I agree absolutely. It really irked me when the government took over Fannie Mae and Freddy Mac( FNMA, FHLMC). As a result, home prices remain ridiculously high given the record number of foreclosures and large numbers of mortgages "underwater".

As expected, government intervention has created obvious winners (the financial industry, people who buy too much home) and losers (almost everyone else) once again. I would prefer your solution.

But structuring the financial industry to prevent it from re-creating known problems is also necessary.