Will taxpayers be on the hook for subprime crisis?

“It's going to take a long time for volumes to come back”

With a nationwide housing crisis far from over, the risk of future mortgage losses is rapidly shifting from the private sector toward government - and potentially US taxpayers.

This is occurring partly by choice, as policymakers try to stop a wave of foreclosures.

It is also happening by circumstance, as the crisis has left government-linked entities as the lenders of last resort in a troubled marketplace.

One symbol of rising risks came on Tuesday, as mortgage giant Fannie Mae announced a $2.2 billion loss for the year's first quarter. The Federal National Mortgage Association, the official name that has been shortened to Fannie Mae for convenience, is not officially part of the government. Read more