I thought the problem was that these had a implicit guarantee of the US Government / Fannie / Freddie. With that guarantee, why did they go down in value even if people defaulted on their mortgages?|||Not all mortgage backed securities were sold by Fannie/Freddie. A whole bunch were sold by Wall Street outside of those two. Trillions worth. And among those mortgages were a very large amount that were not worth the paper they were printed on--interest only mortgages, adjustable rate mortgages, no money down mortgages. Surprisingly, the paper was snapped up by a whole lot of people who should have known better. And then there were the mortgages that were held by a lot of banks that should never have issued them. How many banks have failed during these last two years? 600? If the government had not handed C and BAC all the money they wanted those two would have failed also, but we can not let those very large banks fail now can we.
As for the two twins, what have they cost we taxpayers so far? 600 billion is it?
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