Reply #30: Fannie Mae, Freddie Mac bailout cost is likely to rise to $154 billion, agency projects [View All]

[Demeter]

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/21/AR2010102101941.html

...Federal Financial Analytics, a Washington research firm, said the FHFA projection gave a good indication of what Fannie and Freddie may ultimately cost taxpayers, but "nowhere near a definitive picture of it."

The firm noted that the analysis was based on housing prices and ignored the potential costs associated with a massive breakdown in the foreclosure process that has recently come to light.

"It's simply impossible to forecast reliably now how much foreclosuregate will cost" Fannie and Freddie, the firm said in a memo to clients Thursday.

Repayment unlikely

In any event, it is becoming increasingly clear that the rescue of Fannie and Freddie will be the most expensive part of the government's response to the financial crisis. While many banks and even American International Group have repaid or are working to reimburse the government, the likelihood of Fannie and Freddie doing so is slim, their regulator said...