I.E. is a glimpse of Freddie, Fannie's financial woes

History was made Monday when the Federal Reserve said it would lend money to the nation's two mega mortgage holders, Fannie Mae and Freddie Mac, and the Treasury Department also said it would invest in them if needed.

Freddie and Fannie fell prey to the same financial woes hitting real-estate markets across the nation, especially the Inland Empire's market for new homes.

Besides the Inland Empire, the state of California's real-estate market is a prime example of a housing market in the middle of going bust after a huge boom, and also why Freddie and Fannie are in the mess they're in now.

According to real-estate data analysis company Loan Performance/First American CoreLogic, California home prices dropped almost 15 percent in 2007, and several economists believe prices will fall another 15-25 percent in 2008.

In California, more than 78,000 subprime adjustable-rate mortgages worth about $27 billion are scheduled to reset between January 2008 and January 2017. Most will reset between now and December.