Read this story about the burden that will be shouldered by the US tax payers over the losses that are suffered by Fannie Mae and Freddie Mac: http://www.cnbc.com//id/46106075Here is the background to this state of affairs:
...- The real estate market in the US was a bubble for one or two decades before it finally burst in 2008
- During this period, large profits were made by developers, real estate agents, mortgage bankers and other people connected with the trade
- The home owners were enticed to pay high and unsustainable prices for the property
- The purchases were funded by mortgage banks and insured with Fannie Mae, Freddie Mac and other insurers
- Bad financial products such as sub-prime mortgages and collateralized debt obligations (CDOs) were created to fund these unsustainable prices
With the bursting of the bubble, the drop in real estate prices have to be shouldered by the home owners, the ...
