CBO The Budgetary Cost of Fannie Mae and Freddie Mac and Options for the Future Federal Role in the Secondary Mortgage Market FULL TEXT in PDF FORMAT

Congressional Budget Office The Budgetary Cost of Fannie Mae and Freddie Mac and Options for the Future Federal Role in the Secondary Mortgage Market FULL TEXT in PDF FORMAT CBO The Budgetary Cost of Fannie Mae and Freddie Mac and Options for the Future Federal Role in the Secondary Mortgage Market FULL TEXT in PDF FORMAT

Congressional Budget Office Testimony CONGRESSIONAL BUDGET OFFICE SECOND AND D STREETS, S.W. WASHINGTON, D.C. 20515

Statement of Deborah Lucas Assistant Director for Financial Analysis The Budgetary Cost of Fannie Mae and Freddie Mac and Options for the Future Federal Role in the Secondary Mortgage Market before the Committee on the Budget. U.S. House of Representatives June 2, 2011

This document is embargoed until it is delivered at 10:00 a.m. (EDT) on Thursday, June 2, 2011. The contents may not be published, transmitted, or otherwise communicated by any print, broadcast, or electronic media before that time.

As of March 31, 2011, the GSEs reported a fair-value deficit of approximately $187 billion. Adding to that the $130 billion in net payments already received from the Treasury implies a fairvalue cost to the government of about $317 billion in obligations incurred through March 2011. The increase in that total compared with CBO’s 2009 estimate reflects continued deterioration in the condition of the housing market that is increasing default rates on distressed mortgages and depressing the amounts that can be recovered following defaults; there are also differences between CBO’s estimating assumptions and those of the GSEs.

TEXT IMAGE and PDF CREDIT: Congressional Budget Office