""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ remain under scrutiny in the wake of large salaries and bonuses for their executives, as lawmakers from both major parties mount a rare joint effort to criticize the GSEs and their federal regulator.[IMAGE]
No less than 60 senators ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a total of 35 Republicans and 25 Democrats ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô crossed the aisle to circulate a ""letter"":http://www.scribd.com/doc/71601953/Fannie-Freddie-Bonus-Letter-11-4-2011 Friday that denounced the ""Federal Housing Finance Agency"":http://www.fhfa.gov/ (FHFA) for signing off on $12.79 million in bonuses for ten executives with the GSEs.
""We are sincerely concerned about the message this sends to millions of American families when the unemployment rate stands at 9.0% and the housing market remains very weak,"" said lawmakers, led by ""Sen. Mark Begich"":http://begich.senate.gov/public/ (D-Alaska) and ""Sen. John Thune"":http://thune.senate.gov/public/ (R-South Dakota).
The letter underscored the role of $141 billion in taxpayer funds deployed by the federal government to shore up the sinking companies during the financial crisis.
""The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay float, must offer excessive bonuses to its executives to attract effective management strains credulity,"" it added. ""We therefore urge you to[COLUMN_BREAK]
make substantial changes to the executive compensation policies to more accurately reflect the public mission of your agency and the fiscal reality facing the GSEs and the federal government.""
Last week ""Sen. Tim Johnson"":http://www.johnson.senate.gov/public/ (D-South Dakota), chairman of the ""Senate Banking Committee"":http://banking.senate.gov/public/, pledged to call FHFA ""Acting Director Edward DeMarco"":http://www.fhfa.gov/Default.aspx?Page=67 to account at a future hearing.
He called the acting director ""responsible"" for the compensation levels in a ""statement"":http://banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=6a0682d0-0b5f-b00f-4727-ac39f2e04017&Region_id=&Issue_id, adding that ""taxpayers need to be confident that... controls are in place and the conservator is upholding its responsibilities.""
""Filings"":http://sec.gov/Archives/edgar/data/310522/000095012311017972/w81665e10vk.htm with the ""Securities and Exchange Commission"":http://www.sec.gov/ (SEC) reveal that the GSEs' senior-level executives received multimillion-dollar bonuses in addition to their base salaries.
Fannie CEO Michael Williams and Freddie CEO Ed Haldeman will both receive $900,000 in base annual salaries, along with $3.1 million in deferred payments this year.
Regulators justified the bonuses in the SEC filing by explaining that executives met 2010 goals that included injecting ""liquidity, stability and affordability [into] the U.S. housing and mortgage markets.""
Furor over the bonuses follows a string of changes for Freddie Mac, which the FHFA said Haldeman, Chairman John Koskinen, and several board members will leave as soon as the board assembles a succession plan.
In October the GSE reported a net loss of $4.4 billion over the third quarter, and revealed in a statement that it will request another $6 billion in taxpayer funds from the ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx.