If you didn’t know better, you would think that Fannie Mae and Freddie Mac didn’t need a bail out a mere two years ago. You would think that the housing crisis was solved if you went by the seven figure paychecks some of Fannie and Freddie’s top executives earned.
But then, is this really a surprise? By now we’ve seen countless examples of tax payer bail outs followed by huge pay increases and bonuses for the executives. One almost expects the same would happen with Freddie and Fannie. If there’s money to grab, be it earned or not, you can bet the top executives will find a way to funnel it into their bank accounts.
At the same time, foreclosures continue. People continue to lose their homes. Then there are the cuts in pay and benefits – at least for the Americans who still have jobs. Let’s add the demonization of collective bargaining, by those who claim that attacking unions is about “the right to work.”
Naturally, the top executives are feeling the pinch as they struggle to keep the table and put food on it. According to Politico,
“Securities and Exchange Commission documents show that Ed Haldeman, who announced last week that he is stepping down as Freddie Mac’s CEO, received a base salary of $900,000 last year yet took home an additional $2.3 million in bonus pay. Records show other Fannie and Freddie executives got similar Wall Street-style compensation packages; Fannie Mae CEO Michael Williams, for example, got $2.37 million in performance bonuses.”
If you’re wondering what these super star executives did to earn seven figure bonuses, they have an answer that will thrill you to no end.
“Freddie Mac has done a considerable amount on behalf of the American taxpayers to support the housing finance market since entering into conservatorship,” Freddie spokesman Michael Cosgrove, told POLITICO on Monday. “We’re providing mortgage funding and continuous liquidity to the market. Together with Fannie Mae, we’ve funded the large majority of the nation’s residential loans. We’re insisting on responsible lending.”
In reality, Ed Haldeman got $2.3 million for a job transfer.
You may recall that Freddie and Fannie were supposed to help home owners under the President’s Home Affordable Modification Program. The number of people they helped fell way below the number of people who qualified. In Freddie Mac’s case a whopping 160,000 people were helped. Fannie Mae managed to help 400,000.
You’ll be even more pleased to know they are resisting plans to modify troubled mortgages because it isn’t part of the legal mandate. The problem is they have also resisted helping people who qualified for mortgage modification.
In short, we bailed Freddie and Fannie out. Many, many Americans they were supposed to help with mortgage modification fell through the cracks. Still, they managed to reward the top executives for a job well done. A friend of mine suggested it’s time to occupy Freddie Mac and Fannie Mae. I think he’s right.