Friday, October 22, 2010

Fannie Mae, Freddie Mac bailout cost is likely to rise to $154 billion, agency projects

By Zachary A. Goldfarb
Washington Post Staff Writer
Friday, October 22, 2010; 12:13 AM

The bailout of Fannie Mae and Freddie Mac is likely to cost taxpayers an additional $19 billion and may cost as much as $124 billion more if the economy starts shrinking again, according to a government projection released Thursday. The rescue of the mortgage giants, which has helped keep the housing market alive amid economic crisis and recession, already has a price tag of $135 billion. The money went to cover losses on defaulted home loans.
The ballooning price of the Fannie and Freddie bailout comes as the Obama administration celebrates news of lower costs on other financial rescues. Administration officials are also preparing to release a plan for reforming the two companies in coming months.
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