Fannie Mae Freddie Mac Attack

I am not too embarrassed to admit I really don't understand any of this current Wall Street mess. Or why the Federal government, meaning the taxpayers, are about to bail out the mess with 700 billion bucks. That's $2000 for every man, woman and child in America.

I remember the first time I ever heard of Fannie Mae was way back in Economics 101 in college. I thought it an odd childish sounding thing to call what I think then was a federal agency. I'm probably wrong about that. I did not get good grades in economics. I don't think Freddie Mac had been invented yet.

I know Fannie and Freddie have something to do with shoveling out money to those who lend money to those who can't afford the money they are borrowing.

Back when the flood of foreclosures started up I don't recollect there being any sort of emergency program proposed to help those caught up in bad loans.

So, Mr. Bad Debt loses his house, the bank then takes possession of the house. The value of the house may have taken a hit, but it is still able to be sold to a new buyer. So, the banks loaned out all this bad credit, that didn't get re-paid, putting the banks in jeopardy. I guess that's it. But how did it add up to almost a trillion dollars?

I really don't get it. Why is 7/10s of a trillion dollars needed to rescue the money lenders? And why is there this rush to get this legislation passed in record time? Where did all the money that got loaned go? Why hasn't there been some sort of effort to fix the bad loans, as in re-structure the loans that suddenly had their monthly payments go way up to the point the home buyer could not afford the mortgage payment? Why wasn't/isn't that where the fix is?

Like I said, I did not do well at economics in school. It was very confusing to me. Still is.