Fannie, Freddie Stick Taxpayers with $160 Million in Legal Bills
by PubliusFrom The New York Times:
Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.
The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.
Documents reviewed by The New York Times indicate that taxpayers have paid $24.2 million to law firms defending three of Fannie’s former top executives: Franklin D. Raines, its former chief executive; Timothy Howard, its former chief financial officer; and Leanne Spencer, the former controller.
Late last year, Randy Neugebauer, Republican of Texas and now chairman of the oversight subcommittee of the House Financial Services Committee, requested the figures from the Federal Housing Finance Agency. It is the regulator charged with overseeing the mortgage finance companies and acts as their conservator, trying to preserve the company’s assets on behalf of taxpayers.
“One of the things I feel very strongly about is we need to be doing everything we can to minimize any further exposure to the taxpayers associated with these companies,” Mr. Neugebauer said in an interview last week.
It is typical for corporations to cover such fees unless an executive is found to be at fault. In this case, if the former executives are found liable, the government can try to recoup the costs, but that could prove challenging.
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56 Comments
It's time for the government to get out of the mortgage business.
Or is it the redistribution business?
It's hard to tell.
Time has long past for Fat Fannie, and Bloated Freddie to get off the taxpayers dole.
The sooner Congress either de-fund, or divest these financial black holes, the better! Also, beside tort reform;
Repeal the "1977 Community Reinvestment Act," and all of the Clinton add-ons. Besides banking, auto, and insurance, the government DOES NOT belong in the real estate business either.
.
Franklin D. Raines, Timothy Howard, and Leanne Spencer, should all be doing some time in the "big" house.
No…………..not the House of Representatives……………………… Leavenworth.
Indemnification should never apply to quasi government boot licking lackeys.
$160 million…WTF? What law firms are they using? Only the ones that donate to the DNC?
Everything they do will be "stuck on the taxpayers… that's how government run "anything" works.
$160 mil? More like $6 TRILLION in obligations.
$160 million.
Do you remember when that was a lot? Good times…
The leadership of Fannie and Freddie has us tax payers paying their legal bills to defend themselves against criminal corruption and fraud against the same people that are paying their legal billls?!!! WTF!! This is Bull $hit!!!
Another great example of the Washington revolving door. These are not corporations, they are Government Run Entity’s. If these were truly private corporations, these corporate officers (criminals) would be in prison. There is still much work to be done America.
Everything the government touches turns to crap… The housing market is no exception.
Corruption and NOTHING BUT CORRUPTION. I can hardly wait for the the cockroaches to be exterminated. Our country has been taken over by the mob. We need to stop this. We cannot give up.
privatize the gains
socialize the losses
One hundred and sixty million……is that over and above the 'fees and gifts' for Frank and Dodd?
Obama's Financial Reform Bill doesn't apply to Fannie and Freddie. Hmmmm… I wonder why?
This administration is the most corrupt administration in US history. I can't wait until 2012 when we kick the MARXIST out of office.
160 million in legals is chump change.
Contrast that to the hundreds of billions of dollars worth of fraudulent securities they pawned off on the entire world over ten years. Fannie and Freddie; Franklin Raines and Jamie Gorelick make Bernie Madoff look like Ned in the First Reader.
$160 million in legal fees ? That tells me these people are guilty as hell, and/or Hillary's Rose Law Firm is doing the billing.
Government the size of the United States Federal Government I should have already seen 10 to 15 Impeachments start in the House this cycle.
Why are the Republicans dragging their feet?
We need to pass the bill on to Barny Frank and Chuck Schumer to pay–personally!
This is all like the Clintonista schemes of the tax payer going to pay Hillery's fines for illegally plotting health care under secrecy.
There is just so many things we can do outside the law if we're assured that the tax payer will pay to get it all cleared up for us!
The deal was "in" before the dirty dealing was done!
These executives all heard from someone, "you do this for us and you'll be on top, forever!" What's a little felony fraud between friends?
off topic special request for brightbart@tv tomorrow:
Chuck Schumer (the one with the rumored illegal gun range in his home) talking about NY relying on "green" jobs for its recovery. How many people do we need to lose in my home state before we figure out that liberalism is the problem?
http://bcove.me/ovzp9u2p
Notice how he can't figure out which camera is on him?
Because they have no balls.
He's also lying through this teeth.
Lawyers ALL pad their bills….of course with the morons in Da Gubbmint paying, I doubt anyone is looking at the time sheets. They are all scum…….Republicans too….
$132 million essentially stolen from the tax payers. Someone better go to jail. This is unacceptable. Republicans, if you don't drag these scum bags up to the hill and hold people accountable you will be out on the street Nov 6th 2012! It's time to drain the swamp (to borrow a phrase from the queen of corruption)!
Flushing tax dollars down the toilet is preferable to it going into the pockets of lawyers.
Let freddie and fanny fail. What is the government doing in the mortgage business anyway?
http://www.mtgprofessor.com/a%20-%20secondary%20m...
This entire freddie mac and fannie mae seems like nothing more than ponzi schemes to funnel billions of US dollars down the financial money pit. Time for the govt to get out of this business.
Just one more of a million good reasons to not pay federal income tax. What's the guvmint gonna do? Imprison all of us?
If Pigford can generate a couple of billionI can imagine the hundreds of billions if not trillions lawyers are trying to get. Maybe these lawsuits will go away if Fredie and Fannie Mac's lawyer makes an offer settlemet stating that the the lawyers can ony make $1,000. That should dry up the lawsuits.
Walter Hanson
MInneapolis, MN
Lets see, we have corrupt lawyers representing corrupt politicians and corrupt govt workers, who all work within a now corrupted system.
