I will attempt a rebuttal, but I do agree with what you have said, but here goes.
"Fannie and Freddie may finance most of the home loans in America, but most of the home loans in America aren’t the problem; the problem is that very substantial slice of home loans that went outside the Fannie and Freddie box. It is right to focus on the fact that it was the regulatory and charter constraints of the GSEs that kept that box closed. In the schizoid reality of the GSEs, when they had their “shareholder-owned private company” hats on they did plenty of envelope-pushing. When they had their “affordable housing” hats on, they rationalized dubious theories of credit quality–like the fervent belief that low or no down payment can be fully offset by a pretty FICO score–to beef up their affordable housing goals, often at the expense not of the poor put-upon “private sector” but of FHA, whose traditional borrower pool they pretty thoroughly cherry-picked. Nonetheless, the immovable objects of the conforming loan limits and the charter limitation of taking only loans with a maximum LTV of 80% unless a well-capitalized mortgage insurer took the first loss position, plus all their other regulatory strictures, managed fairly well against the irresistible force of “innovation.” If there has ever been an argument for serious regulation of the mortgage markets, the GSEs are it." (Krugman)
Fannie and Freddie did not give out these loans, they simply bought them from other banks who gave them out. Those banks looked at Fannie and Freddie and the government secured entity that would cover them should these loans start to have problems.
A substantial portion of Fannie’s and Freddie’s credit losses comes from Alt-A mortgages that the agencies imprudently bought or guaranteed in recent years to boost their market share. These are mortgages for which little or no attempt was made to verify the borrowers’ income or net worth. The principal balances were much higher than those of mortgages typically made to low-income borrowers. In short, Alt-A mortgages were a hallmark of real-estate speculation in the ex-urbs of Las Vegas or Los Angeles, not predatory lending to low-income folks in the inner cities.
It was this sub-prime securitization that put off the inevitable collapse of the housing market to begin with. The percent of sub-prime loans in the market (that Fannie/Freddie where buying up to increase market share, and were regulated out of getting into other markets) spiked in 2003 and then doubled to its current spot. Blaming a Clinton policy in 1995 for this seems a bit off base.
I think the idea was that it enabled all of these companies to combine and sell all these bad loans to Fannie/Freddie, which only makes the problem that much worse.
Agreed, so what does some republicans in congress trying to reform Fannie and Freddie, who neither borrowed nor lent, have to do with this crisis?
Or they will bundle all their bad debt together and sell it to government backed companies, that then tanks the entire sector.
I would say that was more a government action than a Fannie/Freddie action.
So, that was my attempt at a liberal rebuttal, hope the debate can continue, or better yet, an actual liberal can come take over my side here. 
