One benefit of our financial crisis is that it gives us a chance to rethink the way Americans finance their purchase of homes. Congress and the Obama administration are starting to think about how to reform federal institutions–such as Fannie Mae, the Federal Housing Administration and the Federal Home Loan Banks–that were created during the Great Depression and somehow managed to stay with us into a new century.

But we may be starting that debate with a false premise: That we need to preserve at all costs the 30-year fixed-rate mortgage with an option for the borrower to prepay at any time. That is the assumption of a new set of mortgage-reform proposals released today by the Center for American Progress.

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