Two hundred billion dollars... stupid government...

[JBond]

Does it bother anyone else that a pair of loan institutions created and regulated by the government have failed completely. What the heck is the government doing? Now after the government has failed horribly they want to spend 200 billion of yours and mine money to cover it up.

Let Fannie and Freddie die. The federal government needs to get the heck out of my pocket book to clean up the disasters that they are responsible for creating. Somebody should be going to jail. The whole thing was a horrible idea doomed from the start. But what else can you expect from the government?

Free enterprise and market demand works. The Federal Government does not work. Nothing they touch comes out for the better. Banking, energy, environment, and anything else they try to control fails. Big Brother does not know best. Big Brother is a moron.

Really? 200 billion dollars. Think about that. Congress is a joke. They must be held accountable. Dem or republican does not matter. Vote all the bums out now before it's to late.
:mad:

[burmafrd]

While it might feel good, at this moment in time it would be the absolutely DUMBEST thing to do to let them go under. The whole financial network is shaky right now. Do a little research before posting next time.

[REDVOLUTION]

At 5 trillion dollars they represent about half of the nations loans.

Yeah, just whack 'em. :rolleyes:

[JBond]

So if you are big enough you can do anything? If I make horrible decision after horrible decision my company will go out of business, but when the Federal Government does it, I have to pay for it. Ridiculous. You want to pay for a bailout of crooks, go ahead and send your savings to D.C.

I'm a little tight on cash this week. I blew it at the casino and on lottery tickets. I thought I was going to win. It was with the best intentions. I lost big. Now every member of this board must send me a $100 to get me through the week. I promise I won't go back to the casino, at least this week.

[theogt]

Let Fannie and Freddie die.Uhh...no. I plan on buying a house shortly.

[Eric_Boyer]

While it might feel good, at this moment in time it would be the absolutely DUMBEST thing to do to let them go under. The whole financial network is shaky right now. Do a little research before posting next time.

not true.

You need for faith in free markets - but self correction is always better then central planning and propping up failed business practices.

[burmafrd]

Like I told the other guy, do a littlle research before embarrasing yourself.

[JBond]

Like I told the other guy, do a littlle research before embarrasing yourself.

You must work for Bear Stearns. You obviously have more financial acumen than me. Would you be kind enough to explain why it is a good idea to throw good money, my money, down a bottomless pit? I’m just a simple small business owner here in fly over country. You will need to use small words.

Fannie and Freddie were a misguided idea by a big government congress that was doomed to failure. What has changed? Didn’t we learn anything from the S&L crisis of the 80’s. I want some one to sell me on why I should spend my hard earned money on bailing out a pair of corrupt government created groups.

I’m serious. Tell me why I should sacrifice the money that belongs to my family and employees of my company. Why?

[Eric_Boyer]

Like I told the other guy, do a littlle research before embarrasing yourself.

I've done a decades worth of research...and doing so has led me to the austrian school of economic thought.

[Rackat]

I've done a decades worth of research...and doing so has led me to the austrian school of economic thought.
I haven't done the research, but practical experience tells me that any time the government is involved, I am going to be out more of my hard earned cash.

[Eric_Boyer]

I haven't done the research, but practical experience tells me that any time the government is involved, I am going to be out more of my hard earned cash.

Agreed. The Austrian assertion is that everyone is better off in a mutually voluntary exchange.

[JBond]

I've done a decades worth of research...and doing so has led me to the austrian school of economic thought.

How many times do we have to go down this long and expensive road? This was completely the fault of congress. Where was the oversight? Who got rich? Follow the money. I understand many banks are tied to Fannie and Freddie but giving the same morons who screwed it up in the first place 200 billion dollars is insanity.

A much more financially sound idea would to chop up Fannie and Freddie and allow private industry to replace them. There are ways of doing this that will not destroy the banking system. It will be hard and take time. Doing the same thing over and over and expecting different results is insanity.

I heard a great line on radio today. They said Fannie and Freddie wanted to privatize the profits but socialize the risk and debt. Sound like most government programs.

I wonder what China thinks about the 10% of Fannie and Freddie they own being taken over by th US government? I wonder if they will be pissed at losing billions?

