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.