Standard & Poor's estimated that it could cost as much as $685 billion to rescue and reform Fannie Mae and Freddie Mac. The government has already paid almost $134 billion to prop up the mortgage giants, and analysts at S&P said the firms might need $280 billion more as the housing market falters. Additionally, replacing Fannie and Freddie would require startup cash. "As it stands now, we believe that addressing the [companies'] problems is likely to be an expensive repair job for U.S. taxpayers," S&P analysts wrote.

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