HERA was passed in 2008 and was supposed to create a process for the government to step in and save Fannie Mae and Freddie Mac if the financial condition of the two publicly owned companies deteriorated to the point that they could fail. In Sep 2008, the two companies were taken over by the government and placed into conservatorship despite being in sound financial condition. They've remained in conservatorship since then even though they both are highly profitable and insure about 60% of current mortgages. The two companies are so important to that the 30-year fixed mortgage would not exist without them. If 30yr fixed goes away, then the housing market, and economy, crashes even worse than in 2008. This is why the GSE's need to be released from conservatorship and recapitalized.
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