Fannie Mae and Freddie Mac could cost taxpayers another $19 billion over the next three years, the bailed-out mortgage titans’ regulator said Thursday, but the total tab could nearly double if the U.S. economy slides back into a recession.
The projections by the Federal Housing Finance Agency were based on the results of “stress tests” it ran on Fannie and Freddie, whose woes have already cost taxpayers a combined $135 billion.
“Today’s projections show that, in the most likely economic scenario, nearly 90% of the losses at Fannie Mae and Freddie Mac are already behind us,” said Jeffrey Goldstein, under-secretary for domestic finance at the Treasury Department.
The bulk of the firms’ losses have stemmed from soured mortgages that the firms bought or guaranteed between 2005 and 2008. The companies have sharply tightened underwriting standards, and loans made over the past two years aren’t expected to lose money.