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Americans Cover Millions In Legal Bills For Fired Fannie And Freddie Execs

January 27, 2011 by  

Americans cover millions in legal bills for fired Fannie and Freddie execs  American taxpayers have unknowingly spent more than $160 million to help provide legal defense for former executives of mortgage lenders Fannie Mae and Freddie Mac, according to The New York Times.

Information about these costs was closely guarded until Representative Randy Neugebauer (R-Texas) requested the figures from the Federal Housing Finance Agency last year. The taxpayer-funded expenditures, which were released last week, show that about $132 million has been spent to defend Fannie Mae and its officials against various lawsuits and investigations.

In 2008, the Federal government took over Fannie and Freddie in the midst of the subprime lending crisis, which resulted in a sharp decline of the companies' stock market value. Former execs with both companies have since been barraged by lawsuits and probes regarding accounting irregularities that allegedly occurred in the years preceding the housing crisis.

"The question I think that doesn't pass the smell test is: Why are we paying the legal fees for former employees?" Neugebauer, who is now the chairman of the House Financial Services Committee, told FOX News. "What kind of litigation is pending that would cause us to think we need to continue to put taxpayers' money in legal fees for people that actually got fired?"

According to the news provider, the controversy comes just a few weeks before President Barack Obama's administration is set to present its future plans for overhauling Fannie and Freddie. 

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  • s c

    What a country. Only in a ‘progressive’ America could proven LOSERS somehow be “entitled” to have taxpayers foot their legal bills. Can someone please explain this latest version of Washingtonian insanity? Is there any chance that this is what Obummer means when he talks about investments or infrastructure improvements?

    • wandamurline

      While we are investigating this, why not investigate Barney Frank who was the perpetrator of Fannie and Freddie, protecting them until the very end, the person who would not regulate them as was asked by Pres. Bush four times over five years. And, while we are at it, let’s check again into Charles Rangel…it would seem he got spanked on the hand for what he previously was investigated for, but since then it has come up that he has been using his campaign PAC money to pay for his personal lawyers, that is a crime, and needs more than a hand spanking, and let’s not forget Maxine Waters, who fundled TARP money to her husband’s bank. These people also need to be carefully investigated and removed for their crimes.

      • franko35758

        love your thinking wandamurline. my thoughts exactly.after watching the youtube video’s, I think each one should be prosecuted.
        why can’t “we the people” bring charges on these idiot’s? have a great day

      • Ameribred1

        Spanking? How about wiring up the chair again?

        • http://?? Joe H.

          Ameribred1,
          nah, just an oak tree and a good stout hemp rope! It was good enough for our founders, it should be good enough for ALL our government crooks!!

      • BobbyB

        And let’s not forget Phil Graham (R) who repealed Glass Stegal in the middle of the night. The repeal of Glass Stegal is the biggest contributor to our economic dilemma. Clinton signed it in to law, but had the balls to admit it was a huge mistake. The “liar loans” that were made by every lender in the world were the next biggest cause.

    • 45caliber

      Surely you don’t think the government should have allowed those people to defend themselves! They might not have had enough money!

      Besides, if they had to defend themselves then Rangel should have done it too. And if he did it, then all the other Congressmen would also have to do it in turn. And that is one of their big perks – the ability to let us pay all their costs while they hire the most expensive lawyers and judges available to handle their cases. Surely you don’t want to cause all those Congressmen problems, do you? Just because they are guilty?

  • Robin from Arcadia, IN

    The corruption in our government runs so deep that if it all were exposed it wouldn’t be believable! Why do voters continue to elect people that are known to be abusing the system? Is there any chance that our government will ever get on track? Where are all the watchdog groups? Where is the main stream media? These things need to be brought to the attention of the public. We don’t want slanted views, just the facts!

    • wandamurline

      If you want to start cleaning up this mess, then get involved….get into your local tea party…we are putting the pressure on these people and we will clean them out. We hope to place at least 20 new senators into office in 2012 that are Democrats now with conservative, tea party candidates who have been vetted and have the same agenda as We the People…less government, Constitutional government, and protection of our freedoms and reducing the debt on our children and grandchildren. To go along with these, we will eliminate the RINOS (republicans in name only) who consistently vote against the people….like Snowe, Collins, Lugar and maybe even Scott Brown as we are watching him very closely. We want real representation in Washington, not a dog and pony show.

