CBO slashes cost of Fannie & Freddie over Next Decade

By Sari R. Updated on 9/25/2013

Since 2008 the private corporations known as Freddie Mac and Fannie Mae have received 183 billion dollars in bailouts from the Department of Treasury.  Beginning in 2012 these home loan mortgage corporations are projected to decline in subsidy costs from 2 to 3 billion dollars annually.  This decline is the result of an increase of 10 basis points in guarantee fees charged to lenders through 2021.

According to the Congressional Budget Office the new guarantee fees will lower future subsidy costs especially with the anticipated stabilization of the housing market.

How does this affect borrowers?  Starting in April 2012, homeowners could pay more for mortgages by these government sponsored enterprises and see a 2% fee increase on home loans.  Taxpayers should also expect a reduction in expense from 62 billion to 27 billion dollars.