Fannie and Freddie support may reach $363 billion by 2013

By Charles Riley, staff reporter


NEW YORK (CNNMoney.com) -- Mortgage finance giants Fannie Mae and Freddie Mac could need as much as $363 billion in government payments by 2013, regulators said Thursday.

The Treasury Department has pumped $148 billion into the agencies since the government took them over in 2008.

The new projections by the Federal Housing Finance Agency, based on a series of assumptions about home prices, indicate that Fannie and Freddie will require an additional $73 billion to $215 billion before 2013.

But the net loss to taxpayers is expected to be much lower, Treasury said.

For one, Fannie and Freddie will continue to turn around and pay dividends on stock owned by Treasury.

Also, Treasury believes that under the most likely scenario for the housing market, taxpayers will be on the hook for only about $20 billion.

Fannie (FNMA) and Freddie (FMCC) were essentially given a blank check from the government late last year when Treasury lifted a $200 billion funding limit for each.

And now the federal housing agency is offering projections on how much more money the government-backed mortgage companies will need to maintain positive net worth.

"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," said FHFA Acting Director Edward DeMarco in a statement.

Of course, it's the taxpayer that is funding the bailout, and DeMarco says the report is intended to increase public understanding.

"FHFA is releasing these projections to enhance public understanding of Fannie Mae's and Freddie Mac's financial performance," DeMarco said.

The Congressional Budget Office said in a September report that propping up Fannie and Freddie is expected to cost taxpayers $53 billion between 2011 and 2020.

In August, FHFA released its first ever quarterly report on Fannie and Freddie, which revealed the companies have burned through $226 billion in the last three years. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,683.58 -46.53 -0.26%
Nasdaq 4,991.94 -17.27 -0.34%
S&P 500 2,068.76 -8.02 -0.39%
Treasuries 2.28 -0.11 -4.81%
Data as of 12:35am ET
Company Price Change % Change
Bank of America Corp... 16.94 -0.28 -1.63%
Micron Technology In... 18.32 -0.46 -2.45%
Frontier Communicati... 4.92 -0.03 -0.61%
Intel Corp 30.04 -0.14 -0.46%
Apple Inc 126.00 -0.60 -0.47%
Data as of Jul 6
Sponsors

Sections

America's biggest coffee chain is getting more expensive on Tuesday after another round of price changes. More

Greece voted by a big margin against Europe's latest bailout offer on Sunday, bringing the country closer to an economic disaster that could lead to its exit from the eurozone. More

Facebook's Sheryl Sandberg is joining the board at SurveyMonkey, her late husband's online survey and polling company. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

Building a strong credit score at a young age can save a lot of money down the road. Here's how to do it. More