About Fannie Mae And Freddie Mac – AGAIN *Open Thread*

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I wrote the following post back on May 10, 2010. I will explain why I am reprising it more than five years later below:

Tell Me Again Why Freddie Mac

And Fannie Mae are not included in the big Financial Reform Bill? I am just curious since they helped create this economic situation in which we find ourselves, and have drained billions of dollars from the coffers over the past couple of years. Now they want MORE.

Oh, yeah – Freddie Mac is asking for TEN Billion Dollars. I reckon they just want to add it to their tab: ABC News’ Matthew Jaffe reports:

Government-backed mortgage giant Freddie Mac today asked for $10.6 billion in additional federal aid after reporting a loss of $8 billion in the first three months of this year.

To date Freddie Mac has been provided with around $51 billion in government funds. The new aid would bring the total assistance to the lender to over $61 billion.

Late last year the Treasury Department essentially agreed to provide a blank check to Freddie Mac and fellow government-backed lender Fannie Mae when the agency controversially removed the cap on federal support for the lenders.

A “blank check”? That is what Geithner wants to give Freddie and Fannie? I reckon that’s what happens when you have someone in charge who can’t even fill out his own tax forms properly (or, as I like to say, a Tax cheat). Some folks aren’t happy about it, though:

Republicans have blasted the administration for that move, as well as for not putting forth a plan to overhaul the government-sponsored enterprises. Thus far the administration’s only action has been the April 14 release of a series of questions for public comment on what to do with the mortgage giants.

In addition, Treasury Secretary Tim Geithner has acknowledged that the government expects to suffer “very substantial losses” on its investments in the lenders, with recent estimates ranging around a minimum of $85 billion.

Well, that’s just jake – “a minimum of $85 billion.” That’s our money, folks.

And let’s not leave Fannie Mae out of this mix. Oh, no – now Fannie is asking for some more cash, too, a cool for $8.4 Billion more?:

Fannie Mae requested another $8.4 billion from the federal government on Monday, saying that it expects its deficits to continue due to trends in the housing and financial markets.

The government-controlled mortgage giant said it lost $13.1 billion applicable to common shareholders in the first quarter of 2010. In the year-earlier quarter, Fannie suffered a $23.2 billion loss, but an accounting change makes comparing the year-over-year losses difficult.

Fannie’s request for more federal funds comes just four days after Fannie’s twin Freddie Mac also asked for a handout – to the tune of $10.6 billion – after posting an $8 billion quarterly loss.

In using Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500) to prop up the mortgage market, the government in December lifted a $200 billion limit on their bailouts, essentially giving the twin housing lenders a blank check. Fannie Mae has already received $76.2 billion from the federal government and Freddie has gotten $50.7 billion.

“In the first quarter, we continued to serve as a leading source of liquidity to the mortgage market, and we made solid progress in our ongoing efforts to keep people in their homes,” Fannie Mae President and CEO Mike Williams, said in a press release.

Just to recap, Fannie Mae and Freddie Mac were largely responsible for bringing down the housing market (click HERE to read the rest of the article).

Yes, indeedy, so no doubt the new Finance Reform Bill begins with Fannie and Freddie, right? Oh, so wrong. Chris Dodd, who benefited mightily from Fannie Mae and Countrywide says, “Nooooooooo.” Dodd thinks it should wait:

Sen. Chris Dodd (D-Conn.) said Friday that legislation to address troubled mortgage lenders Fannie Mae and Freddie Mac will have to come after the current financial-reform effort.

Fannie and Freddie, which are known as “government-sponsored enterprises” (GSEs), have been a lightning rod for criticism of Democrats during the financial reform debate.

Dodd, who is chairman of the Banking Committee and has led the effort to craft a financial regulatory reform bill, said that there was not enough room in the legislation for rules covering Fannie and Freddie.

“Fannie and Freddie and the whole GSE system and it’s a great question and a legitimate one in desperate need of reform,” he said on CNBC. “But candidly there’s only so much I could only take on with this bill, and so that comes up. But not in this round. It’s in the next wave here we have to deal with GSEs.”

Well, sure, that makes sense, right? If you live in Upside-Down World, anyway (click HERE to read the rest). What a glaring, blatant, prop up for those two entities that have done SO much to destroy the housing market. Unbelievable… (Click here for the rest.)

Here ends the piece from 2010.

