Fannie Mae and Freddie Mac were considered two of the real villains in the housing bubble that helped precipitate both the meltdown in our financial sector and the Great Recession. The role of those quasi-governmental entities was to buy up mortgages in great numbers, thus encouraging lenders to offer riskier and riskier loans.
The two institutions eventually required government aid totaling $187.5 billion to backstop all the bad loans they had acquired, and were officially taken over by the U.S. government in 2008. But now, White House analysts are reporting, Fannie and Freddie could return $179 billion in profits to U.S. taxpayers over the next ten years. The two have already refunded more than $200 billion to the U.S. Treasury.
It's nice that we won't lose any money directly on Fannie and Freddie, but it hardly makes up for the hardship caused by the recession. The total costs of that have been estimated at $6 trillion to $14 trillion.
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