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Central to the federal government’s creation of the sub-prime mortgage bubble and the subsequent economic collapse and recession, Fannie Mae and Freddie Mac (“government-sponsored enterprises” or GSEs) are now the target of a massive new bailout by the Obama administration of $153 billion and counting, all in the name of winding these agencies down. Here is CNNMoney’s account:

When the dust settles, the federal bailout of Fannie Mae and Freddie Mac will be the most expensive government rescue of the financial crisis—it already stands at $153 billion and counting.

Even as the Obama administration unveiled its plan for reforming the firms, experts agree taxpayer losses are going to continue to climb, no matter what Congress eventually decides to do with them.

The Federal Housing Finance Agency, the government body that oversees the two mortgage giants, has estimated that losses through 2013 will require Treasury to pour another $68 billion to $210 billion into the firms on top of the money already used to prop-up the firms and the housing market.

“Regardless of what they do, even if they were to change their status tomorrow, none of that will change the losses that will be coming due on their existing book of business,” said Guy Cecala, publisher of Inside Mortgage Finance, an industry trade publication.

The two firms have already made many improvements in underwriting standards over the last two years, making most new loans they finance and guarantee more profitable and less risky, Cecala said.

“But that new business only goes so far, because it’s still dwarfed by the loans made five to 10 years ago,” he said.

Cecala thinks the losses may end up coming in a bit below FHFA’s estimates, but other experts believe those estimates may be too conservative.

“The losses depend very much on housing prices, and I don’t see the situation in the housing market getting very much better,” said Peter Wallison, senior fellow at the American Enterprise Institute, a conservative think tank.

“As long as home prices continue to decline or even stay the same, the losses to Fannie and Freddie, and to the taxpayers, will continue to climb.”

Congress essentially approved a blank check in July 2008 to back losses at the two firms, and in September of that year the government stepped in and took them over after finding that losses on the mortgages they bought during the the housing bubble had overwhelmed their net worth.

But while the government has kept the firms alive by pumping money into them since then, there has been no plan on reforming their operations going forward.

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