Based on your comments I suspect there is quite a bit more to you than your profile reveals. As a broker what I like about this issue is that it brings to light how mortgages are really owned. Direct lenders are more than happy to perpetuate the misconception that they portfolio loans they originate when infact most of them are sold to Fannie & Freddie. Would you agree with this statement?
The term "conforming loan" refers to loan guidelines that conform to the guidelines Fannie & Freddie will buy. The most well know is the maximum loan amout of $417k. As you correctly point out, neither Fannie or Freddie keep these loans. They bundle them other loans having similar characteristics and sell the on wall street as mortgage backed securites/bonds.
International institutional investors like pension fund managers buy these bonds for and rely on their steady stream of income (your mortgage payment) to make their own payments to pension recipients & insurance annuitiy holders.
While a certain percentage of default is factored into these, exceeding this can endanger the buyers ability to meet their own monthly obligations and therefore they typically expect that the issuer (Fannie & Freddie) will buy back non-performing loans.
The issue of late seems to deal with the way Fannie & Freddie account for this potential liability on their financial statements. Apparently their current practice of not showing this risk on their books may not meed Generaly Acceptible Accounting Principle (GAAP) guidelines. Forcing them to put this back on their books could severely damage their financial position.
Here is a link for more information. http://www.thetruthaboutmortgage.com/fannie-and-freddie-unde