Revolving-door lobbyists and financiers are pushing hard for mortgage-reform legislation on Capitol Hill, and the only thing that could defeat the special interests is a conservative Republican majority in the House of Representatives.

The power players working the issue are not seeking a laissez-faire policy. The Associated Press relayed the message from House Democrats: "The vast majority of housing industry groups such as real estate agents, mortgage bankers and homebuilders support keeping a government role insuring mortgage securities."

Mortgage bankers are lobbying to preserve a government backstop for the industry, while hedge funds want to preserve -- but privatize -- the government-owned and government-backed mortgage financiers Fannie Mae and Freddie Mac.

Here's the background:

During the last decade's housing bubble, Fannie Mae and Freddie Mac fueled the market by buying loans off of mortgage lenders and then bundling the loans into financial products called mortgage-backed securities, or MBSs.

Uncle Sam aided Fannie and Freddie in this bubble-inflation activity with an implicit guarantee to creditors and investors -- that if the housing market ever collapsed and brought down these government sponsored entities (GSEs), the government would bail them out.

Today the government holds Fannie and Freddie in conservatorship. The White House and Congress agree that the government ought to unload Fannie and Freddie. Also, there's broad agreement that the government can help stabilize the mortgage industry.

The question is how.

House Financial Services Committee Chairman Jeb Hensarling wants to leave the mortgage industry mostly to the mercies of the market. Cato Institute banking expert Mark Calabria calls Hensarling's bill a "freer market bill, while not a free-market bill."

Meanwhile, the Obama administration stands mostly with a Senate bill -- sponsored by Bob Corker, R-Tenn., and Mark Warner, D-Va. -- that includes a government guarantee of mortgage-backed securities. The mortgage and real estate industries, of course, like the Corker-Warner-Obama approach, which would create a taxpayer-subsidized mortgage market.

The most powerful opposition to the House's "freer-market" approach, according to a source from the lower chamber, comes from the Mortgage Bankers Association. The MBA spent $1.7 million lobbying in the first six months of the year (about equal to Goldman Sachs' lobbying outlays).

When President Obama laid out his mortgage-reform plan last week, the MBA applauded. Specifically, MBA President David Stevens praised Obama's plan for "ensuring sufficient liquidity and the availability of the affordable 30 year fixed rate mortgage ... through an appropriate use of a government guarantee."

The MBA has declared government-sponsored mortgage-backers "a public good." That's an easy view to hold if your members benefit from government support for mortgages.

It's no surprise to find Stevens and Obama on the same page -- Stevens hails from the Obama part of K Street.

Stevens was a senior VP at Freddie Mac during the heady days of the housing bubble, from 1999-2006. After a couple of years at mortgage giant Wells Fargo and real estate titan Long & Foster, Stevens joined the Obama administration to craft housing policy at the Federal Housing Authority.

In March 2011, Stevens passed through the revolving door, taking the helm of the MBA. Stevens donated to Obama's 2012 campaign, which didn't violate Obama's pledge to reject lobbyist money, because, although running a lobbying organization, Stevens isn't registered as a lobbyist.

Hedge funds, meanwhile, are playing a far narrower angle. After Fannie and Freddie failed and went into government conservatorship, a few hedge funds bought up the stock at pennies. Their play was this: In the off-chance the government decides to simply privatize Fannie and Freddie -- instead of winding them down -- those two companies would enjoy a privileged position in the mortgage-backed securities market, and lucky shareholders would reap windfall profits.

Since 2012, a leading advocate of privatizing Fannie & Freddie has been Jim Millstein. Millstein's views on the GSEs got traction because of his former job at the Treasury Department, where he quarterbacked the bailout of AIG. Only this spring did it come out that he holds preferred shares in Fannie & Freddie.

The Bipartisan Policy Center has also backed up the Corker-Warner bill, mostly because it includes a new Fannie Mae, under the name Federal Mortgage Insurance Corp. The BPC Housing Commission is chaired by former housing secretaries Mel Martinez and Henry Cisneros. Martinez happens to be a regional chairman at JP Morgan, and Cisneros runs a real estate investment firm he founded.

As Washington lauds "bipartisanship" and "reform," and scolds the "ideologues" in the House, nobody should lose track of all the financiers looking to profit off of the taxpayers.

Timothy P. Carney, the Washington Examiner's senior political columnist, can be contacted at His column appears Sunday and Wednesday on