Most Hated Man in the U.S., or Savior of Homes

Should the most hated man in America be a faceless bureaucrat by the name of James Lockhart? You don't know him. Nobody outside the Beltway does. But he is at the heart of the chokehold on America's mortgage markets. When the book is written, Director of the Office of Federal Housing Enterprise Oversight (OFHEO) Jim Lockhart might be the man who is responsible for making more unforgotten men forgotten (and here I refer to the title of the excellent book on the Great Depression) than anyone since Herbert Hoover.

First of all, I don't want to make it sound that Lockhart means badly. What bureaucrat does? He was put in by President Bush to keep Fannie Mae (FNM - commentary - Cramer's Take) "clean" after a series of debacles at Fannie that are all well-documented. And awful. Fannie was very poorly run.

Plus, if you are looking at it from President Bush's perspective you have to believe that Fannie Mae seemed anachronistic, a quasi-government entity created by FDR to make it so hardworking middle-class and lower-middle-class people could buy a home. In the last 20 years so many entities have gotten into mortgage lending and loan repackaging, who needed Fannie?

But now there is a gigantic 1930s-like freezeup again. Think of it -- American Home (AHMIQ - commentary - Cramer's Take), New City Financial, Fremont General (FMT - commentary - Cramer's Take), and all the other ne'er-do-wells are no longer in the game and the big banks like Wells Fargo (WFC - commentary - Cramer's Take) don't want to extend the credit to mortgage brokers anymore. We can't just rely on Countrywide Financial (CFC - commentary - Cramer's Take) for heaven's sake?

So Fannie Mae needs to get into the game, gets its caps lifted and help people. Lockhart has the ability to step aside, or better, take a leadership role in saying he will maintain oversight but that the caps on Fannie's lending should be raised.

Many people, mostly uncreative ones, have said, "Don't even think that Fannie Mae will come to anyone's rescue. It only backs up loans that have insurance and the loans aren't for big amounts."

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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