Bigger bonuses after bigger losses?
Freddie Mac has just requested $6 billion in additional federal aid after third quarter losses of $4.4 billion, just one day after it was revealed that combined with Fannie Mae, the government sponsored entity granted nearly $13 million in bonuses to executives, citing they had marginally met an internal goal of modifying loans.
Critics are irate about the bonuses from taxpayer money because the CEO of Freddie Mac recently announced that he would be stepping down without citing a reason- his portion of the bonuses is $2.5 million after a base salary of $1 million.
None of these bonuses match up with a $4.4 billion loss in one quarter and pleas for $6 billion in additional government funding. The phrase “golden parachutes” has been buzzing around the AGBeat offices all week.
How many more billions of dollars do they need?
Freddie Mac states that the losses are not due to their poor performance, rather they have done well to refinance troubled borrowers at lower rates which inevitably puts less money in their pockets, and that mortgage insurers pay less when homeowners default.
In the last three years, Fannie and Freddie have received roughly $170 billion in bailout money from the government (taxpayers) and new estimates say another $51 billion may be required to keep the two companies on life support just through 2014 which is among the many reasons, the call to dissolve the agencies is getting louder.