    • Dan Burke

      I think you are partially correct here. See, I think the problem for me is that I know they are corrupt. I believe Fannie Mae and Freddie Mac were corrupt GSEs. So why would the government cover up and defend former employees? It could be as simple that with all the Tea Party and conservative uprising in America that they feel they MUST keep us from learning the truth. Think of it, if the government did not defend these people, imagine all the evidence that would be gathered to prosecute them. Records from Fannie and Freddie might become publicly available, potentially proving that from the beginning these organizations were corrupt and delivering false promises. The biggest risk of all is that subpoenas could end up getting information into public hands that might prove that from the beginning that someone knew these loans would be bad and backfire on the very people they were being sold to. And even if it wasn’t that bad, imagine that there could still be a lot of incriminating evidence that could drag in many politicians that are more interested in their careers than doing what is right for America.

      • http://?? Joe H.

        Dan,
        I think their biggest concern is if they don’t defend them, then what do the defendants know that might come out about the other people in the government?!?!?!?!

  • Richard

    So now it is exposed, make them pick up the tab for their lack of ethics and if they cant maybe a little time in jail will reel them back into reality.

  • http://Kygatorfl@gmail.com Fred

    Sounds to me like we need to spend this money to put these scum bags in prison for life. Secondly, we need to repeal the Community Reinvestment Act of 1977, which led to this housing market crisis and the collapse of the economy. Then put Fannie and Freddie in private hands. This Community Reinvestment Act has got go or we’ll be in the same mess again, that is if we get out of the present one. Giving mortgages to anyone who can’t pay the loan back is about the dumbest thing our Government has ever done, and that says a lot considering what this bunch of dumbocrats since 06 have done to this country.

    • BobbyB

      I agree. However, only 34% of bad loans fell under CRA institutions. CRA held no sway with private mortgage lenders.

  • Joyce from Loris

    This is just one example of WHY the Government should stick to what it is SUPPOSE to do. There is no reason that the federal government should be involved in housing to start with. And they wonder why we are $14 trillion in debt??? Well, this is just one, small reason. The federal government needs to be CUT IN HALF. The states should be responsible for their own government, let the feds protect us. Start with the open border to the south. What they feds are suppose to be doing, they aren’t, and what they aren’t suppose to be doing, they ARE. This is madness, and I sometimes wonder if there is any fixing it. Yes, I am involved heavily with the tea party groups, but sometimes you can still get frustrated.

    • 45caliber

      At least in half. I’d go for even more myself.

  • DafusJay

    ANOTHER WAY TO SAVE MONEY AND QUIT FEEDING THE COFFERS OF THE LAW
    FIRMS TO DEFEND THEM, WHICH PROVES TO BE ENDLESS.
    CLOSE DOWN BOTH FANNIE AND FREDDIE (BANKRUPT THEM NOW, SAVE MONEY)AND TURN THESE FUNCTIONS OVER TO PRIVATE INDUSTRY, WHICH WILL DECREASE THE SIZE OF GOVERNMENT, SAVE BILLIONS AND CREATE PRIVATE SECTOR JOBS WHICH WILL REDUCE THE GOVERNMENT COST FOR ALL THOSE BENEFITS, PERKS AND LUCRATIVE RETIREMENTS.
    THIS IS JUST ANOTHER “BLACK HOLE”, WHICH PROVES TO BE GOBBLING UP TAX PAYERS MONEY BY THE BILLIONS,JUST TO CREATE BIG GOVERNMENT AND BENEFIT THE LAWYERS.
    AND “ANYONE” FOUND GUILTY OF ANY WRONG DOING, BRING THEM TO JUSTICE TO STOP THIS GREED, CORRUPTION AND SIN AGAINST THE PEOPLE OF THE UNITED STATES OF AMERICA.

  • http://? Karel Eekels

    What are the next right steps and what type of action is just? “De-throne” Barney Franks and the likes of Christopher Dodd, the architects/engineers of these programs. (take all their privileges away). Putting these type of leaders in jail represents only another tax burden.

