In the five years since the housing meltdown, it's become an evergreen topic: What to do about the housing market in disarray? Since the peak, values have fallen 30 to 40 percent across the country, depending on your data source, and about 11 million homeowners are burdened with underwater. Even with interest rates at historic lows, but there's no robust turnaround in progress.

That matters not just to the housing and banking industries, but to the nation as a whole, said former HUD Secretary Henry Cisneros. We can't abandon the goal of wider homeownership, he said; it's how the middle class built its wealth. Home equity will be key to the aspirations of America's next middle class, sure to be composed largely of ethnic minorities.

The government's role in supporting (or undermining?) those aspirations, however, was a prime controversy on the panel. Freddie Mac and Fannie Mae, the so-called GSEs, are seen by many as villains in the subprime mortgage bust that wounded the economy.

Lewis Ranieri, who pioneered the mortgage-backed securities market decades ago at Salomon Brothers, worries that the instruments are being demonized and shackled by public policy. The market worked just fine for about 30 years, he said. Then the government used it to promote social engineering.

Amid that agenda, industry and officials "did it badly.… We created consumer tragedy." Now he warns that regulators are creating so much uncertainty about the rules of the game that a housing recovery may be stifled.

Sen. Bob Corker added his voice to the criticism. The market is being remade by regulators in private, the Tennessee Republican complained, calling out in particular the Consumer Financial Protection Bureau. He's a little iffy about his own colleagues as well, saying that the Senate needs more education about these complicated issues. After the November election, we might see some fruitful legislation, he figures, perhaps as part of a grand fiscal bargain between the parties. Among other reforms, interest deductions for second homes may be shredded.

Virtually all the panelists agreed that mortgage securitization in some form will be needed to foster liquidity in the market, but it has to be done right.

An audience member asked whether there will be buyers in the next round of securitization, considering that MBS were blamed for practically bringing down the world economy. Ranieri answered that demand would depend on whether the bonds are totally transparent. Cisneros thought so, too. The underlying assets will be American real estate, he said with some pride. Investors will find that attractive - considering their options elsewhere.