Obama seeks plan to keep federal role in mortgage market

President Obama has directed a small team to develop a proposal that would maintain the federal government's role as the insurer for most homeowners' mortgages, the Washington Post reported Monday.

The decision represents a "major milestone in the effort to craft a new housing policy from the wreckage of the mortgage meltdown," according to the Post.

Depending on how the proposal is finalized, Fannie Mae and Freddie Mac, the two government-owned mortgage finance giants, could be preserved, though with new names and constraints. No official decision on a proposal, which is likely to face criticism from many Republicans and economists, has been made.