Testimony by Anthony Sanders, a professor of real estate finance atGeorge Mason University, though, took another tact. He noted that thefederal debt already stands at $8 trillion and the Fannie Mae, Freddie Mac and Federal Home Loan Bank debt stands at $8 trillion as well. "This combined debt load for theUS is $16 trillion and represents 110% of our gross domesticproduct," he said. "This 'Grecian Formula' of debt issuance to fundhousing goals is not sustainable. We simply have too much leverage inthe housing finance system."

There are affordable housing missions at HUD; Fannie and Freddie; financial institutions--through the Community Reinvestment Act; andother federal, state and local programs, Sanders said. "Given themassive supply of vacant housing on the market, the shadow inventoryof foreclosed houses at financial institutions and multifamilyvacancy rates, perhaps it is high time that we consolidate theaffordable housing missions under one tent."

HUD is the ideal choice, as the nation's affordable housing mission has typically been housed there. At the same time, Sanders said, the FHA, "our low-to-moderate income mortgage insurance entity, is woefully antiquated in terms of technology and is in desperate need of modernization. Thus my first recommendation is a dramatic overhaul and modernization of the FHA."