This is likely to become a noisy, ideological debate that reignites the old argument about whether Wall Street greed or Washington meddling is to blame for the financial crisis.
Most of the shouting is likely to come from free-market ideologues, including the House Republican leadership, which is determined to get the government out of the business of providing mortgage guarantees and sell Fannie and Freddie off in pieces.
These leaders will be opposed by a formidable coalition of home builders and community bankers, along with low-income-housing advocates and the Obama administration. Their view is that without some form of government guarantees, loan rates will rise, housing prices will fall and the 30-year fixed mortgage will disappear.
Whatever is decided will have significant impact on the national housing market and the economy. But the much bigger impact could be on the economy of the Washington region. Fan and Fred are among the largest private employers and the pillars of a much larger housing finance cluster that accounts for tens of thousands of high-paying jobs. They have helped to make Washington the capital of the secondary mortgage market and a growing center for banking, finance and asset management. If the conservative ideologues have their way, this engine of the regional economy will be dismantled and shipped north to Wall Street.
This issue belongs at the top of the priority list for the region's business and political leaders. The looming reduction in government spending already casts a menacing cloud over the area's economy, and the dismantling of Fannie and Freddie would be a body blow.
On the other hand, if the mortgage twins were to reemerge as private companies, they would generate hundreds of millions of dollars each year in additional revenue for the District (Fan) and Virginia (Fred) in the form of corporate-profit taxes, from which Fannie and Freddie have long been exempt under their existing federal charters. The fiscal benefits from luring Northrop Grumman's or Hilton's corporate headquarters look like chump change by comparison.
In the past, Fan and Fred needed little help managing their political risk and getting what they wanted from government. They were so good at it, in fact, that you could argue it led directly to their undoing. Now that they are wards of the Treasury, however, it is Fan and Fred who have become politically neutered, discredited in the minds of the public and barred by regulators from participating in the debate about their future. And you can be sure that Wells Fargo, Bank of America and the other big mortgage originators will spare no expense not only to preserve a secondary market in government-guaranteed mortgages but also to ensure that it is they - and not successors to Fan and Fred - that dominate it and capture most of its profits.