Folks, this is a very interesting situation to watch.  Fannie Mae, FNMA is a congressionally chartered corporation which buys mortgages on the secondary market, pools them and sells them as mortgage-backed securities to investors on the open market.  Currently they have limits on the size of their portfolio.  At Fannie Mae's request they basically want to buy more mortgages.  This could help out tremendously because right now the secondary market does not want to buy anything!  If the government approves this, we could see light at the end of the tunnel.  In addition, another corporation Freddie Mac could follow suit and offer more help.  If the government denies this request, I think that would be a clear statement they they do not intend to help stabalize of this housing crises and could spell bad news for a lot of people.

Easing Fannie Rules Might Not Help Market, Critics Caution
Baltimore Sun (08/08/07)
It remains to be seen whether the Office of Federal Housing Enterprise Oversight will grant Fannie Mae's request that its portfolio limits be eased so that it can purchase more home loans as a means of helping to heal the weak mortgage market. Senate Banking Committee Chairman Christopher Dodd, D-Conn., approves of the move as long as safety and soundness are taken into consideration; and Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee, believes it would permit the government-sponsored enterprises to act as "market stabilizers." However, Alexandria, Va.-based consultant and GSE critic Bert Ely does not believe that lifting Fannie Mae and Freddie Mac's portfolio caps will play a major role because they historically have not purchased or guaranteed subprime mortgages and have recently strengthened their guidelines for doing so. According to Ely, Fannie Mae and Freddie Mac do not have to beef up their mortgage portfolios to make a difference, as they need only purchase additional mortgages and infuse the market with cash by packaging and selling them as securities.