The director of the Federal Housing Finance Agency predicted the Treasury Department will have to make billions of dollars in additional capital injections into Fannie Mae (FNM) and Freddie Mac (FRE) in the next 12 months -- and that taxpayers will lose some of their investment in the companies.

“There will certainly be significantly more [Treasury investment] in the future” because of continuing problems in the housing market, James Lockhart said in an interview with FOX Business.

The FHFA is the conservator of the two mortgage giants, which the government took over last fall at the height of the housing and financial crisis. Treasury committed $400 billion to assisting Fannie and Freddie -- up to $200 billion for each company -- and so far has invested $85 billion in them in total.

Last year, Fannie reported a loss of $59 billion and Freddie lost $50 billion because of the collapse of the housing bubble and the recession, which sent mortgage delinquencies and foreclosures soaring.   

Lockhart said his agency has conducted "stress tests" on the companies like those completed by financial regulators earlier this year for large financial firms. The tests evaluated how the companies would fare under an “adverse” economic scenario of much higher unemployment and much lower housing prices.

“We do not get into that adverse scenario -- to the $200 billion” allotted for each company, he said. “The cap is there and is designed not to be hit.”

Together, Fannie and Freddie own -- or insure against default -- $5.4 trillion in residential mortgages, about half of all U.S. mortgages. Analysts consider their role in the mortgage financing market vital to generating new financing for mortgages, especially in the current financial crunch. Loans insured by Fannie and Freddie can be sold by lenders to private investors in packages of mortgage-backed securities. The cash that lenders collect from the sales can be recycled to make new loans.

Lenders need Fannie and Freddie now more than ever. The private market for mortgage securitizations -- MBS created and sold by Wall Street firms -- soared during the housing bubble, but shut down in the financial crisis. That’s left Fannie, Freddie and two other government agencies that guarantee mortgages, the Federal Housing Administration and the Department of Veterans Affairs, with 95% of the mortgage financing market today. 

“What's fascinating about the crisis is that things would be far worse without Fannie and Freddie,” said Jaret Seiberg, financial services policy analyst for Washington Research Group, a unit of Concept Capital. 

He also predicted that while the companies will be restructured by Congress soon and will return to profitability within the next three years, “some of the losses will never be repaid" to Treasury.  But he said the amount of the losses will depend on the future direction of the housing market and the expected housing recovery.

“My view is we're starting to bounce along the bottom and that will certainly help the market,” Lockhart said. “Hopefully, with low mortgage rates and lower house prices and some stabilization, we may see some of those people that are on the sidelines start to buy, and that would really help this market.”

As part of its financial-regulation reform plan, the Obama Administration is considering what to do with Fannie and Freddie. The leading options are to turn them into government agencies; totally privatize them, with a new public offering of stock; or turn them into “public utilities,” with dividends and rates of return for investors set by the government, which would continue to back the companies. The Administration will announce its plan for Fannie and Freddie early next year.

“This crisis has shown how important it is to have two entities that are devoted to insuring there's liquidity in the housing market,” Seiberg said. “But it's clear they can't survive in their prior structure, and we believe they're going to emerge as much more tightly regulated companies that more resemble public utilities than the big financial firms they used to be.”