Will Subprime Mortgage Crisis Capsize Fannie and Freddie?

Last August, I wrote that Fannie Mae and Freddie Mac would not be impacted by the Subprime Mortgage Mess. (See Will Subprime Mortgage Crisis Capsize Fannie Mae?)

However, a recent article in The Economist reports that their ability to pump liquidity in the market could be compromised. This is despite the fact that subprime mortgages are only a small portion of the agencies' portfolios.

To find out more, or if you are not familiar with how these important agencies function in the secondary mortgage market, then read Fannie Mae, Freddie Mac and the Subprime Mortgage Crisis.