Senator John McCain (R-Ariz.) is demanding the termination of Federal Housing Finance Authority (FHFA) Director Edward DeMarco after DeMarco approved the multi-million dollar bonuses of several Fannie Mae and Freddie Mac executives while at the same time asking for yet more bailout money from U.S. taxpayers. The FHFA reports the two lending servicers have borrowed $169 billion from the U.S. Treasury since the two companies were taken under government conservatorship and that the total loan amount may reach as high as $311 billion. McCain called the situation corrupt and demanded action be taken to protect American homes and taxpayer dollars. For more on this continue reading the following article from TheStreet.
Senator John McCain (R-Ariz.) on Friday railed against $12.9 million in bonuses being paid-out to executives of Fannie Mae (FNMA) and Freddie Mac (FMCC), according to a report in The Hill.
Citing the “outright corruption and blatant abuse of the American taxpayer that’s been taking place at the hands of Fannie Mae and Freddie Mac,” McCain called for heads to roll, including “the guy who approved these payouts,” naming Federal Housing Finance Agency director, “Mr. Edward J. DeMarco.”
Fannie Mae and Freddie Mac were taken under government conservatorship at the height of the financial crisis in Sept. 2008, as the mortgage giants were overwhelmed by the decline in housing prices and rise in loan delinquencies. The Federal Housing Finance Agency regulates both government-sponsored enterprises, known as GSEs.
McCain’s tongue lashing followed Freddie Mac’s report on Thursday of a $4.4 billion third-quarter loss and plans by the FHFA to request another $6 billion in government bailout money for Freddie, in part to cover Freddie’s $1.6 billion quarterly dividend payment to the government.
The Hill reported that McCain was pounding the podium while bashing DeMarco for continuing the GSE’s tradition of enriching its executives.
The senator said the Senate “should be ashamed if we let this happen,” since “every day more and more Americans are losing their jobs and their homes, and we’re allowing these people to take home annual salaries of $900,000 and bonuses of millions of dollars, all the while they ask the taxpayers for $6 billion today.”
Referring to the $900,000 base salary of outgoing Freddie Mac CEO Ed Halderman, who, received an additional bonus of $2.3 million this year, McCain said “I bet you there are some patriotic, talented Americans that would be willing to serve on Fannie and Freddie without being paid $900,000 a year and millions of dollars in bonuses, I really believe that.”
The FHFA on Oct. 27 said that Fannie and Freddie had borrowed $169 billion from the U.S. Treasury, and projected that “cumulative Treasury draws,” or borrowings of taxpayer funds, would “range from $220 billion to $311 billion.”
The agency hopes to recoup some of the GSEs’ losses, with its September lawsuits against 17 large banks — including Bank of America (BAC), JPMorgan Chase (JPM), Goldman Sachs(GS), Morgan Stanley (MS), and Citigroup (C) — to demand full rescission and recovery of losses sustained by the GSEs from the purchase of nearly $200 billion in mortgage-backed securities from the banks.
This article was republished with permission from TheStreet.