Were you hoping to get a house in the next decade? You might be out of luck. America’s home mortgage industry is in dire shape.

Fannie Mae and Freddie Mac, the two largest home mortgage companies in the country, could soon go belly up like big fish in a tiny pond. Only in this case, the fish are more like whales, and the pond is a near-empty kiddie pool.

For students and others who are approaching home buying age, the current confusion of the mortgage industry is scary. Fannie Mae and Freddie Mac’s loans comprise nearly half of the $12 trillion U.S. mortgage market.

It’s likely that the house you grew up in was purchased with funds that were guaranteed by either Freddie or Fannie’s deep pockets. In fact, since these two powerhouses facilitate most of the lending that goes on in the United States, the value of the loans they bundle, underwrite and sell to Wall Street investors directly impacts mortgage rates.

The free fall toward an all-out mortgage collapse was brought to us courtesy of folks who had no business borrowing money. Banks and mortgage companies spent the past 10 years doling out cash to anyone with a mild pulse, refining the art of subprime lending.

This jolly giving was based on the assumption that when homes were bought, the value would continue to rise, and everyone would win big. Even if the questionable owners stopped making payments, the loan would get paid off with a refinance or a sale.

When the tsunami of loan defaults inevitably came and the housing market cooled, the value of the mortgages plummeted.

Bear Stearns, a huge Wall Street investment firm, just learned the hard way that non-prime lending is no way to make a buck. They bought the securities representing millions of dollars worth of subprime loans.

In an investment scam worthy of a Hollywood script, they rated these securities as great investments to their customers, all the while knowing that they weren’t very secure. When borrowers began defaulting on their loans, Bear Stearns executives began packing golden parachutes, shredding documents and fleeing their offices, knowing they had just screwed over thousands of investors.

Someone please make a movie out of this.

To date, 266 mortgage lending institutions have failed, including most recently IndyMac Bank, which, with the help of 110 federal agents, was recently taken over by the FDIC. It’s the second largest failure of a bank in U.S. history.

Unfortunately for us, Fannie Mae and Freddie Mac, traditionally viewed as pillars of financial security, are on the ropes getting clobbered without a bell to save them. As foreclosures that were brought on by the subprime debacle continue to rise, investor confidence in these government-backed companies has dissipated. In the housing market downturn, they’re posting billions in quarterly losses, creating a tangible fear for many experts that these giants could topple.

This has implications for students, even though we don’t own houses yet.

If Fannie and Freddie were to go under, there’d be no facilitators for mortgage guidelines in housing. Interest rates would skyrocket, and lenders would sit on their money.

A few years ago, it didn’t matter if you were unemployed, broke, had terrible credit, couldn’t make payments or spent your entire payday loan on Wild Turkey Bourbon. If you looked hard enough, in the right cedar-paneled office, you could find a no-money-down loan and get yourself into some real estate.

But now that many sketchy mortgage products have tanked along with the companies that offered them, the new standards for lending have been galvanized against shoddy practices.

It’s inconceivable. When I get ready to buy a home, I’m actually going to have to put money down, whereas five years ago, someone else’s money would’ve worked. Even worse, I’m going to need a trustworthy credit rating, a steady source of income and a history of making payments, which is pretty lame considering how much fun it was to overdraft my account and rack up credit.

These new expectations for borrowers make it more difficult for first-time buyers to get into homes.

Right now, the best thing we can do is make good financial decisions. Don’t get yourself in financial trouble by spending yourself silly — your future home-buying self and your future lender will thank you for it.