federal savings bank engaged in an ongoing mortgage fraud conspiracy. they routinely falsified and faked mortgage documents, and then deceived the federal national mortgage associationonly known as fannie mae. they took fannie mae's money for loans riddled with lies, all the while promising that the loans contained truthful and verified information. the defendants did this over and over and over again, and between 2005 and 2010, the bank earned millions of dollars servicing and selling fraudulent loans to fannie mae. the defendants conspired to steal money from fannie mae and did in fact steal money from fannie mae. >> historians tell us that abraham lincoln loved riddles, and one of his favorites went like this: "if you call a tail a leg, how many legs does a dog have?" and the answer is four, because calling a tail a leg doesn't make it a leg. calling fannie mae a victim of grand larceny and fraud is like calling a dog's tail a leg. we have no loss. we have no harm. we have no larceny. we have no fraud. (phone ringing) >> hello? >> heather? you're on speaker. >> okay. so how did everything go today? >> it was a very long day. >> we're exhausted. i'm so tired. >> d

fannie mae is the federal national mortgage association. corporation. fanny and freddie were created by congress to buy mortgages from lenders and either hold them or package them together to sell to investors. >> those loans then later get sold into bonds, and they become a commodity in the market. >> these keeps the mortgage market stable and affordable by ensuring that the banks and the mortgage lenders, well, they have access to cash when needed. so then the lenders can come back and loan money again to the prospective homeowner. >> correct. that is the reason for fannie and freddie and, for that case, fha as well. >> and then we have fha. they insure about 30% of residential mortgages. >> fha is a true government loan -- federal housing administration. they were designed many years ago for first-time home buyers. >> after the housing crisis, the fha really tightened up on the guidelines. they increased some of the costs of the mortgages. and over the last several years, they've loosened guidelines back up a little bit. >> they made it p