Three top Federal Reserve officials aggressively pushed on Friday for more stimulus for the U.S. housing market, saying that other government policymakers as well as the central bank should be looking at ways to help the sector in order to speed the economic recovery.

In separate speeches, the Fed officials -- William Dudley, the president of the New York Federal Reserve Bank; Fed Governor Elizabeth Duke; and Eric Rosengren, president of the Boston Fed -- warned that the fragile housing sector threatens to derail a U.S. recovery.

Their remarks came even as a robust government jobs report provided fresh evidence that the recovery is gaining.

The push for action came two days after the Fed entered the thorny debate over how to use the two main government-run mortgage finance firms, Fannie Mae and Freddie Mac , to turn around the housing market.

The housing sector was at the heart of the financial crisis and recession and has continued to hamper the recovery.

A 33 percent decline in U.S. housing prices since 2006 has resulted in an estimated $7 trillion loss of household wealth, and about 12 million U.S. homeowners are currently underwater on their mortgages.

Policymakers need to consider more action to kick-start housing and to help the country's frustratingly slow economic recovery and unacceptably high unemployment, Dudley said in a speech in New Jersey.

Monetary policy should work to complement actions by other U.S. government policymakers, which together could help to stabilize home prices and turn around the housing market within a year or two under good conditions, he said.

Duke, speaking in Richmond, Virginia, said new policies that rely on Fannie and Freddie, the government-sponsored enterprises, are necessary.

Policymakers should at least consider policies that take into account the role the GSEs could play in hastening the healing of the housing market rather than focusing entirely on minimizing losses to the GSEs, she said.

Rosengren, the Boston Fed chief, said one way to shore up housing would be for the central bank to buy more mortgage-backed securities.

Given the low inflation rate and weak labor markets that are both likely to persist this year, I believe the Federal Reserve should continue to explore ways to promote more rapid recovery through stronger growth, Rosengren told a business group in Hartford, Connecticut.

Dudley, Rosengren and, to some degree, Duke are considered part of the Fed's dovish wing -- more concerned with strengthening the economy than trying to contain inflation. Their speeches could set the tone for the central bank's more activist members this year.

Dudley, as head of the New York Fed, and Duke hold permanent votes on the central bank's policy-setting committee; Rosengren will rotate into a voting seat in 2013.

The Labor Department on Friday reported the biggest gain in nonfarm payrolls in three months and said the jobless rate dropped to a near three-year low of 8.5 percent.

Rosengren said that while the job growth is better than had been seen recently, it is still not enough to return the country to full employment.

Duke on Friday said the Fed's current stance of monetary policy is appropriate, with considerable risks both up and down to her forecast of moderate growth.

Prices for U.S. government debt rose Friday as the Fed officials' calls for further stimulus overshadowed the good news on the economy, while stock prices slipped. The dollar rose against the euro.

WHAT TO DO WITH FANNIE, FREDDIE

The Fed has bought Treasury debt and, to a lesser extent, mortgage-backed securities as part of its so-called quantitative easing efforts over the last three years, totaling $2.3 trillion in purchases. In response to the worst recession in decades, the Fed late in 2008 also slashed interest rates to near zero.

The purchase of mortgage securities, however, was a controversial part of the first round of easing in 2009, known as QE1, drawing criticism from some officials for propping up a specific sector of the economy.

The use of unconventional policy tools has been completely appropriate to help the Fed achieve its mandate of maximum employment and price stability, Fed Governor Sarah Bloom Raskin, also a voter, said in a speech in Maryland.

Dudley, who in the past suggested the Fed could potentially do more to drive down mortgage rates, said: Monetary policy and housing policy are much more complements than substitutes.

On Wednesday, in a paper sent to Congress, the Fed under Chairman Ben Bernanke argued that Fannie Mae and Freddie Mac could boost the recovery if they were allowed to provide cheaper mortgages to a broader pool of homeowners.

Dudley on Friday called the paper a thoughtful analysis of housing policy.

A truly comprehensive approach, he added, would also include long-term reform -- including reform of Fannie Mae and Freddie Mac -- to put housing finance on a more stable footing and to equip the market to deal more effectively with any future systemic shocks.

The two firms, the biggest sources of U.S. mortgage funding, were seized by the government in 2008. They have been propped up by $169 billion in taxpayer aid since then, making them a target of many on Capitol Hill.

The Fed is to hold its next policy-setting meeting January 24-25, when a new slate of four regional Fed bank presidents will rotate into voting seats. Any further action could hinge tightly to prospects for the stubbornly high U.S. unemployment.

(Reporting by Jonathan Spicer in Iselin, N.J., Ben Berkowitz in Hartford, Conn., Margaret Chadbourn in Richmond, VA, Dave Clarke in Baltimore, and Ann Saphir in Chicago; Writing by Jonathan Spicer; Editing by Leslie Adler)

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