When mortgages backed by Freddie or Fannie fail YOU pay the bill.

[dkf]

Fannie and Freddie represent about half of the mortgage market. So when you think greedy banks are taking the hit on the defaults you are right only half the time. The other half you the taxpayer are ponying up the principal and interest payment that the people with the mortgages didn't.

This also means that cramdowns on these Freddie and Fannie backed bonds comes directly out of the taxpayers pocket, either now or future taxpayers who have to pay off the deficit.

In the latest quarter Freddie asked for $1.8 billion bringing it's total to $64 billion.

Fannie asked for $1.5 billion bringing it's total to $86.1 billion.

[Dhalgren]

1. When banks that pay CEOs millions of $/yr. fail YOU pay the bill.

In this society YOU pay and rich receive - simple...

[dkf]

2. Banks are the true beneficiaries of the GSEs

I'm not sure what the mortgage market would look like if there were no guarantees. I imagine their volume would shrink dramatically.