Fannie Mae & Freddie Mac: Too Big to Wind Down?

I was a programmer for an international bank, that was selling CMO's for Freddie and the Bond Market Association.
The formula I was given to apply to CMO's, did not contain "a default rate" (people who can no longer pay the mortgage).
I asked why this variable was missing, and at first they were shocked that I could look at a calculus formula and recognize @#$%. The first reaction, was to tell me this was covered via PMI...I then pointed out that at best PMI would cover an 85% of the loss, and therefore, the varialbe was still important....At that moment, a big-wig left the room, while another well paid member of the company told me that people smarter then him and I came up with these formulas. I just wish I would have known enough to ask how to invest in the collapse, because at that moment, I knew the system was a government run fraud.

For those asking where the arrests are....
fyi:
* Quasi Government Freddie and Fannie packaged mortgages for sale.
* Quasi Government Agency "The Bond Market Association" (now sucked into SIFMA), MARKETED THE investments, as "the safest investments...
* Bill Clinton told Freddie and Fannie they could not "cherry pick", they had to stop rejecting any mortgage from the mortgage pools.
* NY's current Governer, Cuomo tried to put welfare trolls into mortgage pools, because they would not pay rent. (When he was HUD secretary).
* Greenspan dropped interest rates from the time he came into office from 12% to 0% when he left.
* Pooled mortgages were 700 trillion years ago, this is a number bigger then can be reasonably fixed.
* Pooled mortgages, are sold on the stock market via "traunches", and therefore each mortgage might be in three or more stocks.
* Pooled mortgages, have a loan in the pool, from which they bought the mortgages. Therefore, there is actually, ZERO assets in a mortgage pool.
* Stocks by definition, cannot be worth less then zero....this fundamental rule has been broken by mortgage pools..
* Housing prices may have no where to go but down, as every part of the system is streatched to breaking.
However, QE might be able to make everything cost more, including housing, lol. (Ouch, I feel bad for the retirees, or those 55 or older or near retirement.).

So, Freddie and Fannie keep house prices artifically high.
Geez.....How did we ever get into this pickel....(Thanks Greenspan, that was an excellent idea to take interest rates from 12% to 0% during your term.).

Freddie and Fannie have always been top compain contributors.
So, for all the talk, nothing is ever done.

I find it offensive that the US Taxpayer is the backstop against a freefall, but if they make lots of money, then the "investors" make money. They also have incentive to lie about the true numbers, and our elected officials just laugh.
It's likely not a moral combination of private and public interests.
Make it public or private...but not both.

House prices need to reflect real affordability, not some fake, bloated credit model

I offer a Trifecta approach or the Killer B's:

Kill the Bankers
Kill the Brokers
Kill the Bondholders.

Massive Revolt against FINANCE.

As they say, the Masses have the numbers, if they would use them.

Getting rid of Fannie and Freddie. Reason for.... WE....MUST....FIGHT....COMMIEISM....

Instead, how bout sharing the economy with the Peasants through real growth in their wages so they can afford there own house without aid. All Fannie and Freddie ever really did was to pump the Finance Industry. @#$% few additional people where ever helped into owning their own home by Fannie and Freddie anyway. A slightly lower interest charge. Woopdedoo. ;-)

Why are lower house prices bad? Why do houses need to remain at bloated levels? Why shouild people be slaves to their house payment?
It's time for house prices to come down to affordable levels instead of inflating it and propping it up.
End this crap. The re whores appraisors mtg brokers and builders seem to scoot much of the blame they were in the middle of this ponzi scam.
And it was NOT lose lending it was FRAUD lending. Where are the F%$# arrests?

This comment comes from one of the many jobless people whose job was taken away more than once by the collapse. I am still recieving unemployment, which some are not as lucky to have. All I see from Wall Steet is Money grabing crooks telling us it's not their fault. I DO NOT BUY IT. I am Not a tea party advocate. They are also mislead. I feel as though america let me down. Freddie and Fannie saved us? No Way did they save us! They put us here in the first place. Let the crooks take the fall and start making your own food in a garden. That is the only safe bet. It's gonna happen if you or I want it to or not.