[jrumann59]

Those two organizations had private profits, but now that things are in the tank they get to socialize their losses, ***. It was the dumbest thing to do by this gov't, bush should have stuck to his guns and vetoed the bill. I am starting to think that is one thing in his jumbled vocabulary he can't say or spell even remotely close.

[Sasquatch]

Let Fannie and Freddie die.

I just purchased a few thousand shares of financial stocks last week. I'm very happy with the decision.

:)

[Maikeru-sama]

Like I stated, I recently lost my job working for a one of the largest Mortgage Companies in the United States.

I would have loved to see the Government bail our company out.

[jrumann59]

Like I stated, I recently lost my job working for a one of the largest Mortgage Companies in the United States.

I would have loved to see the Government bail our company out.

heh...nevermind

[Chinfu]

Why not bail out the people who are defaulting on the loans? Because they aren't represented by the gov't, only the rich. Ridiculous move, people are only seeing what is happening right in front of there face forget 10 years from now.

I'm not saying let them sink but just giving them billions of OUR tax dollars for poor business practices is hardly my idea of capitalism. They got greedy and we are gonna pay for those mistakes.

[burmafrd]

Well lets see. Just about all so called financial experts say that not only was it a good idea but needed to be done. And
yet some co called experts here say they are all wrong.

Whoopie.

My point was that IF the financial sector was not as weak as it is NOW then maybe letting them go under might have been OK.

BUT NOT NOW.

But I guess thats a little too hard for some people to figure it out.

[Chinfu]

Why not help the person defaulting on the loan that way you help them keep there house and mortgage company gets paid? Either way you are propping up the market but at least you are helping someone other than the rich. They are just as much to blame as the person taking out the loan, they were considered high risk for a reason. It's like gambling with someone elses money, you've got nothing to lose.

Or is that too hard to figure out?

[jrumann59]

Why not bail out the people who are defaulting on the loans? Because they aren't represented by the gov't, only the rich. Ridiculous move, people are only seeing what is happening right in front of there face forget 10 years from now.

I'm not saying let them sink but just giving them billions of OUR tax dollars for poor business practices is hardly my idea of capitalism. They got greedy and we are gonna pay for those mistakes.

Because someone has to learn a lesson, if you bail out the consumer you bail out the banks and everyone is happy if you bail out the banks, the consumer suffers and therefore learns the lesson, never spend more than you can afford.

[BrAinPaiNt]

http://www.youtube.com/watch?v=VP5zBij2tWA

[JBond]

Well lets see. Just about all so called financial experts say that not only was it a good idea but needed to be done. And
yet some co called experts here say they are all wrong.

Whoopie.

My point was that IF the financial sector was not as weak as it is NOW then maybe letting them go under might have been OK.

BUT NOT NOW.

But I guess thats a little too hard for some people to figure it out.

Wrong! Wrong! Wrong! Why do you want to continue with the status quo? It is not working. Hello? Anyone there? Their business model is broken, yet you want to dump 200 billion dollars into it. Most experts believe this will only help in the very short term. How much do we spend next year? 300 billion? You probably believe social security is a sound financial plan. Can you balance a check book? You still have not answered why it is good to spend my money on a failed idea. Because you cant. Maybe you are a lobbyist? Why are you against reform? 175 million paid to lobbyist. That is why Fannie and Freddie are still alive. It's real simple. But you keep on with your indefensible position as the government continues to screw us. I'm for fixing the problem, not throwing money at it. Government is the problem not the solution. If these guys in congress are so smart why did they allow this to happen in the first place? Now you trust them to "fix it". Naive, Very naive.

http://money.cnn.com/2008/09/08/news/companies/fan_fred_buying/?postversion=2008090908

