Some more information for you so you'll be fully armed when you start the fiscal biatch slapping:
Some hedge funds that backed subprime lenders knew their loans were poorly written, but if a conforming loan (under conforming loan limits by fannie/freddie standards) was written outside of fannie/freddie guidelines, no sweat.......they would buy the toxic loan in a pretty package of good loans 12 mos. later. Why? The toxic loans were only 1-3% of the total pretty packaged loans. Should fannie/freddie have ever bought those?
It's done now. Take comfort in and faith that it's not something that will ever be repeated in our lifetime. We are trying to clean up. One issue I see for the next wave of foreclosures is that these people most likely would not be in default had the economy truly been stimulated.....i.e. small businesses and individuals......not billions of dollars given to a handful of major corporations.
I think we have about 18 mos. of this (maybe less), then as we have been slowly correcting out of the contraction, we should be in good shape on the other side.....except for the trillions of debt we carry as a nation.