After this mess is over, the federal government should not begin regulating the mortgage market where the rubber meets the road.  That is to say, the federal government should not dictate the terms of mortgages to private entities.  This would handcuff the financial system to regulations that would have to be adjusted almost constantly.  Furthermore, regulations would create distortions in the marketplace as actors seek to find ways around them, which given the complexity of the mortgage market across income levels and geography, they would be certain to do.  Any attempt to regulate mortgage terms would be futile and would do much more harm than good.

However, there are two policy changes that the federal government should address:

1)  Use Fannie Mae and Freddie Mac to encourage better lending practices.  The GSEs buy up roughly 40% of the nation's mortgages.  Though most of their products are relatively safe and their subprime portfolio was minuscule - they will almost certainly gobble up a larger share of the market now after the takeover and the failures of several investment banks.

2)  Regulate Capital:Leverage ratios.  Had the banks not been so capital constrained, they would not have all had to offload assets simultaneously, creating a "run on the bank" and driving prices down. 

This 2nd policy is essential.  Since we are not likely to see another housing bubble such as this one, policies directed specifically at the housing market are likely to simply create barriers to market transactions.  Policies aimed at maintaining a level of liquidity will protect against unforeseen problems in the future.