NEW YORK (CNN) -- When it came to buying influence in Washington, Freddie Mac and Fannie Mae were among Corporate America's biggest spenders.
The two mortgage giants paid $174 million to lobbyists over the past ten years to ensure the political climate would remain friendly to growing the mortgage business - even as the housing bubble began showing signs of bursting, according to a report by the Center for Responsive Politics, a watchdog group.
"They tied up almost every lobbying firm in Washington, whether they used them or not, over the past several years," said Joshua Rosner, a financial analyst with Graham Fisher & Co. and long-time critic of both companies.
Freddie Mac (FRE (http://money.cnn.com/quote/quote.html?symb=FRE&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/3018.html?source=story_f500_link)) spent over $94.8-million on lobbyists since 1998, making it the nation's 12th-largest lobbying client, while Fannie Mae (FNM (http://money.cnn.com/quote/quote.html?symb=FNM&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2434.html?source=story_f500_link)) bought $79.5-million of influence, the 20th biggest spender, according to the Center for Responsive Politics.
"They wanted to fend off regulation of their enterprises," said Massie Ritsch of the Center.
Until recent months, Fannie Mae and Freddie Mac largely succeeded in that effort - functioning with relatively little oversight as they aggressively grew their portfolio of mortgages to try to increase earnings.
Campaign contributions bought influence as well, including donations to the presidential candidates.
Sen. Barack Obama is the No. 3 recipient of Fannie and Freddie campaign dollars, having collected $123,000 from the companies since he first ran for the Senate in 2004, according to the Federal Election Commission and the Center for Responsive Politics.
The former chief executive of Fannie Mae, James Johnson, was the original head of Obama's vice presidential search team. Johnson resigned from Obama's campaign amid controversy over discounted home loans he had received.
Sen. John McCain has received $19,000 from the two companies in the past ten years.
His campaign manager, Rick Davis, formerly led the Homeownership Alliance, an advocacy group for Fannie Mae and Freddie Mac's mortgage businesses.
"We had the Keating Five," said Rosner, referring to McCain and four other senators who had supported the head of the failed Lincoln Savings and Loan Association nearly 20 years ago.
"This is closer to the Keating 535," added Rosner referring to all members of Congress. "Those legislators who have cost shareholders, preferred shareholders and taxpayers potentially hundreds of billions of dollars, I think we ought to hold them accountable."
Regulators, in taking over Fannie Mae and Freddie Mac, are suspending the companies' efforts to buy influence.
"All political activities, including all lobbying, will be halted immediately," said James Lockhart, head of the new Federal Housing Finance Agency that will oversee the companies.
While Fannie and Freddie are now in a government conservatorship, it will remain for Congress to decide the companies' ultimate fate.
One of the few critics of Fannie and Freddie, Sen. Jim DeMint, R-S.C., called Monday for the mortgage companies to be restructured and lose their government backing.
"For years, these two mortgage giants have used taxpayer guarantees to gain enormous profits and lobby Congress to look the other way while they failed homeowners," said DeMint.
"These mortgage giants must be broken up and forced to survive in the marketplace without taxpayer guarantees," he added. "Allowing them to survive into the future with explicit government backing will only bring more harm to American homeowners and greater debt to American taxpayers." http://i.cdn.turner.com/money/images/bug.gif (http://money.cnn.com/2008/09/08/news/companies/fan_fred_buying/?postversion=2008090908#TOP)

[JBond]

Like I stated, I recently lost my job working for a one of the largest Mortgage Companies in the United States.

I would have loved to see the Government bail our company out.

I'm sorry to hear that. Hope everything is working out for you.

[WoodysGirl]

Like I stated, I recently lost my job working for a one of the largest Mortgage Companies in the United States.

I would have loved to see the Government bail our company out.Man, that really sucks. Sorry to hear that. Not to get too into your business, are you looking to stay in the industry or trying to find something different? I don't remember if you're a techie or not, but I do know some tech job sites besides monster and careerbuilder. If you're interested, I'll PM you the sites I've had to hit up.

Why not bail out the people who are defaulting on the loans? Because they aren't represented by the gov't, only the rich. Ridiculous move, people are only seeing what is happening right in front of there face forget 10 years from now.

I'm not saying let them sink but just giving them billions of OUR tax dollars for poor business practices is hardly my idea of capitalism. They got greedy and we are gonna pay for those mistakes.I believe they've already voted in a housing bailout for consumers. Just happened a month or so ago.

[Maikeru-sama]

Man, that really sucks. Sorry to hear that. Not to get too into your business, are you looking to stay in the industry or trying to find something different? I don't remember if you're a techie or not, but I do know some tech job sites besides monster and careerbuilder. If you're interested, I'll PM you the sites I've had to hit up.

I believe they've already voted in a housing bailout for consumers. Just happened a month or so ago.

