Posted on Tuesday, January 25, 2011
In November, Texas representative Randy Neugebauer sent a letter to the Federal Housing Finance Agency (FHFA) requesting a report from Acting Director Edward DeMarco detailing how much taxpayer dollars are being spent on legal costs for former Fannie and Freddie execs.
A report released last week details just that, and the results are eye opening. Currently the bill sits at a hefty $160 million and counting.
The New York Times reports that $132 million of the money went to defend Fannie Mae in government investigations and securities lawsuits.
In 2006, the office of Federal Housing Enterprise Oversight sued three of Fannie’s former executives, Franklin Raines, Timothy Howard, and Leanne Spencer, for more than $200 million, accusing them of manipulating profits and taking inappropriate bonuses. The executives settled, paying back $31.4 million all-together.
The newspaper reports that since then, taxpayers have spent $24.2 million defending those same executives in court.
Currently taxpayers own about 80 percent of Fannie Mae and Freddie Mac. The two GSEs own or guarantee more than 50 percent of the nation’s residential mortgages.
Adding to this disappointing news is a report from Bloomberg that says the much awaited report on the future of Fannie Mae and Freddie Mac, initially scheduled to be released later this month, will not be released until mid-February.
By: Joy Leopold, DS NEWS