Administration optimistic on Fannie, Freddie costs

The Obama administration expects its losses in troubled mortgage giants Fannie Mae and Freddie Mac to ultimately be cut nearly in half, according to the president's fiscal 2012 budget.

Since taking over the ailing government-sponsored enterprises (GSEs) in September 2008, the federal government has pumped $131 billion into them, according to Monday's budget release.

However, the Treasury Department estimates that after receiving dividends from the GSEs for that assistance, the total losses could shrink to $73 billion by 2021 -- a 45 percent decrease from current levels.

In the budget, the president proposes gradually reducing the investment portfolios by at least 10 percent a year. The size and amount of loans guaranteed by Fannie and Freddie would also be limited under the budget, with the goal being to get the GSEs out of conservatorship.

The budget comes three days after the administration unveiled its plan for the nation's housing finance system. That report offered three options forward, but all included the ultimate winding down of Fannie and Freddie, a significant increase in the amount of the housing market supported by the private sector.

Meanwhile, House Republicans have also identified GSE reform as a top priority in the new Congress, vowing to quickly free taxpayers of the burden of Fannie and Freddie.

This post updated at 1:25 pm.