The state of this country’s housing finance system is in a precarious position, to say to least, and in effort to help influence the way it recovers, the Mortgage Bankers Association (MBA) – along with numerous other organizations – have set forth their own principles on how it should be done.

Here is what the national organization is calling for:

• A stable housing sector is essential for a robust economic recovery and long-term prosperity. Housing, whether through homeownership or rental, promotes social and economic benefits that warrant it being a national policy priority.

• Private capital must be the dominant source of mortgage credit, and it must also bear the primary risk in any future housing finance system.

• Some continuing and predictable government role is necessary to promote investor confidence and ensure liquidity and stability for homeownership and rental housing.

• Changes to the mortgage finance system must be done carefully and over a reasonable transition period to ensure that a reliable mortgage finance system is in place to function effectively in the years ahead.

What do you think? Should the federal government play a smaller role in housing financing? There’s been talk for a while of simply getting rid of Fannie Mae and Freddie Mac. Would something that drastic cure our housing woes?

But the MBA isn’t saying it wants to get rid of the government’s role entirely. The association states it believes a clearly defined role for the government is essential to preserving financial stability, with support through various insurance and guarantee mechanisms in order to facilitate long-term fixed-rate mortgages, affordable financing for low- and moderate-income borrowers and financing for rental housing in all parts of the country.

Bringing in more private investors does have its risks. The MBA said in order for private investors’ roles to work, it’s important that they understand the risks and rules involved. “It will be important to provide clarity and certainty to the marketplace in a manner that promotes recovery and growth,” the MBA said in a statement.

The other organizations involved in the housing finance principles include: American Bankers Association, American Financial Services Association, Community Mortgage Banking Project, CRE Finance Council, Housing Policy Council of the Financial Services Roundtable, Independent Community Bankers of America, Manufactured Housing Institute, Mortgage Insurance Cos. of America, National Apartment Association, National Association of Home Builders, National Association of Realtors, National Council of State Housing Agencies, National Multi Housing Council, Real Estate Roundtable, and the Securities Industry and Financial Markets Association.