How ironic that these institutions were set up in the 1930's to deal with widespread foreclosures as a result of the Great Depression. It was a way to stablize home values at the time. They went "private" in the 1960's and like some giant banks were simply to big to let fail this time.
The replacement process should be two fold.
1. They can't be SO BIG they cannot be allowed to fail. Same principal Obama is looking at now for other corporations. Size has to be limited in some way.
2. This is the tricky part, Government run or privatized? It really wasn't clear before, it was "private" but it was also "quasi Government". I'm not sure what the best approach is on that issue.
In casting "blame" (we are SO good at that here
) you have to look at the private sector managers as well as the Government on this one.