Fannie Mae, Freddie Mac Bailout Costs Could Soar
By Tamara Keith
The bailout of mortgage giants Fannie Mae and Freddie Mac has already cost taxpayers $135 billion, but that price tag is expected to grow. On Thursday, the Federal Housing Finance Agency, which regulates the firms, released projections that show the additional bill over the next three years could be $90 billion or much more than that if the economy falls back into recession. Many other financial institutions bailed out at the height of the crisis have already paid the government back. But Fannie and Freddie are still making withdrawals. “There was never any prospect for getting anything back from Fannie and Freddie,” says Karen Shaw Petrou, managing partner at Federal Financial Analytics. “The only question was how much taxpayers were going to lose.” She says one way or another, taxpayers will be paying hundreds of billions of dollars. But if home prices don’t take a huge dive, then the worst of Fannie and Freddie’s losses may already have happened.
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