Taxpayers May Owe $400 Billion for Bailout of Fannie and Freddie

So far $148 billion have been paid by the taxpayers to bail out Fannie and Freddie for single family mortgages gone bad, and as much as $400 billion more could still be needed. That's according to testimony by Edward DeMarco, acting director of the Federal Housing Finance Agency (FHFA), which is the conservator for Fannie Mae and Freddie Mac. DeMarco gave this somber news in an update on Fannie and Freddie to the House Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises this week.

That $400-billion figure is a worst-case scenario, but with some analysts predicting weaker house prices, now that the tax credit has expired, the worst could become reality.