Fannie Mae and Freddie Mac’s problems will still cost taxpayer a great deal of money but probably less than originally expected.
The Federal Housing Finance Administration, which regulates Fannie and Freddie, now estimates that taxpayers will have to spend $124 billion through 2014, compared to last year’s estimate of $154 billion. But if the economy performs worse than projected that figure could rise to $193 billion, according to the FHFA.
The agency said it revised the estimates downward because this year’s results were “substantially better than projected.” The reasons for the improvements included a decline in the number of seriously delinquent loans and higher sales of properties owned by banks and credit unions that they couldn’t sell at foreclosure sales.
Bethpage FCU CEO Kirk Kordeleski recently wrote an opinion piece on GSE reform for Credit Union Times.
In September 2008 the government placed Fannie and Freddie into conservatorship. Since then, Fannie has received $104 billion and Freddie has received $52 billion. Fannie has to repay the government about $10 billion annually and Freddie repays approximately $3 billion.