Fannie, Freddie May Draw $363 Billion

Fannie Mae and Freddie Mac, the mortgage-finance companies operating under U.S. conservatorship, may need as much as $363 billion in Treasury Department aid through 2013, the Federal Housing Finance Agency said.

FHFA, which oversees the government-sponsored entities, offered the estimate as a worst-case scenario in an analysis modeled on the stress tests conducted on the nation’s biggest banks last year, the regulator said in a report released today. Aid to the two firms, which have drawn $148 billion since they were seized in 2008, could total as little as $221 billion in the event of a “strong near-term recovery,” FHFA said.

“These projections are intended to give policy makers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac,” FHFA Acting Director Edward J. DeMarco said in a statement released with the report. “The results reflect the potential effects of a limited set of hypothetical changes in house prices.”

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Posted by Richard Smith on Oct 21 2010. Filed under Business, Finance. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.