The trillion-dollar mortgage time bomb - Risks are rising that Fannie Mae & Freddie Mac need bailout

[Liberal_in_LA]

http://money.cnn.com/2008/04/21/news/economy/fannie_freddie/index.htm?section=money_mostpopular

The trillion-dollar mortgage time bomb
Risks are rising that Fannie Mae and Freddie Mac may need a government bailout that could cost far more than previous rescues.

NEW YORK (CNNMoney.com) -- Among the nightmares lurking around the corner for the already battered housing and credit markets would be a meltdown at mortgage financing giants Fannie Mae and Freddie Mac.

Although few are predicting an imminent need for a bailout just yet, credit rating agency Standard & Poor's recently placed an estimated price tag on this worst case scenario -- $420 billion to $1.1 trillion of taxpayer's money.

[End Of The Road]

1. I've suspected that they've needed a bail-out for a long time

FNMA has been in trouble for years now, ever since that accounting scandal with Raines -- when was that, 2004?

[glowing]

2. There's a quick vote on there.. What are you most concerned about?

gas, food, housing, or healthcare.... I really wish that CNN didn't go to school with Bush.. Hello, they are all concerns and all tie into one another.. If we had Universal Healthcare, costs would see a huge decline.. as people have access to preventive care.. Housing is tied in with the economy which is tied into losing jobs and gas prices and food prices..... So, its not just one subject.. they all intertwine and they are all in need of some major repair.

[sicksicksick_N_tired]

3. Uh,...they are already federally guaranteed, aren't they?

What I want to know is whether the debtors are FEDERALLY GUARANTEED!

:shrug:

[End Of The Road]

5. They're not really federally guaranteed.

They're government sponsored enterprises with federal oversight, but I think the legal financial responsibility of the government is rather small. That's the theory, anyway. If they were to fail, there would be a world-wide financial mess that we don't want, so in practical terms, yes, they're federally guaranteed. Screw us, huh?

[PDJane]

4. The money would be better spent

Keeping people in their homes. If Fannie Mae goes down, it's simply greed.

[soothsayer]

6. I don't think their exposure is as big as S&P thinks it is. On the other hand...

what the hell do I know?