[Toddsterpatriot]

Those ill conceived mortgages are resold to Fannie Mae/Freddie Mac and, if there ultimately are too many bad loans to cover from their reserves

So when you said this:
This sort of scheme only works for the duration of the value bubble then..., the "homeowner" walks away leaving the TAXPAYERS to ultimately "pick up the tab"!

You were guessing. Because it hasn't happen before.

I don't suppose you know what these reserves are?

[ExSES]

I don't suppose you know what these reserves are?

Not right off hand (and if I did, I doubt that I could make a rigorous analysis of their sufficiency) but I do know that a number of knowledgable folks have expressed concern over both the governance and reserves of Fannie Mae and Freddie Mac (Including Alan Greenspan just a few months back).

Whether this is an imminent danger or just a possibility, the marginal (and many fraudulent) mortgages are immediately resold into the secondary market after they are created.

[ExSES]

This sort of scheme only works for the duration of the value bubble then..., the "homeowner" walks away leaving the TAXPAYERS to ultimately "pick up the tab"! You were guessing. Because it hasn't happen before.

I guess you were not "tuned in" to economics during the "S&L Crisis" and subsequent "Bail Out" in the establishment of the Resolution Trust by Congress in 1989???