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Old 04-04-2009, 12:07 AM
Location: Mishawaka, IN
855 posts, read 2,249,686 times
Reputation: 701


Fannie, Freddie worker bonuses total $210M

By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – Fri Apr 3, 2:37 pm ET

WASHINGTON – Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.

The retention awards for more than 7,600 employees were disclosed in a letter from the companies' regulator released Friday by Sen. Charles Grassley of Iowa, the senior Republican on the Senate Finance Committee. The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.

"It's hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year," Grassley said in a statement. "It's an insult that the bonuses were made with an infusion of cash from taxpayers."

Fannie and Freddie declined to comment on Friday. Fannie had disclosed that it plans to pay four top executives at least $1 million each in retention payments that run through February. Freddie has yet to report on which executives are in line for the awards.

The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall and operate under close federal oversight with new chief executives installed by the government. Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.

The companies' federal regulator, James Lockhart of the Federal Housing Finance Agency, defended the bonuses in a March 27 letter to Grassley, noting that the collapse of the company's stock prices "destroyed years of savings for many" workers. The companies' stocks now trade below $1, down from more than $60 in fall 2007.

Lockhart denied a request Grassley made last month to release names of employees receiving at least $100,000 in bonuses, citing "personal privacy and safety reasons."

More than 70 percent of new loans in recent months have been backed by Fannie and Freddie. They own or guarantee almost 31 million mortgages worth about $5.5 trillion, more than half of all U.S home loans.

Keeping the companies "operating at full speed was best for the housing markets and best for the economy," Lockhart wrote. "That would only be possible is we retained the Fannie and Freddie teams."

But many lawmakers have little sympathy for that argument amid a public outcry over roughly $165 million in bonuses paid out last month by bailed-out insurance giant American International Group.

Earlier this week, the House passed a bill that aims to keep bailed-out financial institutions from paying their employees hefty bonuses after lawmakers had second thoughts about their vote two weeks ago to tax the bonuses away. The bill would allow the bonuses if the Treasury Department and financial regulators determine they are not "unreasonable or excessive."

Initially after the AIG flap, President Barack Obama had said he would "do everything we can to get those bonuses back." But the White House later backed down as it worked to ensure any restrictions on bonuses didn't alienate the banks and investors needed to help clean up the financial mess.

Fannie, Freddie worker bonuses total $210M (http://news.yahoo.com/s/ap/20090403/ap_on_bi_ge/mortgage_giants_bonuses - broken link)
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Old 04-04-2009, 10:07 AM
Location: WA
5,538 posts, read 22,580,489 times
Reputation: 6288
This certainly surprised me... this is even a bigger misappropriation of taxpayer funds than the AIG bonuses. I still don't know where these people are going to go without their 'retention' bonus... I would be happy to have a job without the bonus.
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Old 04-04-2009, 01:18 PM
Location: Great State of Texas
86,068 posts, read 76,646,398 times
Reputation: 27647
I've been waiting but haven't heard that Obama fired anyone over there at Freddie and Fannie.
This shows that the government seems to be picking and choosing who gets to stay and who gets to be fired. Not a very partial execution of power from our President.
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Old 04-04-2009, 10:37 PM
Location: Orlando, Florida
43,856 posts, read 46,257,544 times
Reputation: 58669
Hard to dump on people/corporations who financed you into office.
The man is between a rock and a hard place.
The rest of American tax payers will suffer.
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Old 04-04-2009, 11:22 PM
Location: Great State of Texas
86,068 posts, read 76,646,398 times
Reputation: 27647
Well it looks like the Administration has changed their minds on bonus money.
They are formulating a way these companies can get around Congress' limits by using a middleman company to actually handle the bailout money


"The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.
The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials. "
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Old 04-05-2009, 07:32 AM
Location: Maine
2,791 posts, read 1,990,823 times
Reputation: 5021
Looks like nothing has changed for Wall street and Washington, but don't worry Joe taxpayer we've got your bonus right here, bend over

here's the new boss same as the old boss.

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