It's a sign of the dismal state of the housing market that a combined $14 billion bailout in the third quarter for Fannie Mae and Freddie Mac no longer merits front-page headlines.

Three years after the government put the two agencies on life support, Fannie and Freddie are still reporting billions of dollars of losses every quarter — and regularly asking the Treasury Department for additional aid. The government-sponsored enterprises' regular shortfalls on soured loans, and related bailouts, are barely remarkable anymore.

They may continue for some time. The GSEs still hold massive piles of real estate-owned properties on their books at par, which are expected to force Fannie and Freddie into reporting losses for quarters to come.

Jim Vogel, the head of fixed-income research at First Horizon National Corp.'s FTN Financial Capital Markets Corp., says Fannie has made some progress in getting delinquent homeowners to start making payments on their loans again.

But the question remains whether Fannie will be able to generate enough fee income from newer, current loans to cover its losses on the backlog of older, non-performing mortgages.

"There are continuing streams of progress inside the numbers," says Vogel, citing a decreasing number of underwater loans from 2006 and 2007. Much of the backlog on the GSEs' books comes from those delinquent mortgages worth more than the underlying house.

"You want to get to the point where there's a comfort margin from existing loans, and the new assets coming on are paying for the old," he says.

Fannie on Tuesday afternoon reported a third-quarter loss of $5.1 billion, compared with a year-ago loss of $1.3 billion. The agency said its third-quarter loss was driven by credit expenses related to losses on legacy loans originated before 2009, and losses on risk management derivatives from a decline in swap interest rates.

Its request for $7.8 billion in government aid comes on top of a similar $6 billion bailout request from Freddie Mac, which last week reported a $4.4 billion quarterly loss.

Fannie has now requested $113 billion in government aid since the fourth quarter of 2008, after it was taken into government receivership. The agency says that it has taken a total of $135 billion in credit losses, including reserves, for loans purchased or guaranteed from 2005 to 2008.

Fannie warned on Tuesday that future defaults and charge-offs will continue "over a period of years." Its foreclosures are proceeding at a slow pace and "ultimately the company is dependent on servicers' willingness, efficiency and ability to implement its home retention solutions and foreclosure alternatives," the agency said in a press release.

Analysts are quick to point out that the GSEs do not follow generally accepted account principles. They argue that Washington may not have made much of the third-quarter results because, even though Fannie and Freddie requested billions of dollars each in bailouts, at least the individual requests were not in double-digit territory.

"These are effectively book-keeping numbers," says Vogel.

Chris Whalen, founder and CEO of Institutional Risk Analytics, says banks and bank investors should pay more attention to the size of the real estate-owned losses that Fannie and Freddie will have to recognize next year.

If housing prices fall another 10% next year, as the GSEs and banks unload foreclosed properties, that decrease will have a huge impact on the value of mortgages currently in the held-for-investment portfolios of the major banks.

Conversely, slowing down the foreclosure process has actually aided the GSEs, banks and mortgage insurers from having to book massive losses all at one time, Whalen says.

"What is their REO position and what are the expected losses going to be?" Whalen asks. "When they start realizing the losses, this will become a firestorm in Washington."

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