The Treasury Department will delay their report on how to deal with the mortgage giants Fannie Mae and Freddie Mac. Originally scheduled for the end of the month, it will now get released in mid-February. Republicans grumbled about the “great concern” over the delay in the release. But their concern, if anything, is connected to the pressure they’re getting from housing market bigwigs to maintain an implicit guarantee:

A push by Republican lawmakers to scale back government backing for home mortgages is meeting resistance from the housing industry, a longtime ally of the party.

In recent months, banking executives and mortgage investors from groups including the Financial Services Roundtable, the Mortgage Bankers Association and the National Association of Real Estate Investment Trusts have met with Republican lawmakers and their staffs to press them on the need for a permanent government role in guaranteeing mortgages.

But many Republicans blame government-controlled mortgage giants Fannie Mae and Freddie Mac for fueling the housing bubble that helped spark the financial crisis, and some new members of Congress want government to take a smaller role in the economy. That has some lawmakers pledging to resist any effort to revamp the U.S.’s system of housing finance that would leave taxpayers exposed to losses.

This is going to be fun to watch. Conservatives’ entire argument for the financial crisis is that Fannie and Freddie lent to poor people and bankrupted the economy. That’s a completely ridiculous scenario. But the logical result of that theory is to pull up the guarantee and privatize Fannie and Freddie, something their well-heeled allies in the housing industry manifestly don’t want.

Even the most rabid anti-GSE types, like Randy Neugebauer, pulling back on their initial hope of an immediate liquidation of Fannie and Freddie, saying that “incremental reforms” are needed over a 10- to 15-year time horizon. But the Republican Study Committee report calls for Fannie and Freddie to be privatized immediately, resulting in $30 billion of their immediate budget cuts in 2011. And Jeb Hensarling’s legislation proposes a five-year time horizon. None of this fits together.

The housing market is moribund even with Fannie and Freddie propping it up. Keeping the GSEs as they are is politically untenable and even unadvisable. But the mortgage industry loves it, especially now. Among the right answers is to raise the fees Fannie and Freddie charge for securitizing mortgages, to balance the relationship between the guarantee from the government and the private market. And actual underwriting standards would be nice. But that won’t be palatable to Republicans either.

It’s going to be hilarious to watch the tea party and the housing industry fight this one out.