Stress Test Shows Fannie-Freddie Would Need Bailout in Downturn

Fannie Mae and Freddie Mac could require an additional bailout of as much as $157.3 billion in a deep recession, according to the results of stress tests released by the regulator for the U.S.-owned companies.

The two mortgage-finance giants, which have taken $187.5 billion in taxpayer aid since 2008, would need more funds to stay afloat if home prices plummeted in a severe downturn, the Federal Housing Finance Agency said in a report Thursday. The tests, mandated by the Dodd-Frank Act, use the same assumptions that the Federal Reserve does in gauging the ability of the nation’s largest banks to withstand a recession.