If the mortgages weren't worth ripping away from the GSEs would they have bothered to go after it? When ever someone goes after 12 trillion, you have to remember what is involved. It's a power play, it's big time maneuvering utilizing big time politics. First they hedged them in and stole the new business only t get burned on the back end of the bubble. But they were big enough to bite that bullet and keep going for the real gold; the mortgages that FANNIE is holding and can no longer protect. Do you see FANNIE MAE trying to sell their paper? Nope. But you sure can see Goldman Sachs drooling over it. So the very next day after FANNIE MAE announces that they are plenty liquid and have no problems the headlines are filled with news of the impending takeover... because FANNIE MAE would otherwise collapse?