Mortgage C.A.F.E.- Credit And Finance Expert

Be afraid.  Be very afraid. 

That's what the news is saying.  I actually agree this time.  If these two giants in the housing industry were to crash it would make the subprime typhoon look like a hosedown from my son's supersoaker.  Realize that the markets affected by the subprime crisis a year ago started a WAIVE of issues across the world.  When people were late on their credit cards, HSBC Bank, Citi, and other big credit card companies started doing writedowns in the billions of dollars.  HSBC is the largest bank in Europe.  Hence the issues in London, and the downturn of their economic times and housing market.  The largest bank in Canada, almost the same situation.  What do you think it did to their market?

If Fannie and Freddie were to fail as a SYSTEM of housing that has been balanced for many decades, it would throw our currently teetering recession into a downward tailspin.

I would highly suggest the gov't taking over the bodies it created a long time ago, and save the day, yes, with our tax dollars.  I don't see a choice.  Realize that at least our dollar is currently still OKAY.  What if these two giants tanked and the WORLD considered our dollar worth only 50 cents.  I'd rather pay a few extra dollars of taxes for everyone $100 earned, than to have $100 earned be worth $50 on the street, and inflation to sky rocket due to that trade issue. 

That's just my opinion....