estimated this would be a $52 billion potential loss for the banks, but the banks are expected to be able to handle the losses, jon. jon: so exactly what did bank of america do? well, bank of america is just the latest bank to take back these bad loans, tens of thousands of them. last week, allied bank, the old gmac, also settled with fannie and freddie, allied and b of a have repaid $3.3 billion to fannie and freddie and they are seeking settlements from other banks as well, jon. jon: peter barnes, live in washington for us, peter, thanks. juliet: jon, the decifit and fears it s spiralling out of control, what the gop-controlled house plans to do and why it could be one of the big battles ahead for party. mother nature not about to give cali a break, winter weather stranding motorists along i-5, now more snow is on the way, we re live with the story, coming up.
report from one of the hardest hit areas of the state. we want to see that. juliet: well, the economy is struggling to get out from under the housing crisis. banks, including fannie mae and freddie mac, could end up taking back some of those bad mortgage loans. why that is not good news for taxpayers. the sea shepherd crew attack japanese cargo ships. thanks to wickileaks we learn the japanese government is going after them. we tell you how, coming up.
mortgage giants fannie mae and freddie mac, which you just mentioned, which are returning bad mortgages they don t want to save taxpayers billions on potential losses. now, these are loans that the banks underwrote back in the housing bubble, when nobody cared if the homeowner did not put money down, did not verify income, did not have a good credit score. remember, housing prices were going to keep going up forever, assuring the loans were going to be repaid, right? well, wrong. a lot of these loans are now in foreclosure, fannie and freddie have the legal right to force a bank to take them back if they did not meet their standards, all of this to limit the taxpayer bailout of fannie and freddie which have gotten $150 billion from the government so far. every penny you can get back on fannie and freddie is good for taxpayers. two years ago, people were questioning whether there would be anything left. and now, we re seeing substantial recoveries. reporter: one government oversight
jon: now a fox news business alert. this one is a good one for a change. there are new signs the economy is picking up steam. construction spenng rose in november, according to the commerce department. it s the third straight month of gains, and the highest level of construction spending in five months. factories also seem to be picking up the pace, manufacturing more goods and taking in more orders in customers. doving right now, banks in a financial hole over bad mortgages issued during the housing bubble, now they re under pressure to take back bad loans from mortgage giants fannie mae and freddie mac. peter barnes is live in the d.c. bureau. how big a problem is this for the banking industry is this peter and are we potentially looking at another bank bailout here? jon, it s a $50 billion problem for the banks, trillions of dollars in mortgages, but it s not expected to sink them or require another government bank bailout. a big part of this involves
official, but that s what many of the reporting has been with regard to dublin. could not pick out what they were saying but the protests on the street of dublin. stocks are up 64 points in trading here on this side of the atlantic. martha: from greece, to france, and now to dublin, as it s sort of creeped across the western world, and we ll see what happens here as we start to crack down on some of these expenditures as well, and in the meantime, an international terror plot at a bargain price. al-qaeda is bragging about the price tag of its cargo plane bomb operation. and the mortgage giants that you know to love, fannie and freddie at the center of the financial meltdown, what republicans now promise to do about freddie mac and fannie mae. is this the right idea? martha: not a minute too