US Economy Fannie, Freddie bailout may hit $363bn


The Fannie Mae and Freddie Mac bailouts could hit $363 billion through 2013, a new US Federal Housing Finance Agency projection indicates.
25october2010-10
According to government projections released on Thursday, the entire bailout of Fannie Mae and Freddie Mac, which has already cost US taxpayers $148 billion, can reach as high as $363 billion if the US falls into a double-dip recession, The Los Angeles Times reported.

The Federal Housing Finance Agency, which has been regulating the two enterprises since they were seized during the financial crisis in 2008, says in the best-case scenario the bailouts of Fannie and Freddie would reach $221 billion.

The current projections point at an estimated $238 billion combined bailout price tag, the agency said.

Edward J. DeMarco, the acting director of the Federal Housing Finance Agency, said, "These projections are intended to give policymakers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac."

The Bush administration placed Fannie and Freddie in government conservatorship following the bailout. Taxpayers now own 79.9 percent of the two financial giants.

During the financial crisis, the US set up a $700 billion relief program to bailout its ailing financial centers.

But the Troubled Asset Relief Program has failed to bring the financial meltdown to an end or even stabilize the US reeling financial system.