The two companies that insure or own almost half of all American mortgages (estimates range from $4.5-6 trillion worth) have been in the news a heckuva lot lately, and usually for lousy reasons. The government has bailed out these companies, in part because many feel they are “too big to fail”, and that if one or the other of these government sponsored enterprises (GSEs) shut down, the effects on the mortgage market and consumer confidence may be too great to recover from, and the U.S. could slide into a deep recession.

News came out today that the U.S. Treasury Department has hired one of Wall Street’s heavy hitters, Morgan Stanley, to assess what’s going on in these two companies. Morgan Stanley will thankfully do the work pro bono, and will act as a consultant to Fannie Mae and Freddie Mac. The question is this: will it make any difference? FNM and FRE are both down tremendous amounts in the stock market over the past year, and this may be the clearest indicator of how investors and society in general feel about the future prospects of the two.

The Treasury reiterated today, upon releasing news of their hiring of Morgan Stanley, that they are not planning to loan Fannie or Freddie any money, at least not yet. The fact that it is even in discussion that these two huge GSEs would even need a loan is pathetic, but it reflects the surmounting losses in the mortgage market as the U.S. struggles with a housing crisis. how much longer will they make home possible?