Debt Level: Fannie Mae + Freddie Mac =
Latest Estimated Ultimate Cost to Taxpayers Varies*
Base-Case Estimated Ultimate Source Comments / Assumptions Net Loss** Net accrued loss to be borne by taxpayers, including net cash infusions (with implied default rate of ~5- 10%) and risk premiums associated with federal Congressional government’s implicit guarantee on GSEs’ credit. $389 Billion Budget Office Bulk of the net loss ($291B) occurred prior to and (CBO) during F2009. On a cash basis, CBO’s estimate would have been in line with White House OMB’s estimate. Net cash outlay to be borne by Treasury Dept. (and ; ultimately taxpayers), including Treasury Dept.’s cash ae a outlays to purchase Fannie Mae & Freddie Mac $160 Billion Management and preferred stock (with implied default rate of ~5-10%), Budget (OMB) minus cash received from dividends. Bulk of the net cash outlay ($112B) occurred prior to and during F2009. Note: *Latest estimated cost to taxpayers varies and continues to rise. **By F2019E. Source: CBO, OMB. (@)E) www.kpcb.com USA Inc. | Income Statement Drilldown 159
Debt Level: Scenario Math — What Various Default Rates Could Mean for
Taxpayer Ultimate Cash Cost of Fannie Mae & Freddie Mac
Fannie Mae / Freddie Mac : Ultimate Cash Cost Outstanding Loan Guarantees x Desreni Beeites x Loss Severity" ss to Taxpayer
Outstanding Default Ultimate Cash Cost Loan Guarantees mm] Loss Severity* to Taxpayer $50 Billion $160 Billion 8125 Billion | Billion $5 Trillion’ Current CBO/ OMB Forecasts (before $260 Billion | Billion of Ultimate Cash government Cost of Fannie conservatorship = $375 Billion Mae en ac
9/08)
$500 Billion
$625 Bilin | Billion
Note: * Loss severity is liquidation value (foreclosure auction or other means) as a % of the loan amount adjusted for any K P advances and fees. Source: 1) Fannie Mae, Freddie Mac. (@E) www.kpcb.com USA Inc. | Income Statement Drilldown 160
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