As the President’s slap-dash State of the Union announcement on mortgages made clear, housing policy so far consists of expedience, vengeance, intransigence and — most pernicious — avoidance in about equal measure. Too bad, as the mortgage morass remains the quicksand bogging down the economic recovery. The EU crisis isn’t helping the U.S. out of our mess, of course, but there’s precious little we can do about it. In contrast, there’s a lot we could do on the home front – but we just don’t.

First to expedience. As was sadly evident, the President’s announcement was sparse on details. In the State of the Union, Mr. Obama said the Administration would send Congress a proposal at some point sometime soon in which the FHA would do something about under-water borrowers. All borrowers, including those not current on their payments, or just some borrowers? What premium? All LTVs? All mortgages, including those booked in 2009 and beyond that are doing nicely thank you even if a bit below market value? The answer to these and other critical questions are vital because depending on how this program is designed, it could essentially nationalize U.S. mortgage finance. – not a pesky detail that can be left for later, in our view.

On to vengeance. The Administration of course couldn’t propose still more tax dollars to pay for the FHA, so it turned to the nearest patsy it could find. In this case, it was big banks (on the expedience front, Congress tapped out the GSEs late last year in a middle-of-the night hike in their guarantee-fees to pay for the payroll-tax extender). The Administration had hoped to announce a juicy settlement with big mortgage servicers in the State of the Union, but failing that, it turned to a big fee from the pockets of big banks (whether or not actually in the mortgage business). For good measure, the President promised to set the gumshoes on errant mortgage financiers, putting yet another task force on this increasingly tired case.  Intransigence? Here, we have several examples. FHFA’s unwillingness to use its conservatorship authority in anything but a caretaker role is first up. FHFA has our condolences – the conservatorship forces decisions on FHFA and its acting director neither should have to make – see our avoidance discussion below. But, the longer the GSEs do as little as possible and charge as much for it as they can, the deeper the mortgage dead zone. FHFA’s been talking for months about REO dispositions and new private-capital risk-sharing programs. Talk without action perpetuates uncertainty and, with it, stalemate. It’s not that hard, really. Call something a pilot to ensure a bit of CYA and do it.

But, FHFA isn’t the only stubborn soul stalling a mortgage-market recovery. The FRB’s white paper earlier this month was mostly focused at FHFA, trying to get it to move on principal reductions. Nowhere did the central bank mention its own role in promulgating rules – risk retention at the head of the list – that also keep anyone with any capital out of the game. The U.K. is looking at its rules to be sure they aren’t so stringent that they choke off recovery, but the Fed and other U.S. bank regulators so far refuse to follow suit.

And, now, avoidance – which brings us back to the Obama Administration. It didn’t create the GSE crisis or the FHA’s fragile finances. It got them when it came into office in 2009. But, since then, it’s done nothing much about either of these urgent issues. To be sure, the overall financial crisis was the right top priority. But, once the Administration got most of what it wanted in Dodd-Frank, it should have lived up to its promise to do something about the GSEs. The long-awaited February white paper was a nice academic discussion of which pieces go where, but the three options on which the Administration refused to opine did little to advance action. And, of course, since then, that’s where matters stand.

Accidental housing policy has done real damage to homeowners facing foreclosure, mortgage servicers confronting legal risk, mortgage lenders unsure of what to offer and mortgage securitizers stuck on the sidelines. Now, as inaction turns to impulse, the damage could extend even farther, leading to de facto nationalization of residential finance – a result strongly opposed by the Administration, Congress, the industry and the public.

.