The federal government has put up what a regulator said was a total of about $1 trillion to prop up Fannie Mae and Freddie Mac through capital infusions and purchases of their corporate debt and MBS since the two mortgage giants were placed in conservatorships last September.

The Federal Reserve and the Treasury Department have purchased $843 billion in Fannie and Freddie MBS to lower mortgage rates and support the secondary mortgage market and $105 billion in GSE debt, according to the Federal Housing Finance Agency (FHFA).

Treasury already has provided $85 billion in capital support for the two government sponsored enterprises and has committed to provide another $315 billion if necessary. Each GSE can tap up to $200 billion in capital to maintain a zero net worth. But stress testing shows they "should not breach that $200 billion," FHFA director James Lockhart said during a speech at the National Press Club.

Nevertheless, the GSEs, which own or guarantee $5.4 trillion in mortgages, will continue to report additional losses and increase their loan loss reserves. Fannie has a $42 billion reserve and Freddie a $23 billion reserve. Lockhart doubts all the capital, which is in the form of senior preferred stock, will be paid back to Treasury when the GSEs emerge from conservatorship. "Some of the losses will never be repaid," he said.

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