I know some of this material was included in prior posts. However, can you provide a quick summary of:
Asset $
Liability $
Net Worth $
An essentially plain vanilla business that buys retail mortgages, keeps some and repackages some, is not likely to be at risk for more than 5-10% of assets under the worst of scenarios. If capital is less than 5%-10%, the shortfall only is at risk. That might amount to multi billions, cetainly not multi- trillion.
Also, "too big to fail" usually means "too big AND too well connected to fail" That probably does apply to Fannie because of its GSE nature. Other big entities, however,(e.g. Knickerbocker Trust (1907), Drexel Burnham (1990), Bank of the United States (1932)) are allowed to fail. Some are even pushed.
Sorry, I have provided this stuff in previous posts. Just keyword search Fannie.
I'm too busy making the world safe for technocracy.