As Americans continue to suffer in this foreclosure crisis, the fat cats on top of the pile are laughing all the way to the bank. Fannie Mae and Freddie Mac together underwrite the majority of home loans in the United States. As reported in today’s Wall Street Journal, while Americans continue to suffer, the companies on Thursday disclosed new pay packages under which Fannie CEO Michael Williams and Freddie CEO Charles (Ed) Haldeman Jr. will earn as much as $6 million a year, including bonuses, well above their current terms. The packages came with the blessing of the Treasury, which has pumped a combined total of about $112 billion of capital into the companies over the past year to keep them in operation, and the Federal Housing Finance Agency, or FHFA, which regulates the companies.
Such massive paychecks to unprofitable operations are unconscionable under any circumstances but it is especially egregious given the fact that the paychecks come from you, the American taxpayer. The same taxpayer who cannot find a job and who cannot get his mortgage modified because the lenders cannot process the paperwork. And when they finally get the paperwork straight, the homeowner is told they don’t qualify under the program guidelines. These massive expenditures are stacked on top of the $75 billion the government has pumped into lenders to encourage mortgage modifications, money that is being utterly wasted since, as reported earlier, only 311,000 modifications have been processed at this point in time.