Yeah, I am a Software Developer. I actually found a job about 3 weeks after being laid off, but my supervisor was a schizo, ****** bag and the job description was a complete lie, so I decided to bolt after 2 1/2 weeks.

I am a pretty strong saver, so I had a fairly decent amount of money in the bank, so I am fine. I have been made 2 offers, but I am hoping to hear about one job in particular today or tomorrow, but it has been about a 2 week process so I am doubtful.

Never been laid off before, but I know one thing, Unemployment Insurance in Texas is an absolute joke, good thing I didn't count on it.

Also, my old company is having 3 rounds of layoffs, the one in July, one in October and the last one on January 31 and alot of them are not in Technology and will have a hard time finding something as most are tied to the Mortgage Industry.

[burmafrd]

There are a lot of people to blame for this mess. Greenspan, Clinton Administration, Republican Congress, Democrat Congress and the Bush Administration. They ALL signed off on the easy credit loosened rules that started in the 90's and kept on going untill just recently.

That being said some of you goofballs are as usual blind as bats.
Do some research on the current health of the global banking system.
And what COULD happen if both of them were allowed to go belly up and starting defaults and other bad happenings.

Maybe nothing.

MAYBE NOT.

This is NOT a time to take chances.

[WoodysGirl]

Yeah, I am a Software Developer. I actually found a job about 3 weeks after being laid off, but my supervisor was a schizo, ****** bag and the job description was a complete lie, so I decided to bolt after 2 1/2 weeks.

I am a pretty strong saver, so I had a fairly decent amount of money in the bank, so I am fine. I have been made 2 offers, but I am hoping to hear about one job in particular today or tomorrow, but it has been about a 2 week process so I am doubtful.

Never been laid off before, but I know one thing, Unemployment Insurance in Texas is an absolute joke, good thing I didn't count on it.

Also, my old company is having 3 rounds of layoffs, the one in July, one in October and the last one on January 31 and alot of them are not in Technology and will have a hard time finding something as most are tied to the Mortgage Industry.Well that's good your getting some bites out there. I hope you get the call your looking for. I know how that is waiting for those calls. I've been laid off a couple times. Once when the Dot.com went bust. Fun times trying to find a job back then. :) Like you, I'd saved, so it most definitely saved me cuz unemployment sucks major. When you're a professional you might get more than a fast food worker, but it's certainly not anywhere close to enough to maintain.

Good luck with your search, tho. Job hunting can be a pain. Putting on the good suit in 90 degree weather (Texas), fake smiling to people (recruiters) so they'll think you're a strong enough candidate to send you to that 2nd interview (hiring company). Ugh.

Anyway, I'll shoot you a PM to this one site, I've had some success with in the past. I used to hate it tho, it seemed all the good jobs were in Dallas vs Houston and I wasn't really trying to move back up there.

[WoodysGirl]

There are a lot of people to blame for this mess. Greenspan, Clinton Administration, Republican Congress, Democrat Congress and the Bush Administration. They ALL signed off on the easy credit loosened rules that started in the 90's and kept on going untill just recently.

That being said some of you goofballs are as usual blind as bats.
Do some research on the current health of the global banking system.
And what COULD happen if both of them were allowed to go belly up and starting defaults and other bad happenings.

Maybe nothing.

MAYBE NOT.

This is NOT a time to take chances.You really need to lay off the name calling... Seriously.

And maybe take a look in the mirror, too. :cool:

[Chinfu]

There are a lot of people to blame for this mess. Greenspan, Clinton Administration, Republican Congress, Democrat Congress and the Bush Administration. They ALL signed off on the easy credit loosened rules that started in the 90's and kept on going untill just recently.

That being said some of you goofballs are as usual blind as bats.
Do some research on the current health of the global banking system.
And what COULD happen if both of them were allowed to go belly up and starting defaults and other bad happenings.

Maybe nothing.

MAYBE NOT.

This is NOT a time to take chances.


You've yet to make a single point. Just, you people are blind, do some research blah blah blah. Answer some of the questions that people are asking and make it a discussion. Please, enlighten me since I'm so blind, dumb and whatever else you've said.

[Maikeru-sama]

You really need to lay off the name calling... Seriously.

