Currently, Fannie and Freddie back more than half of all mortgages nationwide, with loans valued at more than $5.3 trillion, according to a report from the Washington Times. Consequently, the fact that the two home loan giants have lost about $150 billion since being taken over by the federal government – a figure that could balloon to as much as $400 billion – matters little, as eliminating or reducing the companies would cause a disastrous tumble for the housing market.
“It appears unlikely in our view that housing and mortgage markets will be able to operate normally without continuing and substantial government involvement,” Daniel Teclaw, an analyst at Standard and Poor’s Corp., told the newspaper. “That will likely mean further taxpayer support for Freddie Mac and Fannie Mae, which along with the Federal Housing Administration, now buy more than 90 percent of all home loans compared to less than half before the crisis.”
These companies have come into the national spotlight in recent months not only because Republican and Tea Party leaders have mentioned the companies’ losses as being untenable for taxpayers, the report said. In addition, President Barack Obama has said in the past that Fannie and Freddie’s future is a priority for his administration.
Several lawmakers say Fannie and Freddie are expected to make a full return to the private sector within the next few years.