WASHINGTON — While Treasury Department officials try to play down the impact on taxpayers, outsiders are claiming that the seizure of Fannie Mae and Freddie Mac could be quite costly.

"The key part that poses the risk of losses is this lack of an exit strategy," said Joseph Mason, a professor at Louisiana State University. "Part of the equation is, how long is this money going to be tied up? Maybe we get it all back but we get it all back 30 years from now."

Lawrence White, a professor at New York University's Stern School of Business, agreed.

"It seems likely to me that the Treasury is going to have to absorb losses," he said. "The government is going to get back less than what it put in."

Exactly how much the government will end up putting in depends largely on the housing market.

"This whole issue centers on what's going on in the residential mortgage market," said Gil Schwartz, a former Fed lawyer who now works in private practice. "If the residential real estate market doesn't recover in the next six to nine months and, therefore, additional writeoffs are going to be required, then there will be potentially significant problems."

About the only number thrown out so far is $100 billion — a figure Prof. White embraces. The Congressional Budget Office said in July that using the powers the Treasury needed to seize the GSEs Sept. 7 would cost at least $25 billion. It said then that there was a 5% chance costs could total $100 billion.

At issue are three plans Treasury Secretary Henry Paulson announced Sept. 7 to shore up the government-sponsored enterprises in conservatorship. The plans call on the Treasury to create a lending facility, invest as much as $100 billion of equity in Fannie and Freddie, and buy mortgage-backed securities guaranteed by the GSEs.

Many observers are trying to answer whether — and when — the government might get a return on such investments.

Some said the situation may be less dire in the long term. "If they can get the business model back on good footing and with tighter underwriting guidelines, I think they can start generating income again," said Chris Thompson, a senior executive at Accenture Ltd. "But it's probably going to be a mess for them in the short term."

When it announced the takeover, the Treasury outlined steps taken to protect taxpayers from facing a loss. First, the GSEs will pay the Treasury dividends of 10% a year on whatever equity the government injects. The Treasury also will begin earning quarterly fees in 2010 for continuing to support the GSEs. The fees have not been determined but would be set by the head of the Federal Housing Finance Agency, Treasury, and the Federal Reserve.

And finally, the government holds warrants for an ownership stake of 79.9% in each company at an exercise price of less than $1. The warrants expire in 20 years. If the companies' shares eventually rebound, the government stands to reap big gains.

"Since this difficult period for the GSEs began, I have clearly stated three critical objectives: providing stability to financial markets, supporting the availability of mortgage finance, and protecting taxpayers — both by minimizing the near-term costs to the taxpayer and by setting policymakers on a course to resolve the systemic risk created by the inherent conflict in the GSE structure," Mr. Paulson said Sunday.

Whether GSE shares will rebound is anyone's guess. Analysts said it is unlikely in the short term and may be a long time before they appear like a good investment.

"Some investors will be leery about going back because you're going to be nervous that the government would come in and wipe out equity again," said Brian Gardner, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc.

Alex Pollock, a fellow at the American Enterprise Institute and a former chief executive of the Federal Home Loan Bank of Chicago, said Mr. Paulson's strategy is sound. But he added that the Treasury's plan to start buying agency mortgage-backed securities this month poses big questions.

"If you issue government debt to buy MBS, which is what you have to do, you're going to have 100% leverage," he said. "Anytime you're running a 100% leverage book of mortgages, leaving aside credit losses and just thinking about interest rate risk and prepayment risk, you could see losses."

Others worry that the government may never fully recoup its equity investment.

Mr. Schwartz noted that the government will be owed not just the $100 billion it may invest in each GSE but also interest.

"It's very, very difficult to estimate the likelihood the government will get back its full carrying cost," he said. "You can't just say everything will be fine. This is not the Tinker Bell approach to running the economy."

In a press release Thursday, the Treasury said it "deliberately chose a large number to give confidence to the markets."

Freddie's accounting methods also could create headaches for the government, said Accenture's Mr. Thompson. The GSE turned its losses into deferred tax credits, which made it appear that its capital cushion was thicker than it really was. "The consensus is, those are real losses," which will have to be assumed, Mr. Thompson said. "That's probably not going to be able to be worked out quickly. It could take three years."

The issue of taxpayer risk has been front and center since the Fed facilitated the rescue of Bear Stearns in March with a $29 billion loan to JPMorgan Chase & Co. and opened its discount window to investment banks.

Though some worried it could lead to losses, so far the Fed's actions do not appear to have created a problem. Investment banks have shunned the discount window, and assets it took from Bear were valued at $29.3 billion as of Wednesday.

In order to minimize losses from the GSE takeover, agreement is widespread that policymakers must take a broader approach to the economy and the financial system, possibly through another stimulus package or infrastructure improvements.

Potential losses are likely to be a major theme in congressional hearings that are to begin next week. But Rep. Jeb Hensarling, R-Tex., a member of the House Financial Services Committee, said the takeover is problematic even if the government ends up making money.

"Regardless of whether [taxpayers] make or lose money, they are being called upon to take that huge risk that politicians on Capitol Hill said for decades they would never have to take," he said in an interview Wednesday. "If the underlying assets are so great, I'm curious why the taxpayer is having to be called in the first place."

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