By Al Yoon

NEW YORK, Aug 18 (Reuters) – In March of 2000, American homeowners got a scare.

Gary Gensler, a U.S. Treasury undersecretary, threw his support behind legislation whose impact could have jacked mortgage rates up to levels that would fly in the face of what lawmakers say is good for the nation: expanding homeownership.

He wanted Treasury to cut ties with Fannie Mae and Freddie Mac — companies whose federal charters make them the key vehicles for Washington’s housing policy and mortgage market intervention.

It was a test of the companies’ political backing, and the companies won. Lobbyists killed the effort amid a housing boom cheered by homebuyers and their political representatives, underscoring the power of the American dream of home ownership and its ability to drive the political and financial agenda.

One decade and a wrenching financial crisis later, social agendas remain the stumbling block for the “fundamental change” demanded on Tuesday by the Obama administration as it tries to fix a housing finance system central to a crisis rivaled only by the Great Depression.