Dr Cliff Rossi, financial academic and former senior executive at US government-backed mortgage lenders Fannie Mae Freddie Mac, told The Telegraph: “The Government needs to go in with its eyes wide open about what their risk exposure is over the long term.”

If the government guarantees part of a mortgage, it must charge the bank a fee reflecting the risk of a default, he said.

He recommended the government should then continue to monitor the ability of the borrower to pay the loan back: “It is so easy to say we will set up this process to manage the risk. But the circumstances of borrowers can change quickly.”

Announced in last month’s Budget, the government’s Help to Buy scheme offers to guarantee part of a loan in order to encourage lenders to provide mortgages to borrowers with smaller deposits.

However, the Council of Mortgage Lenders has called for greater clarity from the government on the scope and ambitions of the scheme.

The Federal National Mortgage Association, or Fannie Mae as it is popularly known, was created in the aftermath of the Great Depression in order to keep money flowing through the mortgage markets. The Federal Home Loan Mortgage Corporation – ‘Freddie Mac’ – was created in 1970 with similar objectives.

Earlier this week, Fannie Mae announced profits of $17.2bn (£11.39bn) for 2012, including a record $7.6bn (£5.03bn) in the October-December quarter.

The recovery, however, has been sudden – as recently as 2011 Fannie Mae lost nearly $17bn (£11.26bn) and received almost $26bn (£17.22bn) in aid.