Who are f***y and Freddie?

Question

And why is their problems paying mortgage back going to affect the rest of us?

Answer 1

They are the large mortgage lenders, they are presently in debt.

Answer 2

They are government sponsored enterprises that give or sponsor home mortgage loans.  The stock prices fell from around $64 to $8.  Their financial problems trickle down into other facets of the economy and hurt the housing and financial sector overall.

Answer 3

they are the largest mortgage company in US backing about $5 trillion in mortgage. They are hit bad due to sub prime crisis. If they go bankrupt, then $5 trillion of liability  would have to be sold off to others which some will buy and some wont so the economy gets screwed.

Housing is a major choke point. With foreclosures, fewer new houses are built and less money for builders, carpenters, masons and landscapers and all that goes in a house. Housing supports many industries and if that slows down everything else associated with it does.