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Fannie, Freddie legal fees: $110 million and counting

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-22-12 08:24 AM
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Fannie, Freddie legal fees: $110 million and counting
"Fannie, Freddie legal fees: $110 million and counting
By Jennifer Liberto @CNNMoney February 22, 2012: 6:07 AM ET

WASHINGTON (CNNMoney) -- A watchdog agency said Wednesday that the legal tab for former leaders of mortgage finance giants Fannie Mae and Freddie Mac is at least $110 million.

And taxpayers have paid at least $47 million of it, according to an Office of Inspector General of the Federal Housing Finance Agency report.

And the total bill could be even higher since the inspector general report focused on only one particular legal case against Fannie Mae, and isn't an exhaustive account of the housing giants' legal bills, reportedly more than $160 million, according to a 2011 congressional hearing.

<snip>

The Federal Housing Finance Agency inherited legal bills when it took Fannie Mae and Freddie Mac under conservatorship in 2008. The bills are for employees long gone but must be paid as a part of benefits packages agreed to by legal contract."


http://money.cnn.com/2012/02/22/news/economy/fannie_fre... /


Fannie Mae
"The Federal National Mortgage Association (FNMA; OTCBB: FNMA), commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.<2>"


http://en.wikipedia.org/wiki/Fannie_Mae (What in hell were the Democratic Congress and President thinking?)

Freddie Mac


"History

From 1938 to 1968, the Federal National Mortgage Association (Fannie Mae) was the sole institution that bought mortgages from depository institutions, principally savings and loan associations, which encouraged more mortgage lending and effectively insured the value of mortgages by the US government.

In 1968, Fannie Mae split into a private corporation and a publicly financed institution.

The private corporation was still called Fannie Mae and its charter continued to support the purchase of mortgages from savings and loan associations and other depository institutions, but without an explicit insurance policy that guaranteed the value of the mortgages.

The publicly financed institution was named the Government National Mortgage Association (Ginnie Mae) and it explicitly guaranteed the repayments of securities backed by mortgages made to government employees or veterans (the mortgages themselves were also guaranteed by other government organizations).

To provide competition for the newly private Fannie Mae and to further increase the availability of funds to finance mortgages and home ownership, Congress then established the Federal Home Loan Mortgage Corporation (Freddie Mac) as a The charter of Freddie Mac was essentially the same as Fannie Mae's newly private charter: to expand the secondary market for mortgages and mortgage backed securities by buying mortgages made by savings and loan associations and other depository institutions."


http://en.wikipedia.org/wiki/Freddie_Mac

The worst of all possible worlds, IMO. Privately owned and financed with public funds.

The privatized folk ran Fannie and Freddie into the ground, taking big salaries and any profits along the way, and ran. And let's not forget the huge consulting fees they paid private persons, such as to "historians."

(Amtrak was a variation. We started with privately owned railroads, then Nixon and Congress created Amtrak. Either way, the taxpayer got screwn.)


Meanwhile, they're trying to privatize the Post Office, too. Or destroy it.

When the hell is the taxpayer going to draw a line?

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