And maybe take a look in the mirror, too. :cool:

:laugh2:

[Maikeru-sama]

Well that's good your getting some bites out there. I hope you get the call your looking for. I know how that is waiting for those calls. I've been laid off a couple times. Once when the Dot.com went bust. Fun times trying to find a job back then. :) Like you, I'd saved, so it most definitely saved me cuz unemployment sucks major. When you're a professional you might get more than a fast food worker, but it's certainly not anywhere close to enough to maintain.

Good luck with your search, tho. Job hunting can be a pain. Putting on the good suit in 90 degree weather (Texas), fake smiling to people (recruiters) so they'll think you're a strong enough candidate to send you to that 2nd interview (hiring company). Ugh.

Anyway, I'll shoot you a PM to this one site, I've had some success with in the past. I used to hate it tho, it seemed all the good jobs were in Dallas vs Houston and I wasn't really trying to move back up there.

Yep, one of the jobs I am considering will be working for a member of this site, even though he doesn't post here anymore because he has his own site now. So that would be cool.

I feel that the company that I want to work for is just jerking me around at this point. I have had two interviews and over a span of 2 weeks, supposedly I was going to hear something yesterday. I bypassed the recruiter because he was offering no information whatsoever, so I called the company directly Friday and he said I would hear something Monday.

The worst thing about being laid off, besides the boredom is daytime television. That is why I just started marathoning the Sopranos :D .

[Vintage]

I've done a decades worth of research...and doing so has led me to the austrian school of economic thought.

You've got to understand burm.

He's BIG on central gov't planning of economies.

He's a commie in hiding, basically.

Pinko Burm-o.

[JBond]

The people behind the fatally flawed companies.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aSlTm4LNniCk&refer=home



