The federal regulator of the two government-sponsored enterprises (GSEs) that played a role in the mortgage crisis said that it would likely take $400 billion to bail out the firms – as initially feared.

Federal Housing Finance Agency (FHFA) acting director Edward J. DeMarco, however, believes that the rescue won’t go beyond that amount. So far, the government has spent $148.2 billion on Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.). The bad loans they purchased by the state-backed firms during the real estate boom are also continuing to fail so the amount is likely to grow.

Speaking before a House Financial Services subcommittee, the DeMarco also said that the agency is still trying to come up with a more specific figure for the bailout. The FHFA is using a stress test similar to what regulators use to evaluate top national banks to determine whether the bailout would indeed go beyond $400 billion.

DeMarco said that to offset some of the expenses, the government plans to seek help from banks that sold the bad loans to Fannie Mar and Freddie Mac. If banks would reject the idea, the agency will take a firmer stand, he said. The official did not mention specific actions the body might take.

Meanwhile, subcommittee chairman Rep. Paul E. Kanjorski (D-Pa.) was more concerned with recovering government expenses. “We must begin to think about approaches for recouping the taxpayers’ money in the long run,” the lawmaker said.

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