Biz Brief: Fixing Fannie and Freddie Could Cost as Much as $1 Trillion
The cost to fix Fannie Mae (FNM) and Freddie Mac (FRE) could run as high as $1 trillion, making it the biggest bailout in U.S. history, Bloomberg News reports. The most modest estimate rings in at around $160 billion.
The mortgage companies, which are now 80% owned by American taxpayers, last year bought or guaranteed three-quarters of all U.S. home loans. Fannie and Freddie have already drawn $145 billion from an unlimited line of government credit used to ensure consumers have access to home loans.That amount surpasses the rescues of American International Group (AIG), General Motors or Citigroup (C), which have begun repaying their debts.