Freddie Mac and Fannie Mae are the quasi-governmental corporations that support the housing market by securitizing mortgages. Both are highly leveraged with debt equity ratios of around 30:1. Both also benefit from an implicit government guarantee. Although the federal government technically is not obliged to bail them out if they fail, most investors believe that Congress would always bail Fannie Mae and Freddie Mac out. This has let them borrow at highly advantageous rates, which has allowed them to become far more heavily leveraged than a pure private corporation could achieve.
If there really is a housing bubble, both Freddie Mac and Fannie Mae presumably would take a major hit. Is there any alternative to a government bailout if they start down the tubes? I recently found an interesting article by law professor Richard Carnell has lots of good information on the risks we taxpayers are bearing because of Fannie Mae and Freddie Mac's borrowing habit and lousy corporate governance. He also proposes creating a mechanism for dealing with any potential insolvency on their part.
This is an issue that's been flying under everybody's radar screen, but is a key issue given the state of the housing market. Carnell's article is a good introduction to this important problem.