People now have the power to reshape Fannie, Freddie

Americans need to stop thinking of themselves as victims of Wall Street greed and regulatory negligence, and start thinking of themselves as newly minted owners of one of the largest mortgage infrastructures in the world.

Fannie Mae and Freddie Mac could be the silver lining of the Wall Street bailout, presenting a unique opportunity understood by few Americans. We need to wake up to the fact that in addition to owning a pile of toxic subprime mortgages, we also own two massive mortgage companies we can repurpose for our benefit.

As taxpayers who begrudgingly came to the aid of failing lenders, we now have an opportunity to combine Freddie and Fannie into a more “homeowner friendly” mortgage company. As owners, we now have the right to change the rules and develop mortgage products favoring taxpayers instead of lenders.

To start, we should create new “retirement mortgages.” Retirement mortgages would be similar to conventional mortgages, but where traditional mortgage lenders keep all the interest paid over the life of the loan, retirement mortgages would rebate a large portion of the interest back to the consumer at the end of their loan.

These funds would be deposited into the consumers’ individual retirement account, Social Security account, health savings account or some combination of all three. This is significant because the average homeowner with a conventional 30-year mortgage worth $150,000 actually pays more than $350,000 in principal and interest during the life of the loan. That’s more than $200,000 in interest.

But here’s the real bonus: It will help avert the next major financial crisis, the looming Social Security bubble, because American homeowners will have been saving for their retirement every time they make a mortgage payment.

Retirement mortgages are also a good idea because they will help stabilize the housing market by making homeownership more attractive. They will also put a safety net under the recent $700 billion bailout because as consumers refinance their private sector conventional mortgages into taxpayer owned retirement mortgages —- beginning with the most credit worthy —- billions of dollars of healthy mortgage securities will flow into the new system.

Clearly this is an idea outside the realm of historical mortgage lending practices. But we owe it to ourselves to at least begin the larger conversation regarding all our available options. This country is faced with unprecedented debt: Wall Street bailouts, Social Security and Medicare bubbles, a $3 trillion war, and record foreign debt. We must meet the challenge head-on, and quickly, with new and innovative ways of solving fiscal problems.

Critics will say that converting Fannie Mae and Freddie Mac into a taxpayer lender is just another intrusion of government into our private lives —- that the private sector should run business and government should remain in the background. Normally I would agree, but the current fiscal crisis makes that argument moot. What is clear is that large-scale change needs to be made.

As reluctant owners of Freddie and Fannie we now have a solemn obligation to future generations to manage these assets responsibly. As taxpayers, we did not ask to get into the mortgage business, but in it we are. We need to make the best out of it. I believe it is time for a more equitable relationship between lender and consumer.

That would be a bailout I can live with.

> Tim Lynch, a businessman, lives in Orlando.