Freddie Mac and Fannie pass the Buck on the Bill…$
Game Changer…once the government took over Fannie and Freddie tax payers now own the debt on $160 million defending mortgage finance companies. The worst part is that $132 million went to defending two entities and their former executives over accounting improprieties that occurred years before the lending crisis. Freddie’s problems arose in 2003 while Fannie’s in 2004 on overseeing its income and having to reduce their past earnings by $6.3 billion. With new representation, Neugebauer, we can expect to hear more in regards to proper oversight with taxpayers in mind.
In-depth reports on these companies accounting practices accused Fannie’s top executives of taking actions to manipulate profits spitting out $115 millions in improper bonuses! A law suit against the former executives by the Office of Federal Housing Enterprise Oversight for $100 million in fines and $115 million in restitution only settled with returned compensation of $31.4 million… all while taxpayers get billed to defend these executives and the mortgage giants.
Employment contracts and company by-laws usually protect, or indemnify, executives and directors against liabilities, including legal fees associated with defending against such suits. After the government moved to back Fannie and Freddie, the Federal Housing Finance Agency agreed to continue paying to defend the executives, with the taxpayers covering the costs.
There is recently no trial set date and depositions still need to be taken, so there is no real end to the legal fees continuing to roll on to our shoulders unless the government finds an end to the suit.
Either way, if we pay it through taxes or through a form of home financing consumption the buck trickles down to you, me and us all…