Fannie Mae and Freddie Mac might face billions of dollars in losses because of a meltdown in the foreclosure process. The government-owned mortgage giants have said they will penalize lenders if they do not quickly resolve issues with their processes. "The country's housing-finance system remains fragile, and we're trying to work through this subject in a way that's fair not to just to delinquent householders but also servicers and mortgage investors and most of all is in the best interests of taxpayers and the housing market," said Ed DeMarco, interim director of the Federal Housing Finance Agency.

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