Watchdog says taxpayers may lose $27B in bailout

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Associated Press

Posted on January 30, 2013 at 1:01 AM

Updated Wednesday, Jan 30 at 1:02 AM

WASHINGTON (AP) — A government watchdog says U.S. taxpayers stand to lose $27 billion from the 2008 financial bailout, up from an estimate of $22 billion in the fall.

A report by the special inspector general for the Troubled Asset Relief Program says the estimate is higher because of increased losses for the Treasury Department on sales of shares in bailed-out companies.

Ally Financial, the former financial arm for General Motors, still owes $14.6 billion of the $17.2 billion in aid it received. The report says taxpayers can expect to lose $5.5 billion on that investment because of the company's losses on risky mortgages issued ahead of the financial crisis.

The report also criticized the Treasury for lacking a plan to unwind its investment in Ally. Taxpayers own 74 percent of the company.

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