How much bigger could the Fannie Mae money pit get?

When reporting first-quarter results Monday, the government-controlled mortgage-buyer said it is requesting $8.4 billion from the Treasury Department so it can remain solvent. When that is disbursed, total taxpayer infusions into Fannie would reach an eye-watering $84.6 billion.

But new disclosures Monday suggest Fannie's balance sheet could be even weaker than it appears. Here's why: Each quarter, Fannie presents one balance sheet compiled under standard accounting rules and another using estimated market values. Under the market-value approach, Fannie's equity—what is left after subtracting liabilities from assets—was minus-$145 billion at the end of March, far worse than the minus-$98.8 billion at the end of 2009. (Under the standard approach, equity was minus-$8.4 billion March 31.)

Fannie used to calculate the estimated market value of the company's obligation to pay out on its guarantees for defaulting home loans. As a result of an accounting rule change, Fannie now estimates what it would get if it sold the past-due loans in the market. This primarily accounted for a $52.3 billion hit to the market-value balance sheet, Fannie said. Before the accounting change, skeptics had wondered whether the guarantee liability was big enough to cover potential losses. The new accounting approach suggests it wasn't.

The U.S. isn't necessarily on the hook for losses implied by the "market value" deficit. Fannie says the market currently understates the economic value of the nonperforming loans, and it intends to maximize the value of its distressed loans. That may happen over time. But in the meantime, the Treasury and the taxpayer have to wonder how big Fannie's final bill will be.