Who are Freddie Mac and Fannie Mae, and why is the federal government bailing them out?

The BBC provides a short description of the federal bailout of these two corporations. Not only is it short, it's easy to understand. I recommend that you read it.

My comment: What's happening now is being described by many news outlets as a "takeover," and it's not. Fannie Mae was actually a federal agency from its founding in 1938 until 1968. And it seems to me that the job of buying mortgages from lenders and selling them to investors--thus keeping the mortgage market stable--is one that should be done by the government and not by private corporations. But it doesn't look as if we're going back to that yet.