WASHINGTON – Results of financial "stress tests" show that mortgage giants Fannie Mae and Freddie Mac, rescued by taxpayers in the 2008 crisis, would need as much as $157.3 billion in additional aid in a severe U.S. and global recession.
The agency that oversees Fannie and Freddie, the Federal Housing Finance Agency, announced the results of the second annual stress tests. Fannie and Freddie are required to conduct the tests under the 2010 law that overhauled financial regulation following the crisis.
The government spent $187 billion to rescue the companies after they incurred massive losses on risky mortgages. They have become profitable again as the housing market has recovered.
The FHFA's new report said the companies would need between $68.6 billion and $157.3 billion in additional aid under a severe economic scenario.