There’s a big difference between Fannie and Freddie “buying” mortgages and “insuring” them.
They still need to “buy” the mortgages, which means they still need to have capital or credit to do so. Back to the same problem everyone else has. Just because caps were lifted doesn’t mean money will now be thrown at them to buy up all those “iffy” mortgages for “iffy” people.
So with limited capital, they will need to stick to insuring mortgages instead of buying them outright – to make the limited capital go farther. Now, to insure mortgages, they have to asses risk – which means insuring the better loans under stricter standards.
