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The days of Fannie and Freddie are growing short as the Federal Housing Finance Agency (FHFA) has released a 21 page report outlining the inevitable removal of the GSEs from a government conservatorship and spinning them off in a play to re-privatize the mortgage finance market.

For all intents and purposes, placing the housing giants into a conservatorship essentially nationalized the housing market. And while the merits of this play are still a matter of debate, what’s done is done and so now the question for policy wonks, regulators and lawmakers is how to undo what’s been done.

According to Reuters, the FHFA (the regulatory nanny of Freddie and Fanny) intends to steer the mortgage finance market back into the private sector, but inactivity of the Obama Administration and Congress continues to be a speed bump.

“Conservatorship is not meant to go on forever,” FHFA Acting Director Edward DeMarco told Reuters. “By putting this out, this will certainly foster some public discussion, including discussion by members of Congress.”

Be that as it may, since the government seized the agencies they have bought or guaranteed about 3 out of every 4 U.S. mortgages while relying on the bottomless well of about 169 billion$ in taxpayer funds. Now, the FHFA plan is reportedly designed to “build a single mortgage securitization platform” that will ultimately see the government having a smaller hand in the mortgage finance game.

What’s left out of this story, however, is the fact that the recent payroll tax reduction approved by Congress allows the government to tap into Fannie and Freddie for contributions to the Treasury much like what’s happened to social security, so the sooner these behemoths are spun off the better or else there may be nothing left after the vultures on Capitol Hill get done picking the bones.

But there is hope now that the FHFA has stepped up and the Wall Street Journal notes that the housing regulator is determined to push forward on interim steps to unwind Fannie and Freddie while keeping “all options open about how much support the government should provide to the $10.3 trillion U.S. mortgage market.”

While Fannie and Freddie have long been working as independent and competitive firms, they have also collaborated on certain issues, such as providing assistance to troubled homeowners, during their stay in the conservatorship. At the same time, both players started dipping their toes into the subprime mortgage sector about 10 years ago and got caught up in the sub primordial ooze so to speak.

The Journal highlights how replacing the mortgage-backed securities that they currently issue with one uniform security would be akin to a “type of public utility” that would outlast Fannie and Freddie in their current form, which is far better than what’s been going on for the past four years as the housing market has yet to begin to recover from the economic tsunami of 2008.

Kyle Colona is a New York based freelance writer and a Feature Writer for the Compliance Exchange and Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications.