Author Topic: Outgoing Freddie CEO Gets $4 Million Bonus To Receive $21 Billion In Bailouts  (Read 1978 times)

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Final Tally - Outgoing Freddie CEO Gets $4 Million Bonus To Receive $21 Billion In Bailouts After Massive Q3 Loss
Submitted by Tyler Durden on 11/03/2011 13:09 -0400

Freddie Mac


http://www.zerohedge.com/news/final-tally-outgoing-freddie-ceo-gets-4-million-bonus-receive-21-billion-bailouts-after-massive




When last week we reported about the scandal of outgoing Freddie Mac CEO Ed Haldeman receiving at least $3.9 million as a reward for his two year tenure at the top of the insolvent and nationalized housing entity, we said: "As the chart below demonstrates, the total "draws" received under Haldeman's tenure amounts to $14.5 billion. This excludes the Q3 number which will be made clear next week. Something tells us with this abrupt departure, the number may be higher to quite higher than expected." As usual: when in doubt, be cynical, and be skeptical, and you will be right. Today, Freddie just reported that its Q3 draw, or required quarterly bailout amount from the Treasury, was $6 billion: the highest since Q1 2010, as a result of a massive loss of $4.4 billion. This means that during his tenure which ended just after the completin of Q3, Freddie has been "rewarded" with $20.5 billion in taxpayer capital merely to keep the zombie entity in operation! And for this, Ed gets $4 milliom. And this is why people in America are very, very pissed.


Your rating: None Average: 5 (4 votes)






WTF!!!!!!!!!!!!!!!   

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
..Freddie Mac reports Q3 loss, asks for $6B in aid
By DEREK KRAVITZ - AP Economics Writer | AP – 3 mins 42 secs ago....




WASHINGTON (AP) — Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.

Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.

This quarter's $6 billion request from taxpayers is the largest since April 2010.

Freddie's losses are increasing mainly for two reasons: Many homeowners are paying less interest because they are able to refinance at lower mortgage rates. And failing and bankrupt mortgage insurers are not paying out as much money when homeowners default.

The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.

Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates it could cost up to $51 billion more to support the companies through 2014 after subtracting dividend payments.

Freddie and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.

Charles E. Haldeman Jr., Freddie's chief executive, said many homeowners are refinancing at lower mortgage rates or are shortening the terms of their mortgage. While that saves homeowners money, it is pushing Freddie deeper into the red.

"In fact, borrowers we helped to refinance will save an average of $2,500 in interest payments during the next year," he said.

For Freddie, those losses are temporary because interest rates will remain low for the foreseeable future, said Jim Vogel, an interest-rate specialist at FTN Financial.

Still, many homeowners are still defaulting on their mortgages. Unemployment remains stubbornly high at 9.1 percent. The percentage of those who are late by 90 days or more on their monthly mortgage payments was virtually unchanged at 3.51 percent in the July-September quarter.

Another reason Freddie needs more aid is because it has received less money from mortgage insurers.

Many riskier mortgage loans require insurance, which is meant to protect lenders and investors from losses if a homeowner defaults and the lender doesn't recoup costs through foreclosure. The borrower pays a monthly premium for the insurance, typically a set percentage of the total mortgage loan. But when those mortgage insurers fail, they pay out less in claims.

For example, the main subsidiary of private mortgage insurer PMI Group was seized by Arizona insurance regulators last month. That followed heavy losses the group incurred after the housing market collapsed. PMI is now paying claims at just 50 percent.

As a result, the amount that Freddie has set aside for losses increased from $2 billion in the January-March quarter to $3.6 billion in the July-September quarter.

Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world. When property values drop, homeowners default — either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

Fewer foreclosures and delays in foreclosure processing because of a yearlong government investigation into mortgage lending practices have reduced the companies' projected losses.

Fannie and Freddie are required to pay 10 percent dividends on the government money they receive. Freddie paid $1.6 billion in dividends to the Treasury Department in the July-September quarter.

Pressure continues on the government to eliminate Fannie and Freddie and reduce taxpayers' exposure to risk. The Treasury Department put forward a plan in February to slowly dissolve Fannie and Freddie, although that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.

..







AND GUESS WHAT THOSE WONDER DEMOCRATS DID IN DODD FRANK? ? ? ? ?



THEY EXEMPTED FANNY AND FREDDY FROM ANY REGULATION WHATSOEVER!   



WHERE IS OWS ON THIS?   ANSWER?  NOWHERE.   

whork

  • Getbig V
  • *****
  • Posts: 6587
  • Getbig!

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Free Republic
Browse · Search   Pings · Mail   News/Activism
Topics · Post Article
Skip to comments.

Freddie Mac: A Bottomless Pit Of Taxpayer Losses?
IBD Editorials ^ | November 3, 2011 | Editor
Posted on November 3, 2011 9:10:25 PM EDT by Kaslin

Housing Crisis: Government mortgage company Freddie Mac lost an additional $6 billion in the third quarter and wants Congress to bail it out with taxpayers' money. How about dissolving the failed institution instead?

Freddie Mac is an almost bottomless pit of financial malfeasance. Last year alone it lost $19.8 billion. Taxpayers have so far been drained of as much as $169 billion to save Freddie Mac and Fannie Mae, its federal sister that has also been a bust.

Washington estimates they could burn through another $51 billion by the end of 2014.

The anti-capitalists blame Wall Street for the housing meltdown. But Freddie and Fannie are at the heart of the mess. They bought bundles of toxic mortgages from other lenders, which government coerced to make loans to borrowers with shaky credit.

As much as 30% of the loans Freddie and Fannie bought could be regarded as subprime.

The pair was also, Cato Institute analyst Mark Calabria wrote earlier this year, "the largest single investor in subprime private label mortgage-backed securities.

"During the height of the housing bubble, almost 40% of newly issued private-label subprime securities were purchased by Fannie Mae and Freddie Mac."

Freddie and Fannie literally became dumping grounds for the bad loans private lenders had to make in order to comply with government regulations. But both also had their own federal rules to deal with.

(Excerpt) Read more at news.investors.com ...

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Sixty Senators Decry 'Wildly Imprudent' Bonuses at Fannie, Freddie
FNC ^





Sixty senators from both parties complained Friday to the chief regulator for Fannie Mae and Freddie Mac that the nearly $13 million in bonuses to executives at the bailed-out mortgage giants were "wildly imprudent," as the lawmakers called for "substantial changes" to executive pay policies.




(Excerpt) Read more at foxnews.com ...


Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Free Republic
Browse · Search   Pings · Mail   News/Activism
Topics · Post Article
Skip to comments.

Fannie Mae taps $7.8 billion from Treasury, loss widens
Reuters ^
Posted on November 8, 2011 7:55:47 PM EST by Sub-Driver

Fannie Mae taps $7.8 billion from Treasury, loss widens Photo 6:42pm EST

WASHINGTON (Reuters) - Fannie Mae, the biggest source of money for U.S. home loans, on Tuesday said it needed a further $7.8 billion in federal aid to stay afloat as a shaky housing market widened its third-quarter loss to $5.1 billion.

Fannie Mae also attributed the deeper cash drain to losses on derivatives that are used to hedge the firm's exposure to swings in interest rates and expenses related to home loans made prior to the 2008 financial collapse. In the year-earlier quarter it had a loss of a $1.3 billion.

Fannie Mae, seized by the government in 2008, has drawn $112.6 billion in bailout funds from the Treasury Department since 2008 and has paid $17.2 billion to the government in the form of dividends.

"Fannie Mae is working to reduce losses on our legacy book and limit taxpayer exposure," Susan McFarland, the company's executive vice president and chief financial officer, said in a statement.

The government-owned company and its smaller rival Freddie Mac were taken over in the financial crisis as losses on subprime mortgages threatened insolvency. Given the crucial role the two play in U.S. housing finance, owning or guaranteeing about half of all mortgages, the government has pledged unlimited funds to keep the firms afloat through the end of 2012.

(Excerpt) Read more at reuters.com ...

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
Fannie, Freddie execs score $100 million payday
By Chris Isidore @CNNMoney November 15, 2011: 5:53 AM ET0:00 / 2:30Outrage over Fannie and Freddie bonuses
NEW YORK (CNNMoney) -- Mortgage finance giants Fannie Mae and Freddie Mac received the biggest federal bailout of the financial crisis. And nearly $100 million of those tax dollars went to lucrative pay packages for top executives, filings show.

The top five executives at Fannie Mae received $33.3 million in 2009 and 2010, while the top five at Freddie Mac received $28.1 million. And each company has set pay targets of as much as $17 million for its top managers for 2011.

