Mortgage finance giants Fannie and Freddie have asked taxpayers to pick up $160 million in legal fees owed during civil lawsuits, the New York Times reports.
The bulk of the money — $132 million — went to defend Fannie Mae in securities suits and government probes into accounting irregularities allegedly occurring before the subprime meltdown sparked the housing crisis.
The total bill could rise, the newspaper reports.
Randy Neugebauer, a Texas Republican and chairman of the oversight subcommittee of the House Financial Services Committee, has been looking into the Fannie and Freddie matter, requesting data from the Federal Housing Finance Agency, the regulator in charge of overseeing the two companies.
“One of the things I feel very strongly about is we need to be doing everything we can to minimize any further exposure to the taxpayers associated with these companies,” says Neugebauer.
The government took over both companies in late 2008, and their losses stemming from bad loans have hit $150 billion.
The housing market is still reeling from the mortgage meltdown, but could recover if unemployment rates fall in 2011, says David Crowe, chief economist for the National Association of Home Builders.
"Home sales are going to struggle, but they will follow employment," says Crowe, according to the Associated Press.
"That's clearly the trigger: A better employment market giving people the comfort that they can go forward with a major purchase like a home."
© 2023 Newsmax Finance. All rights reserved.