Posted on 12/25/2009 7:55:43 AM PST by reaganaut1
The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.
The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government's estimate this summer of $170 billion over 10 years.
Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Under the formula, financial support would increase according to how much each firm loses in a quarter. The cap in place at the end of 2012 would apply thereafter.
By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress.
While most analysts say the companies are unlikely to use the full $400 billion, Treasury officials said they decided to lift the caps to eliminate any uncertainty among investors about the government's commitments. But the timing of the announcement on a traditionally slow news day raised eyebrows.
"The companies are nowhere close to using the $400 billion they had before, so why do this now?" said Bert Ely, a banking consultant in Alexandria, Va. "It's possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets."
Fannie Mae and Freddie Mac provide vital liquidity to the mortgage industry by purchasing home loans from lenders and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, or about half of all mortgages.
(Excerpt) Read more at news.yahoo.com ...
We could do with a bit less of Freddie and Fannie’s brand of liquidity.
The looting of America continues apace.
UNBELIEVABLE. Let them go belly up...I DON’T UNDERSTAND THIS.
Disgusting. 2010 cannot come soon enough.
Democrat fat cats at Fannie and Freddie are in line for $4-$6 million bonuses. Who says we’re not in recovery ?
Big paydays for Fannie and Freddie bosses
By Chris Isidore, senior writer December 24, 2009: 4:21 PM ET
NEW YORK (CNNMoney.com) -- Top executives at mortgage finance giants Fannie Mae and Freddie Mac, both of which have been under government control since last year, received millions of dollars in pay in 2009, according to documents filed by the companies Thursday.
The chief executive officers of each company got annual pay packages worth $6 million apiece, while other top execs pulled in at least $2 million.
Fannie Mae (FNM, Fortune 500) CEO Michael Williams, who was promoted to CEO on April 21, will receive about $4.2 million in base salary and deferred cash payments for his time in the top job. The filing does not detail how much he was paid for his time as chief operating officer before his promotion, or what he will earn in 2010.
David Johnson, the chief financial officer and No. 2 at the company, was paid at a $3.5 million annual rate. The annual pay rate of five other top Fannie executives topped $2 million apiece.
In addition, Williams and three other top executives are eligible to receive payments pursuant to a 2008 retention program, according to the filing.
At Freddie (FRE, Fortune 500), its slightly smaller rival, CEO Charles Haldeman will receive about half his $6 million package in 2009 since he was named to the top spot on July 21.
Haldeman, former chairman of Putnam Investment Management, is due to receive $6 million in 2010.
Bruce Witherell, Freddie's chief operating officer and No. 2 at the company, was paid at a $4.5 million annual rate and is due to get that amount in 2010, while Ross Kari, the chief financial officer, was paid at a $3.5 million annual rate this year and is also due the same next year. Both joined the company since September so they will get only a fraction of that money this year.
The executives' pay packages were approved by both the Federal Housing Finance Agency, the regulator that oversees their operations, as well as the Treasury Department, according to the filings.
Geez, Where’s ‘Bondzilla’?
Keep dry, LandL.
The list, ping
Easy. They are flailing and floundering trying to hide the fact they are bankrupt. The only way they can continue the insane Socialist programs of the last 50 years is printing money and borrowing from anyone foolish enough to loan them money. No chance of ever fulfilling the obligations with tax revenue. Simple ain’t it.
Several days ago Glen Beck warned this would happen before year end -
....as is typical of obama they do yet another weekend / holiday news dump to sweep it under the rug
Plus, it’s IMPOSSIBLE to get money out of them. I live in a luxury Condo and they will not fund any loans here. Period. They are impossible..so..where is the money going?
they democrats want to implement a freddie and fannie type deal with health care. Set up a quasi private company in the health industry. Distort the prices thus creating a situation in which the private company will need a bailout down the track or it will go bankrupt. They ruined the housing industry and they’ll ruin the health care industry
Who knows. Up in smoke? In to Obama pals pockets? It is truly hopeless. President Madoff is in full stride.
Merry Christmas!
Never has so many truly incompetent people been rewarded so undeservedly.
I wonder who is getting the really big bonuses?
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