- Associated Press - Thursday, October 21, 2010

WASHINGTON (AP) — Rescuing mortgage buyers Fannie Mae and Freddie Mac could cost as taxpayers as much as $363 billion over the next three years, more than double the current amount, a federal regulator said Thursday.

The two companies could end up costing taxpayers $221 billion to $363 billion through 2013, the Federal Housing Finance Agency projected. The amount will depend on whether home prices stabilize or take another dive, the agency said.

The two mortgage finance companies have been operating under federal control for more than two years after nearly collapsing because of the housing bust.

When the government stepped in to take them over in September 2008, the rescue was expected to cost a combined $200 billion. Fannie and Freddie already have received $148 billion from the government.

It’s the first time the agency has released a public estimate of the taxpayer tab. The combined bailout of the two companies is on track to be the largest of the financial crisis.

The terms of Fannie and Freddie’s rescue require them to pay a 10 percent annual dividend to the Treasury Department.

The housing regulator estimated that the two companies will end up paying the government between $80 billion and $104 billion in dividends over the next three years. After subtracting that, the rescue is projected to cost between $142 and $259 billion.

 

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