Stuff liberals run - Fannie and Freddie

Where's Jamie Gorelick and Franklin Raines when you need them?

The taxpayer cost of bailing out mortgage finance giants Fannie Mae and Freddie Mac, already at $148 billion, will likely rise to $280 billion and could balloon to $685 billion, according to Standard & Poor’s:

With a growing portfolio of unsold homes, a sluggish economy, stubbornly high unemployment, the prospect of rising foreclosures, and billions in legacy losses, it appears unlikely in our view that housing and mortgage markets will be able to operate normally without continuing and substantial government involvement.

The ratings agency says the cost could hit $685 billion if the U.S. government sets up and capitalizes a new entity to replace Freddie and Fannie. S&P notes that the U.S. housing market is more dependent than ever on the government-sponsored enterprises, now under receivership. Freddie, Fannie and the Federal Housing Administration now buy more than 90% of all home loans vs. less than half before the housing crash.

Freddie and Fannie’s regulator recently estimated that the Treasury might have to inject up to $363 billion into them, with a net cost of $259 billion.

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