In 2011, the Government Mortgage Complex accounted for 88 percent of all first-mortgage originations in the United States, with the government also controlling an estimated 90 percent of the student loan market. The government’s growing dominance in the home mortgage and student loan categories is cause for concern, posing a threat to private investors, borrowers, and taxpayers.

In the latest Financial Services Outlook, American Enterprise Institute (AEI) housing experts Peter Wallison and Edward Pinto explain how decades of government intervention have gravely harmed America's housing market.

Only by ensuring mortgage quality and fostering the accumulation of adequate capital behind housing risk can a robust housing investment market be created without government guarantees.

As the housing market struggles to keep pace with economic recovery elsewhere, homeowners would love to have a crystal ball.  Absent that, however, they have AEI resident fellow Edward Pinto, one of seven panelists to be awarded with Zillow and Pulsenomics' Crystal Ball Award.

The U.S. housing finance market should be governed without direct government financial support, Fannie Mae or Freddie Mac.

For many years, community financial institutions have been denied fair and equal access to the secondary market. Banks prosper by making prudent loans with an adequate return and maintaining a reasonable cost structure. Today 97 percent of our banks are community banks and they are increasingly finding this business model under siege.

AEI's latest housing finance plan eliminates the need for government guarantees and permits the gradual elimination of Fannie Mae and Freddie Mac.

The US housing finance market should function without any direct government financial support. It should also ensure mortgage quality, a stable budget for assistance to low-income families, and eliminate Fannie and Freddie.