Would you expect otherwise? On Mon, Dec 28, 2009 at 9:39 AM, Bruce Majors <[email protected]>wrote:
> > > > > > The rule in Washington is to always release embarrassing news on a Friday > evening — and when it is REALLY, REALLY, REALLY shameful put it out on > Christmas Eve. > > Greg Scandlen > > > > > > http://www.washingtonpost.com/wp-dyn/content/article/2009/12/24/AR2009122401588.html > > *U.S. promises unlimited financial assistance to Fannie Mae, Freddie Mac > * > By Zachary A. Goldfarb > Washington Post Staff Writer > Friday, December 25, 2009; A01 > > The Obama administration pledged Thursday to provide unlimited financial > assistance to mortgage giants Fannie Mae < > http://projects.washingtonpost.com/post200/2007/FNM/> and Freddie Mac < > http://projects.washingtonpost.com/post200/2007/FRE/> , an eleventh-hour > move that allows the government to exceed the current $400 billion cap on > emergency aid without seeking permission from a bailout-weary Congress. > > The Christmas Eve announcement by the Treasury Department means that it > can continue to run the companies, which were seized last year, as arms of > the government for the rest of President Obama's current term. > > But even as the administration was making this open-ended financial > commitment, Fannie Mae and Freddie Mac disclosed that they had received > approval from their federal regulator to pay $42 million in Wall > Street-style compensation packages to 12 top executives for 2009. > > The compensation packages, including up to $6 million each to Fannie Mae > and Freddie Mac's chief executives, come amid an ongoing public debate about > lavish payments to executives at banks and other financial firms that have > received taxpayer aid. But while many firms on Wall Street have repaid the > assistance, there is no prospect that Fannie Mae and Freddie Mac will do so. > > > The administration faced a congressionally mandated deadline of Dec. 31 to > increase the amount of aid it could provide to Fannie Mae and Freddie Mac, > which together have already received $111 billion in assistance. > > Treasury said Thursday that its decision did not mean the firms would need > $200 billion or more apiece, but that it instead was seeking to assure > markets that the government would stand behind the companies. In a > statement, Treasury said the move "should leave no uncertainty about the > Treasury's commitment to support these firms as they continue to play a > vital role in the housing market during this current crisis." > > By promising to keep the companies solvent, the government can maintain its > sweeping power over the housing market. Fannie Mae and Freddie Mac have > played a central role in Obama administration policies to keep mortgage > interest rates low, restructure unaffordable mortgages, stop foreclosures > and funnel money to housing programs around the country. > > The Bush administration took over the firms in September 2008 as the > financial crisis entered its most severe phase and promised $200 billion to > keep the companies solvent. The Obama administration later doubled that > figure. > > While the ultimate cost of the bailouts is unknown, the administration > estimated earlier this year it would cost $171 billion, and some officials > said they expect it could rise further. Analysts have said it could be much > higher. The cost will depend in part on how aggressively the administration > continues to use the firms to stimulate the housing market because these > steps could curtail profitability. > > Under the terms of the latest decision, the administration's open-ended > commitment will expire in 2012. Then, the firms will only be allowed to > receive the balance of the $400 billion remaining today -- about $290 > billion. > > The administration is set to release broad principles in February for > reforming the companies. Many experts predict that the government will have > no choice but to hold on indefinitely to many of the companies' most > troubled assets -- mortgage investments made during the housing bubble to > less-than-worthy borrowers. > > But an administration official said it could take several years to resolve > the future of the companies, especially if Congress isn't keen to take up > the politically charged issue during the 2010 midterm election year, and if > the government wants to preserve the ability to influence the housing > market. The companies together own or insure the majority of home loans, and > no viable private system exists that could replace them. > > Even as the administration has broadened its commitment to Fannie Mae and > Freddie Mac, it said it would wind down mortgage-assistance programs, > including one that bought Fannie Mae and Freddie Mac's mortgage investments. > > > Fannie Mae and Freddie Mac have long been targets for Republicans, who say > they are evidence of how government support for the housing market > contributed to the financial crisis. > > "The Obama administration's decision to write a blank check with taxpayer > dollars for the continued bailout of Fannie Mae and Freddie Mac is > appalling," said Rep. Scott Garrett (R-N.J.), a member of the House > Financial Services subcommittee that oversees Fannie Mae and Freddie Mac. > "Not only is this a continued bailout of failed entities that need to be > privatized to protect the taxpayer, the timing of the announcement is > clearly designed to try and sneak the bailout by the taxpayers." > > On Thursday, federal officials defended the administration's new bailout > authority and the compensation packages. They said the pay was necessary to > retain talented executives who can oversee the companies' vast mortgage > holdings. > > Fannie Mae chief executive Michael J. Williams and Freddie Mac chief > executive Charles E. Haldeman each will receive a $900,000 base salary. The > rest of their compensation will be in incentive payments and bonuses > dependent on whether they stay with the companies and achieve business > targets. The compensation of other top executives will follow a similar > formula. > > While the pay is significantly more than what Fannie and Freddie executives > received a year ago, the packages are less than what top company officials > got before the government takeover. Only five executives at each firm will > be eligible to receive more than $500,000 in salary. > > "The management of these companies involves responsibility for $2 to $3 > trillion of mortgage assets," said Edward DeMarco, acting director of the > Federal Housing Finance Agency, the chief regulator of Fannie Mae and > Freddie Mac. "It is critical to the taxpayers' financial interests that > these assets be carefully managed in a difficult environment to minimize > taxpayer losses." > > -- > This group is created for discussing national issues to stop the current > administration from transforming this country into something not intended by > the founders. Any discussions that are not relevant to that topic will be > deleted. > > You received this message because you are subscribed to the Google > Groups "Tea Party Patriots" group. > To post to this group, send email to [email protected] > To unsubscribe from this group, send email to > [email protected]<tea-party-patriots%[email protected]> > For more options, visit this group at > http://groups.google.com/group/tea-party-patriots?hl=en?hl=en > > For more information on Tea Party Patriots, please visit > http://www.teapartypatriots.org. > > -- > Thanks for being part of "PoliticalForum" at Google Groups. > For options & help see http://groups.google.com/group/PoliticalForum > > * Visit our other community at > http://www.PoliticalForum.com/<http://www.politicalforum.com/> > * It's active and moderated. Register and vote in our polls. > * Read the latest breaking news, and more. -- Thanks for being part of "PoliticalForum" at Google Groups. 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