Business News
Fannie, Freddie bailouts could reach 363 billion dollars
Oct 21, 2010, 18:46 GMT
Washington - The US government-backed mortgage companies Fannie Mae and Freddie Mac could end up costing taxpayers 363 billion dollars, a government regulator said Thursday.
'These are not predictions; the results reflect the potential effects of a limited set of hypothetical changes in house prices, a key variable driving credit losses for the enterprises,' Federal Housing Finance Agency (FHFA) acting director Edward DeMarco said in a statement.
The projection was based on stress tests run by the FHFA. In the best case, the final bill could reach 221 billion dollars. In the worst case, if house prices drop, the total would be 363 billion dollars, the agency said.
Fannie and Freddie, which own or back about half of all US mortgages, have already received 148 billion dollars in the ongoing bailout from the Treasury Department in exchange for shares in the companies.
The US government took over Fannie Mae and Freddie Mac in September 2008 as the US financial crisis loomed.
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