If I didn't receive a W-2, I would not file or pay taxes anymore. Wouldn't want to be a source for more potential corruption.
< Ann >
If anyone cares my commentary left at The Economist in 2007 and 2008 already addresses the subject. I'm tired of redundant comments.
The Economist made their bed. And the sheets are wet.
I'm still getting kicks & giggles from the GS Food Taster. Genius caption.. Bravo.
Now hold on – there must be some honest lawyers and some honest politicians and some honest gov't …..
(knuckles just struck by lightning)
I think it was Jesus who said " it is easier for a corrupt rich lawyer or rich corrupt politician to slip thru the eye of a needle then be admitted to the kingdom of heaven"
<Ann's pretty sure it was something like that…>
I would be happy if $160 million was all these corrupt institutions would stick us with.
First, explicitly prevent any bailouts of these two monstrosities. Then, privatize them and watch as they are torn apart by their own internal contradictions. These are not businesses, but homonculi forged by the state to spread ruin on the housing market.
and lawyers too.
ROTFLMAO. Blame Bush-damn right. Who was in charge. The reason Fannie and Freddie were bailed out is China had invested heavily in the loans these institutions had guaranteed. When they went belly up, if they were not bailed out, China was calling in their $750 billion Bush had borrowed to finance the Iraq war. Oh, please spare me the lies of the CRA loans. According the Henry Paulson, these were not the problem. The problem were the sub-prime loans that were guaranteed starting in 2005.
$160 Million !!! For WHAT? They didn't produce ANYTHING!?!? What do we have to show for $160 Million??? Nothing!
Disolve Fannie and Freddie… all their money could be better used anywhere else…
I would gladly pay for some jail cells but I doubt that will ever happen.
Healthcare, Mortgages, Education, Autos, Energy…to the Government, its all a means for "spreading the wealth".
And they want to put Tom delay away for three years but these guys at F&F get away with this?
How long oh Lord HOW LONG?
Its time for the government to get back to conforming loans and to let the private market be the risk takers.
It will be a long time before they are out of housing. The next step, according to Moody's yesterday, will be a guarantee on the mortgage pools, but not the individual mortgages. Participating banks, or new GSE's, would pay a fee much like the FDIC fee, and from that government losses would supposedly be covered.
That article is from 2003. There are now 5.7 trillion in mortgages, not 3, and the estimated interest rate without government support is a full 1 percent higher, not 1/4%. That assumes there would be enough lending to stop a market collapse.
Its not a Ponzi scheme. A Ponzi scheme is set up so that it can not survive without new customers. The conforming loans at FNMA and FHLMC got caught up in the sub-prime mess. It was partly their fault, but those loans were profitable. They should have stuck with them.
It does if you count the 5% retention rate that shops like Countrywide would have to keep before selling their fraud infested mortgages to FNMA/FHLMC.
It does if you know that some scumbag crook with a record won't be underwriting mortgages anymore. Let's see your pals offer a Bill that does that. They wouldn't even pursue Maddoff.
You obviously haven't got a clue how this whole thing happened. Just where do you think FNMA and FHLMC's mortgages came from?
Yes.
I do have a clue.
More of a clue, than you.
In 1998-2000, I was a controlling investor in a Mortgage company. I visited Wall Street every quarter.
I sat up in a real high office building, overlooking Hanover Square, and listened as it was presented to me, as to the how, where, and why. It was the type building, that the closest you would ever get to it, would be from the outside, looking in.
I know EXACTLY how it happened.
"Unless Washington acts soon to cut spending, massive tax hikes, economic stagnation, and national bankruptcy will rob our children of the opportunity to reach for the American Dream." — Rep. Jim Jordan, R-Ohio
"The time is near at hand which must determine whether Americans are to be free men or slaves."
George Washington
Just another re-distribution of taxpayer's funds…sigh…
As many have said, the government needs to get out of the mortgage business. Any profitable sections of Fannie and Freddie should be sold to the private sector. Maybe the buildings could bring in a spot of cash. The rest should be flushed, as that's about what it's worth.
Funny isn't $160 mil…..about how much Franklin Raines was paid to run that criminal syndicate?
Well golly, as a controlling investor in a "Mortgage company" I can only imagine what the interests of the people telling you anything were.
From the top positions, to the loan originators on the street, the only way you guys ever attempt to clear your conscience is by pointing the finger and never admitting you were part of the problem.
You're right. I bet you do know EXACTLY how it happened. So why don't you answer the question?
Nope.
I have a real clear conscience.
When it became clear to me what was happening "downstream", that ultimately "someone", "somewhere" would get stuck holding the bag, I shut my operation down,
There are some things I don't do for money.
Lie, cheat, and steal are at the top of the list.
As far as me answering any questions from you, the minute that you become relevant in my world, I will consider it.
You said:
" the hundreds of billions of dollars worth of fraudulent securities they pawned off on the entire world over ten years."
and then,
"There are some things I don't do for money. Lie, cheat, and steal are at the top of the list."
Well, then I guess you do those things for free.
Parse words whatever way makes you happy and gives you the most bang for your buck Skippy.
I'm not the one who's skipping.
Ok, so neither the post nor the referenced article even mention Bush.
Who here is defending Bush anyway?
So what then is your point?
Henry Paulson, this you believe is a credible source?
Dude, do you actually think about this stuff before you type it?
How about you explain this, how is this fair?
A week after Republicans announced plans to investigate waivers granted to organizations for healthcare reform provisions, President Obama’s health department made public new waivers for more than 500 groups.
Where is my damn waiver HLBO, where is my fvcking waiver?
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