Will Clint Eastwood walk through the streets of Minneapolis, proclaiming how the U.S. mortgage industry is back? If you’re not sure what I’m talking about, go see last weekend’s Chrysler/Fiat commercial during the Super Bowl. (As an aside, I think the whole political take on that commercial has been blown way out of proportion.) Anyway, the U.S. auto industry was bailed out – and it mostly worked (for now). Wall Street and parts of the housing industry got bailed out too, but so far only one has recovered: the Street. The White House correctly believes that the only way for the U.S. economy to roar is if housing returns to health – but it keeps making the patient sick by jamming too many regulatory ideas down its throat. Meanwhile, Uncle Sam owns Ally Financial lock, stock and barrel and it would love nothing more than to take this thing public and recoup its $15 billion (taxpayer) investment. But Ally has a problem: its mortgage unit which continues to lose money – though it may be seeing the light at the end of the tunnel. No IPO of Ally can happen without a profitable mortgage unit. From what we hear, the White House would love to IPO Ally before the fall election so Republicans can’t hang the price tag around Obama’s neck. Will Ally try to sell its entire mortgage division, clearing the path for an IPO? Maybe, maybe not. It’s possible it may create a ‘bad bank’ mortgage company and sell that to hedge funds – or at least try. Stay tuned.