`Doomed' Fannie, Freddie Boards of Stars Failed to Stop Slide
By Ian Katz
Sept. 9 (Bloomberg) -- Not even a former FBI director, a Massachusetts Institute of Technology finance professor and the onetime chief U.S. accounting rule maker could keep Fannie Mae (http://www.bloomberg.com/apps/quote?ticker=FNM%3AUS) and Freddie Mac (http://www.bloomberg.com/apps/quote?ticker=FRE%3AUS) from falling into the arms of the U.S. government.
The boards oversaw the companies' slide as the U.S. housing market suffered its worst slump since the Great Depression. It wasn't for a lack of talent. Fannie's directors include former FBI Director Louis Freeh (http://search.bloomberg.com/search?q=Louis+Freeh&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) and former Federal Reserve Bank of Cleveland President Karen Horn (http://search.bloomberg.com/search?q=Karen+Horn&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1). Freddie's board has MIT finance professor Stephen Ross (http://search.bloomberg.com/search?q=Stephen+Ross&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) and former J.P. Morgan Chase & Co. (http://www.bloomberg.com/apps/quote?ticker=JPM%3AUS) and Merrill Lynch & Co. vice chairmen.
The dual mission of Fannie and Freddie, the biggest U.S. mortgage-finance firms, to deliver profits to shareholders while promoting affordable housing as government-sponsored entities may have limited their directors' ability to stabilize the companies and contributed to the need for the U.S. government takeover.
``Under extreme pressure, the boards couldn't serve two masters at one time,'' Richard Ferlauto (http://search.bloomberg.com/search?q=Richard+Ferlauto&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), director of corporate governance at the American Federation of State, County and Municipal Employees (http://www.afscme.org/), said in an interview.
The objective of providing affordable housing isn't consistent with maximizing returns for shareholders, Ferlauto said. At the same time, risks the companies took to boost profits don't align with the companies' mission of serving the public.
`Flawed' Model
The ``inherent conflict and flawed business model'' of the corporate structure and the ``ongoing housing correction'' forced the government to act, Treasury Secretary Henry Paulson (http://search.bloomberg.com/search?q=Henry+Paulson&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) said Sept. 7. Management and the boards of directors ``are responsible for neither,'' Paulson, the former chief executive officer of Goldman Sachs Group Inc., said at a press conference in Washington announcing the takeovers.
Paulson and Federal Housing Finance Agency Director James Lockhart (http://search.bloomberg.com/search?q=James%0ALockhart&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) placed Freddie and Fannie in a government-operated conservatorship, ousting their CEOs and eliminating their dividends.
``There was a sense these companies were doomed to fail,'' said Nell Minow (http://search.bloomberg.com/search?q=Nell+Minow&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), editor of the Corporate Library (http://www.thecorporatelibrary.com/), a Portland, Maine-based corporate-governance research firm. Fannie, based in Washington, and Freddie, with its headquarters in McLean, Virginia, were ``trying to do mutually exclusive things.''
`Recipe for Catastrophe'
``They want to be a publicly traded company and be competitive,'' Minow said. ``But they arrived on third base and behaved like they hit a triple. That's a recipe for catastrophe.''
Fannie's board has been chaired since December 2004 by Stephen Ashley (http://search.bloomberg.com/search?q=Stephen+Ashley&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), CEO of Rochester, New York-based Ashley Group, which has real estate and investment companies. The board includes Dennis Beresford (http://search.bloomberg.com/search?q=Dennis+Beresford&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), former chairman of the Financial Accounting Standards Board (http://www.fasb.org/).
Ashley received $559,659 as chairman in 2007, according to Fannie's 2007 proxy statement. Eleven of the 13 board members received more than $140,000 in 2007, including cash and stock awards.
Freddie's board, which outgoing CEO and Chairman Richard Syron (http://search.bloomberg.com/search?q=Richard%0ASyron&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) chaired since December 2003, includes Geoffrey Boisi (http://search.bloomberg.com/search?q=Geoffrey+Boisi&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), former vice chairman at JPMorgan Chase & Co. (http://www.bloomberg.com/apps/quote?ticker=JPM%3AUS); Jerome Kenney (http://search.bloomberg.com/search?q=Jerome+Kenney&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), former Merrill Lynch & Co. vice chairman and William Lewis (http://search.bloomberg.com/search?q=William+Lewis&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), co- chairman of investment banking at Lazard Ltd.
Directors' Pay
Ten of the 12 board members in addition to Syron got more than $200,000 in 2007, according to Freddie's proxy (http://www.freddiemac.com/investors/pdffiles/proxy_042908.pdf) statement. Former Chairman Shaun O'Malley (http://search.bloomberg.com/search?q=Shaun+O%26%2339%3BMalley&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), who retired as a director this year, received $602,458 in 2007.
The boards might have been able to reduce the companies' risks even though they had little control over the mortgage market as it seized up in the past year, said Broc Romanek, editor of the TheCorporateCounsel.net Web site.
``They could -- and should -- have been doing something different to change the circumstances that led to this incredible collapse,'' Romanek said.
Syron could receive an exit package of $12 million to $14 million and departing Fannie CEO Daniel Mudd (http://search.bloomberg.com/search?q=Daniel+Mudd&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) may get $7 million to $9 million, said David Schmidt (http://search.bloomberg.com/search?q=David+Schmidt&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), a senior consultant for James F. Reda (http://search.bloomberg.com/search?q=James%0AF.+Reda&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) & Associates, a New York-based compensation consultant.
About $8.8 million of Syron's exit pay is cash in exchange for his forfeiting of equity grants. Syron and Mudd could end up accepting less money than they are contractually entitled to, Schmidt said.
`Real Culprits'
Michael Garland (http://search.bloomberg.com/search?q=Michael+Garland&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), director of value strategies for CtW Investment Group, which advises pension funds, said the ``real culprits deserving of taxpayer ire are the commercial and investment banks that peddled subprime and exotic mortgages.'' Fannie and Freddie were ``principally the victims of a mortgage crisis they did not create,'' he said.
Fannie and Freddie Mac came under greater regulatory scrutiny after accounting errors began surfacing in 2003. In April, former Fannie Mae CEO Franklin Raines (http://search.bloomberg.com/search?q=Fannie+Mae+CEO+Franklin+Raines&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) agreed to pay $24.7 million for his role in $6.3 billion of accounting errors.
The Office of Federal Housing Oversight sued Raines and two other executives over allegations they inflated earnings. Raines said he accepted ``accountability as the leader of Fannie Mae'' while not admitting any wrongdoing. Freddie Mac understated $5 billion of earnings from 2000 to 2002.
To contact the reporter on this story: Ian Katz (http://search.bloomberg.com/search?q=Ian+Katz&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1) in Washington at ikatz2@bloomberg.net (ikatz2@bloomberg.net).
Last Updated: September 9, 2008 10:12 EDT