On Friday, Oct. 31, Federal Reserve Chair Ben Bernanke said to a mortgage finance symposium in Berkeley, Calif., via videoconference, "Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress," calling for the creation of a government bond insurer for mortgage funding in order to deal with the handling of government-sponsored entities (GSEs) Fannie Mae and Freddie Mac. In response, Big Builder launched an online survey to solicit its readers' reactions.

The majority of survey resopondents--58.3%--agreed with Bernanke, while 25.0% disagreed and 16.7% remained unsure. Some of that lack of confidence can be based on the ambiguity surrounding the degree of government intervention.

As an alternative to the creation fo an FDIC-modeled governement bond insurer, Bernanke suggested covered bonds--debt issued by financial institutions and backed by a high-quality pool of assets, which are used extensively throughout Europe--with extensive government regulation. Results were evenly mixed, with 45.5% of respondents believing this is an acceptable alternative for handling Fannie Mae and Freddie Mac and remaining unconvinced either way, respectively; 9.0% did not find it an acceptable solution. One of the respondents who supported this alternative added the caveat "with strict regulation."

Bernanke's third option was to tie the GSEs even more glosely to the government through either a public utility model or a cooperative between loan originators and the GSEs. Once again, results were mixed, with 27.2% of respondents approving this proposal as a viable plan to deal with the mortgage securitization crisis while 36.4% either disagreed or remained unsure, respectively. Those who disagreed noted a strong preference for less government involvement.

Overall, Big Builder's readership does not seem to rally behind any of Bernanke's proposals.

And as the automotive industry continues to call for a bailout, citing impending job losses, one respondent pointed out, "No one is talking about doing anything to get builders back building. Until that happens, they can forget about making up for the lost jobs. The $7,500 rebate [available under the Housing and Economic Recovery Act of 2008] was a joke."