On the one hand, federal regulators have openly worried about the litigation risk facing banks as a result of mortgages they sold that have since gone bad. Some analysts have said those lawsuits could cost the banks billions of dollars and undermine the solvency of a few institutions and the economy at large. On the other, the Federal Housing Finance Agency 's (FHFA) suit last week against the largest banks appears to amplify such risks, potentially forcing a bigger payout across the board and heightening economic uncertainty. Most observers blame the conflict on the Obama administration for failing to set clear guidelines. "The administration hasn't really had a coherent idea of how the losses should be allocated," said Alan White, a law professor at Valparaiso University. "Most of the decisions have been made ad hoc." Some said one reason the government's policy is confused is the conservatorship of Fannie Mae and Freddie Mac, which are now effectively being run by the FHFA.