Here’s a little tidbit buried in a Washington Post story on Fannie’s recent losses:

To help homeowners caught in the market crisis, Fannie Mae said it would take the unusual step of allowing borrowers whose homes are worth less than their mortgages to refinance up to 120 percent of the property value. That option would be offered to homeowners whose loans are owned by Fannie Mae and who remain up to date on their mortgage payments.

They have just condemned themselves to death.

They will be lending on houses already underwater, and the increase in walkaways as a result will have them needing a government bailout.