WASHINGTON — Providing additional capital to mortgage buyers Fannie Mae and Freddie Mac could cost the federal government $25 billion over the next two fiscal years, according to analysis by the Congressional Budget Office released today.
But the CBO said if Congress gave the Treasury Department the authority to buy shares of the two government sponsored enterprises "private markets might be sufficiently reassured to provide the GSEs with adequate capital to continue operations without any infusion of funds from the treasury."
The CBO said there is "probably a better than 50%" chance that the Treasury Department won't have to use its authority before it expires in December 2009.
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