Fannie, Freddie could hook U.S. taxpayers with $363 billion tab

By NewsCore

October 21, 2010 10:42 AM

U.S. taxpayers could be stuck with a tab more than double its current size for subsidized mortgage giants Fannie Mae and Freddie Mac, a government regulator said Thursday.

If housing prices drop through 2013, the bailed-out lenders will need another $215 billion to stay afloat, for a total bill of $363 billion. Some $148 billion has been spent so far to keep them in the black during the worst recession since the Great Depression.

The fully government-owned agencies own masses of U.S. mortgages that have dropped in value amid the housing crisis.

Even under the rosiest scenario of housing price appreciation, Fannie and Freddie will need another $73 billion of government money, for a total bailout of $221 billion, The Federal Housing Finance Agency (FHFA) said.

In a moderate growth environment, Fannie and Freddie would receive $90 billion more, for a total of $238 billion from the Treasury.

The projections were released after The Wall Street Journal reported the FHFA hired a law firm specializing in litigation as the agency considers how to move forward with efforts to recoup billions of dollars on soured mortgage-backed securities.