Taxpayers Taking a Hit in Struggles of Fannie Mae, Freddie Mac, and It Could Get Worse

Jim Angle

When you see a foreclosure sign, chances are good that you, as a taxpayer, are on the hook for the costs involved because Congress has its very own money pit — federal guarantees of mortgages gone bad. And the official estimates for the damage put it at more than $300 billion.

“It’s probably likely to be closer to $500 billion by the time all of this is finished,” David Johns of the Heritage Foundation said. “And you and I get to pay that.”

Peter Wallison of the American Enterprise Institute warns that “the taxpayers ought to get ready to suffer some very substantial losses because of Fannie and Freddie.”

That would be Fannie Mae and Freddie Mac, which are now in conservatorship, meaning they are under the complete control of the federal government.

One reason the costs to the taxpayer are so high is that they control the lion’s share of the mortgage market.

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