This column was originally published on RealMoney on Aug. 9 at 1:01 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Should the most hated man in American be a faceless bureaucrat by the names 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

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"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)

,

New City Financial

,

Fremont General

(FMT)

, and all the other ne'er-do-wells are no longer in the game and the big banks like

Wells Fargo

(WFC) - Get Wells Fargo & Company Report

don't want to extend the credit to mortgage brokers anymore. We can't just rely on

Countrywide Financial

(CFC)

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."

They are missing the point

TheStreet Recommends

entirely

.

Right now, FEMA provides disaster loans and has an organization to do so that will help the little guy in the case of a natural disaster. Insurance helps, too, but many people aren't insured and many people need help to tide them over.

We have a financial tsunami on our hands. Sure, some of it is caused by people who didn't know what they were doing and took down 2/28 loans they can no longer pay. Some mortgage companies and homebuilders sold loans too aggressively to people who couldn't afford them, and there was little regulation. The housing market was so hot it attracted massive speculation -- and we should not bail out those speculators, although I believe most of those guys are kaput already. Alan Greenspan encouraged taking of the teaser rates -- and then raised rates 17 times, making it a nightmare for those who took the bait.

I don't care anymore.

We have, by my estimation, 7 million households that could lose their homes because of this mess. They have

no idea

what to do.

Why couldn't Fannie Mae be allowed to be FEMA in this case for these people?

I know it isn't set up to do that. I know that. But even if it

were

, judging by everything Jim Lockhart has ever said or done he wouldn't go for it. Neither would President Bush.

But that's what is needed.

And Lockhart, the man who has a chokehold on the carotid artery of Fannie Mae, is the one who could allow this to happen.

That he won't is why he could end up being the man most directly responsible for the first Okie exodus since the 1930s.

What a legacy.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider American Home Mortgage and Fremont General to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

At the time of publication, Cramer was long Fannie Mae.

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

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