Fannie and Freddie could need $100 billion bailout in next crisis, stress test finds

By Andrea Ariquier | Market Watch

Fannie Mae and Freddie Mac could need a taxpayer bailout of as much as $99.6 billion if a severe economic downturn gripped the U.S., their regulator said Monday.

The Federal Housing Finance Agency released the results of a stress test that examined how the mortgage finance companies would perform in what’s called a “severely adverse scenario.” The stress test was mandated by the post-financial-crisis Dodd-Frank Act and the specifics of the scenario were devised by the Federal Reserve.

The test found that Fannie FNMA, -1.46%   and Freddie FMCC, -0.77%   together would require between $34.8 and $99.6 billion, FHFA said. That’s an improvement from last year, when FHFA said the enterprises would need $125.8 billion.

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