A Republican senator is calling on President Obama to cancel the $12.8 million in bonuses that were approved for 10 executives at the government-seized mortgage giants Fannie Mae and Freddie Mac that received a $170 billion taxpayer-funded bailout. “I am calling on the president of the United States to cancel those bonuses and explain to the American people, the taxpayers who bailed out Freddie and Fannie, why he continues to reward failure,” Sen. John Barrasso, R-Wyo., said at a news conference Tuesday.
The Federal Housing Finance Agency, the government regulator of Fannie Mae and Freddie Mac, approved the bonuses for 10 executives from the two government-sponsored agencies after they met modest performance targets tied to modifying mortgages at risk of foreclosure, Politico reports.
Given that there have been very few modifications, critics can be forgiven for questioning why the generous bonuses were doled out. They come only two years after the agencies received $170 billion in taxpayer aid. The housing finance agency pledged at that time that it would curb executive pay after the humongous compensation offered to former Fannie Mae CEO Franklin Raines and others.
Ed Haldeman, who announced last week that he is quitting as Freddie Mac’s CEO, received a base salary of $900,000 last year — and garnered a $2.3 million bonus. Fannie Mae CEO Michael Williams received a $2.37 million bonus.
The top five executives at Freddie bagged $6.46 million in bonuses last year, and a second installment has yet to be reported to the Securities and Exchange Commission.
Williams and the four other top officials at Fannie snagged $6.33 million in bonuses, primarily for providing “liquidity, stability and affordability” to the national market. That’s not exactly setting the bar high.
“Fannie and Freddie executives are being paid millions to manage losses,” Rep. Patrick McHenry, R-N.C., a longtime critic of the Obama administration’s housing policies, told Politico. “By these same standards, I should be the starting forward for the Lakers. It’s completely absurd.”
And some Democrats are as upset as Republicans. “It is outrageous that senior executives at Fannie and Freddie are receiving multimillion-dollar compensation packages when they now rely on funding from U.S. taxpayers, many of whom face foreclosure or whose homes are underwater,” Rep. Elijah Cummings, D-Md., told Politico.
He has led House Democratic attempts to relax Fannie and Freddie’s rules on restructuring loans or cutting payments for home owners who owe more than their homes are worth.
