the Obama administration plans to hold a conference to address the question of what to do with the two companies. Clearly, it would be an inexcusable mistake to reconstitute them as private companies in anything close to their prior form.

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Speaking in New York Monday, Treasury Secretary Tim Geithner extolled “the benefits of financial innovation” to the American economy, and promised that the Administration would implement the Dodd-Frank financial reform bill in a way that would preserve those benefits while protecting against “financial excess.”

But when it comes to the mortgage market, the innovation piece looks to be off the agenda. Instead, as Mr. Geithner made clear in response to a question after his speech at New York University, the Administration seems more intent on rehabbing the two biggest obstacles to innovation in home-finance—government-owned Fannie Mae and Freddie Mac. No talk here of trying something new.

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