First we have this little tidbit.

Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company’s Web site. The changes apply to loans that the company owns or guarantees.

The company, which accounts for more than 40 percent of the $12 trillion in U.S. residential mortgage debt, is seeking to break a “logjam” in refinancing and allow more homeowners to take advantage of near-record low interest rates, according to Brian Faith, a Fannie Mae spokesman. The increased flexibility for consumers isn’t large enough to significantly harm mortgage- bond investors and mortgage insurers, analysts said.

Lower credit scores? Liar loans? Isn't this how we got into trouble in the first place? So they think more poison is our way out of this mess?
Meanwhile, on the other side of the ledger...

The Federal Reserve Bank of New York on Thursday announced it had purchased another $22.3 billion in agency mortgage-backed securities in the week ending Feb. 4, an increase from the $16.8 billion purchased the week before. The new purchases bring the Fed’s total to $91.7, nearly one fifth of its total $500 billion purchasing power.

The Fed took $9.7 billion off Freddie Mac’s (FRE: 0.59 +13.46%) books, $10.5 billion from Fannie Mae (FNM: 0.586 +12.69%) and $2 billion from Ginnie Mae. It purchased securities primarily with 30-year maturities, but invested $950 million in securities with 15-year maturities and $553 million in securities with “other” maturities (20-year, 40-year, etc.)

Oh what a tangled web we weave.