2138PrintCommentThat's a total of $95.4 million, which will essentially be coming from taxpayers, who have been keeping the mortgage finance giants alive with regular quarterly cash infusions since the Federal Home Finance Agency (FHFA) took control of the companies in September 2008.

Fannie CEO Michael Williams and Freddie CEO Charles Halderman, each received about $5.5 million in pay for last year, and they could receive more when their final deferred compensation for 2010 is set. All the executives receive a significant portion of their pay in the year or years after they earn it.

The CEOs' pay targets for 2011 are about $6 million a piece, though Halderman might not get much of that money since he's announced plans to leave Freddie sometime in 2012. He must still be at the company in order to receive the deferred compensation. His base pay for 2011 is $900,000, with most of the rest of his compensation coming in deferred payments.

The salary filings were all made by the companies in early 2011, but received relatively little attention until a recent report by Politico, the political news Web site, which highlighted about $12.8 million in bonuses the executives received for last year.

That published report sparked a political firestorm on Capitol Hill that could lead to legislation to put strict limits on pay at the two firms. But it only told part of the story. The full extent of salary, deferred pay and bonuses are only found in the filings.

Rep. Spencer Bachus, the chairman of the House Financial Services Committee, has scheduled a vote in his committee Tuesday on his own legislation that would suspend the compensation packages of top executives at the firms.

"The fact that the top executives of these failed companies are receiving multi-million dollar pay packages, plus millions more in bonuses, is an added insult to the taxpayers who are forced to foot the bill," Bachus said in a statement announcing plans to hold the vote.

The Democrat-controlled Senate Banking Committee also plans to hold a hearing on the matter on Tuesday. Additionally, the Republican-controlled House Committee on Oversight and Government Reform is set to call Edward DeMarco, the acting director of FHFA, and the CEOs of the two firms, to a hearing on the pay packages on Wednesday.

Sixty senators from both parties have already sent a letter to DeMarco asking that he change the compensation policy of the two companies. FHFA has final say on pay at the two companies.

"The idea that Fannie Mae and Freddie Mac, which rely on taxpayer funding to stay afloat, must offer excessive bonuses to its executives to attract effective management strains credulity," the letter said.

DeMarco responded to the senators saying that the executives who were running the companies in 2008 when the problems occurred have left without any golden parachutes, and that effective management is needed to make sure that taxpayer losses at the firms do not rise and the companies continue to function. He said current executive pay at the firm is about 40% less than before the bailouts.

0:00 / 03:12 How Fannie Mae spruces up foreclosures
"I need to ensure that the companies have people with the skills needed to manage the credit and interest rate risks of $5 trillion worth of mortgage assets and $1 trillion of annual new business that the American taxpayer is supporting," he wrote.

Spokespeople for Fannie and Freddie declined to comment ahead of the hearings.

The latest cost estimate from FHFA is that the two bailouts will end up with a net cost to taxpayers of about $124 billion through 2014, though that figure could rise as high as $193 billion. Even the lower cost estimate will make it the most expensive bailout of the financial crisis -- far more costly than bailing out the nation's banks or automakers.

The CEOs and the other top executives at Fannie and Freddie get all their pay in cash, and none of it in company stock , which is generally deemed worthless.

The company filings that disclosed the pay back in February also defended the pay based on the work they had done.

Fannie's filing said that under Williams' leadership, the company "made solid progress in managing credit losses on its pre-2009 book of business, acquired a 2010 book of business with a strong credit profile that is expected to be profitable, and achieved substantial progress in making the company more operationally disciplined and efficient."



http://money.cnn.com/2011/11/15/news/companies/fannie_freddie_executive_pay/index.htm?hpt=hp_t2


Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.

240 is Back

  • Getbig V
  • *****
  • Posts: 102387
  • Complete website for only $300- www.300website.com
they should pay $300,000 to someone for a history lesson.

Soul Crusher

  • Competitors
  • Getbig V
  • *****
  • Posts: 41760
  • Doesnt lie about lifting.
they should pay $300,000 to someone for a history lesson.

 ::)  ::)   Right on cue.   

Can you please post your threads on Krugman being paid by Enron? 

240 is Back

  • Getbig V
  • *****
  • Posts: 102387
  • Complete website for only $300- www.300website.com
those CEOs all belong in jail, man.  have a beer with breakfast, relax champ.