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Bill Radke: The government’s hearing on what to do about Fannie and Freddie wrapped up yesterday. Today, the general consensus is: Goodbye Fannie and Freddie. Hello… What exactly?

Marketplace’s Gregory Warner reports.

GREGORY WARNER: Barney Frank says Fannie and Freddie have to go. The chairman of the House Financial Services Panel — former champion of the government-backed system — now says the federal government should not be a “backstop” in the mortgage crisis. The only question, he says, is what to put in their place.

Treasury Secretary Timothy Geithner sounded a similarly ambiguous note at yesterday’s hearing. Signaling the end of Frannie Mae and Freddie Mac, and the beginning of… something.

Timothy Geithner: These were avoidable failures, and it is our responsibility to make sure we create a system that is not vulnerable to these same failures happening again.

At stake is the future of the 30-year fixed-rate mortgage that Americans have come to depend on. Without Fannie and Freddie as the big gorillas in the room, the government will still need a way to assure banks they’ll get back for millions of mortgages. Otherwise private banks won’t make those loans.

A world without Fannie might move the government from being on the first string to being on the bench in case a recession or banking crisis happened. Those loans would need to be covered by taxpayers only if things went bad in the housing market.

In Philadelphia, I’m Gregory Warner for Marketplace.