WASHINGTON, Oct. 21 (UPI) -- U.S. taxpayers could be left holding the bag for $363 billion in bailouts for Fannie Mae and Freddie Mac if the economy deteriorates, a report reveals.
The Federal Housing Finance Agency says that would be a worst-case scenario through 2013 should the United States slip back into recession, the Los Angeles Times reported Thursday.
The agency, which has had oversight responsibilities since Freddie Mae and Freddie Mac were taken over during the financial crisis in 2008, said under the best-case scenario the bailouts would reach $221 billion. If the housing industry follows current projections, the bailouts would rise to $238 billion.
So far, the two housing loan outfits have received about $148 billion in taxpayer funds.
"These projections are intended to give policymakers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac," Edward J. DeMarco, the agency's acting director, said. "These are not predictions; the results reflect the potential effects of a limited set of hypothetical changes in house prices, a key variable driving credit losses for the enterprises."
The Washington Post reported the Obama administration is proposing an overhaul or replacement of the two home mortgage giants in January. Congress would be involved in any makeover.
Jeffrey Goldstein, Treasury undersecretary for domestic finance, said that while most likely nearly 90 percent of the losses are already logged, "that news should not distract us from the pressing need for reform so that taxpayers aren't put on the hook in the future."
"From the beginning, the Obama administration has made clear that the current structure of the government's role in housing finance, while necessary in the short-term to provide critical support to a still-fragile housing market, is simply not acceptable for the long-term," he said.