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The cost to taxpayers of bailing out mortgage companies Fannie Mae and Freddie Mac could more than double over the next three years, making it the most expensive of all the recent bailouts.
That comes as no surprise to some critics of the bailouts, who have been arguing that federal assistance to the two mortgage companies is a way of hiding the true cost of the massive TARP bailout to Wall Street banks.
They say that, because Fannie and Freddie have been buying bad mortgages from the banks, the true cost of the bank bailouts is being shifted through a "backdoor bailout" of the mortgage companies.
A report (PDF) from the Federal Housing Finance Agency says the Fannie and Freddie bailout -- which began when the federal government took control of the two companies in September, 2008 -- has already cost taxpayers $135 billion. If the country were to fall into another recession in the coming months, the companies could require another $215 billion in cash.
Under that scenario, the total given to the two companies would be $363 billion. But because Fannie and Freddie are paying dividends back to the government, the total cost to taxpayers would be $259 billion.
‘Backdoor bailout’ of Fannie, Freddie could cost $259 billion: report | Raw Story