Fannie, Freddie spree may add to bailout

Freddie Mac Chief Executive Officer Richard Syron stood before investors at New York's Palace Hotel in May last year lauding his company's "cautious" avoidance of the subprime-mortgage crisis.

What Syron, who was ousted last week, didn't say was that Freddie Mac had been gorging on subprime and Alt-A debt.

While it and the larger Fannie Mae bought the safest classes of the mortgage-loan pools, Freddie's purchases totaled $158 billion, or 13 percent, of all the securities created in 2006 and 2007, according to data from its regulator and Inside MBS & ABS, a Bethesda, Maryland-based newsletter used by Federal Reserve researchers. Fannie, which was also seized by the US on Sept 7, bought an additional 5 percent.