Now for why I am sharing this with you again. I trust you are sitting down. If you are not, you might want to do so. Okay. From Bloomberg News:

The chief executive officers of Fannie Mae and Freddie Mac may see more than a sixfold increase in their compensation to $4 million in spite of objections from President Barack Obama’s administration and some lawmakers.

The Federal Housing Finance Agency, which controls the mortgage giants and has sole authority over their CEOs’ pay, allowed Fannie Mae and Freddie Mac to return compensation closer to historic levels. Fannie Mae CEO Timothy J. Mayopoulos, whose pay had been set at $600,000 since 2012, was given a base salary of $750,000, more than $2 million in deferred pay and performance-based awards of as much as $1.2 million, according to a public filing on Wednesday.

Fannie Mae and Freddie Mac, which have operated with explicit U.S. backing since 2008 following the financial crisis, were told earlier this year by the FHFA that they could consider submitting proposals for new pay plans for Mayopoulos and Don Layton, CEO of Freddie Mac. Layton is also eligible for the same package of as much as $4 million, a separate filing Wednesday shows.

White House press secretary Josh Earnest addressed the pay question in May by saying executive compensation at Fannie Mae and Freddie Mac should be treated differently because the mortgage giants “benefit significantly from a backstop that is provided by the taxpayer.” Members of the House and Senate have also complained. Senator Mark Warner, a Virginia Democrat, said in a statement Wednesday that the raises signal a return to business as usual and “fly in the face of the legislative intent” to restructure the federal role in mortgage finance. […] (Click here to read the rest.)

Well, allow me to add MY objection to this as well. Are you KIDDING me with this?? A $3.4 MILLION RAISE???? For CEOs of organizations that were largely responsible for the housing collapse and which we, the taxpayers, bailed out in a massive, gigantic fashion??

Meanwhile, in other news, the Jobs participation rate in this country has dropped to 62.6%. You read that right. Less than TWO THIRDS of the nation have jobs. And, get this, it is the LOWEST since 1977. And while these two CEOs are about to get unimaginable raises, the rest of the working stiffs have stagnant wages.

That’s some mighty nice work if you can get, wouldn’t you say?

This is an Open Thread.

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21 Responses to “About Fannie Mae And Freddie Mac – AGAIN *Open Thread*”

  1. kenoshamarge Says:

    The Federal Housing Finance Agency, which controls the mortgage giants and has sole authority over their CEOs’ pay, allowed Fannie Mae and Freddie Mac to return compensation closer to historic levels.

    So even the free-spending Obama doesn’t like this and I would bet that the Representatives facing re-election in 2016 won’t like it and yet some bureaucrats, unelected bureaucrats get to do this. I can feel my blood pressure rising and once again I have to say this ain’t no way to run a railroad. Or anything else for that matter.

    • Rabble Rouser Reverend Amy Says:

      You aren’t only kidding, Marge. Isn’t it just incredible?? How in the WORLD does one even suggest going from $600k, which is a mighty nice sum in the first place, to $4 MILLION dollars when TAXPAYERS are footing so much of the bill? It is indeed insanity…

  2. foxyladi14 Says:

    I feel the same way Marge. 😯

  3. foxyladi14 Says:

    This will make everyone feel better.

    Happy Birthday America. 😀

    • kenoshamarge Says:

      Outstanding ! Thank for this Foxy!

    • Rabble Rouser Reverend Amy Says:

      Thank you so much, Foxy! Yes, a nice respite indeed.

      Btw, I have a video for tomorrow’s post that moved me to tears. I hope y’all will like it. 🙂

  4. kenoshamarge Says:

    A good week that he personally did absolutely nothing to bring about.

    • Rabble Rouser Reverend Amy Says:

      You know who else shares that opinion, besides most of us here? None other than the brilliant Jonah Goldberg! He made that observation last night that Obama is taking victory laps for victories he had nothing to do with whatsoever.

      What else is new, right?

  5. Rabble Rouser Reverend Amy Says:

    I want to share this lengthy interview with Gov. Haley recently abt what happened here at the Emanuel AME Church. She is a great leader:

  6. foxyladi14 Says:

    Oh!!! the kids these days. 😯

  7. foxyladi14 Says:

  8. foxyladi14 Says:

    “To a Democrat every day is April 15th, to a Republican everyday is July 4th”….Ronald Reagan.

  9. foxyladi14 Says:

  10. helenk3 Says:

    http://www.youngcons.com/the-saddest-fourth-of-july-cartoon-you-will-ever-see/

    saddest July 4th cartoon

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