  • patrick

    I, my friends, am a victim of the scam mortgage game crimes! Let me tell you all, IT WAS A SCAM big time. My wife and I applied for a $ 1/2 million dollar loan for a new condo, we thought no way would we qualify? Well guess what? we were approved!, to our amazment. It was not until 2 years later that we found out how this scam took everything we worked all our life for and was lost. Every person involved with the tranaction made big bucks as the Gov’t said it’s ok, this is a “stated income loan” … meaning NOBODY checked or verified the application and or the finacial information. We asked our loan officer how did we qualify and she said our assets. Again, two years later we found out she lied and used fraudulant figures on the application so she made us look good in the money dept. Now we have nothing left, lost two of houses. all our savings, and a paid off rental now has a big mortgage on it. So thanks Barney and Dodd and the liberal democrats.

    • ValDM

      You were hardly a victim. If you knew you couldn’t pay back 1/2 million, why did you even go there? The problem, as I see it, is that too many people got “big eyes” over property, much the same as helping yourself to extra food on Thanksgiving because “your eyes were bigger than your stomach”. Nobody twisted your arm and made you apply/sign those papers. Did you NEED a condo that cost that much????

      • libertytrain

        Val, I have to agree with you on that one.

        • eddie47d

          Who’s to say that Patricks’ mortgage brokers were Democrats? I’ve known too many Mortgage handlers who were and are Republicans. That includes my sister in law. Now the money spent on the defense of those corporate crooks is mind blowing. We have been taken again.

    • Joyce from Loris

      Patrick, I hate to say it, but you sound like one of those people who want to blame others for your own mistakes. I can’t believe that, even after you and your wife sat in amazement that you even received the loan and had to ask “how did we qualify?”, you would blame ANYONE else. This is the mentality of so many in this nation. I do not have a mortgage, as I paid cash for my farm. My Daddy taught me not to buy anything that I don’t have the money for, because no one is going to take care of me and if something happened that I couldn’t make the payments, I would lose it all, including all the money I had already paid in the form of payments. But YOU KNEW! You knew that you should not have qualified, so did your wife, and you went anyway. Well, this one is all on you!

    • BobbyB

      Yeah, it’s their fault YOU screwed up. For Christ sakes, everyone wants to blame Dodd, Raines, CRA, whoever, but the bottom line is this. You and only you are responsible unless it was a case of outright fraud, of which there were many.
      If you want to blame anyone, blame GWB. He was the one that wanted us to be an “Ownership Society”. He felt if everyone owned their homes, they would be better citizens. Of course that, and about every other thing he thought turned out to be bass akwards.

  • Kris

    Considering that Barney Frank’s ex girlfriend left with a 90 million dollar package, why are we paying anything for his legal problem? Let Barney pay for it or better yet, let him use the 90 million he stole from the taxpayers!

    • http://charter howe

      I guess I am stunned by the fact that Barney Franks had a girfriend, since he has been living with a much younger gay stud for quite some time. Barney is unashamedly a self proclaimed gay which has been making him the butt of backroom jokes in Congress and elsewhere. This clown had oversight of Fannie and Freddie for many years before Obama was elected to office and he and Dodd stated in Congressional hearings and on T.V news years ago that Fannie and Freddie were in good shape and did not need regulation or oversight and in his words there was no need to legislate oversight on these too big to fail housing corporations. The rest is history. I am also very shocked at the fact that Barney’s constituents are very supportive of him. This creep is one of the dirty dozen socialist democrats that needs to be retired before he can do any more damage with his imbecilic ideology.

      • Joyce from Loris

        Howe, Kris was being sarcastic. The “girlfriend” is the guy that was over Fannie Mae, and was paid $90 million. He was a homosexual as well!

  • http://personalliberty.com RandyH

    Well heck, slick willie clinton ordered them to back loans they knew would never be paid back, so that was probably part of the agreement.

  • Ms. T

    I like that idea of repealing the 1977 Community Re-investment Act… Also… How about a congressional rule that if you are found guilty of misbehaving while in congress or the senate… you don’t get to run again… If you have any more than traffic tickets, you can’t run for office at all… In addition to term limits this would get rid of a lot of the trouble makers… If the issues involve taxpayer money, you have to pay it ALL back, including interest and penalties… If you owe the IRS money, you can’t work for the government – period.

    As Fannie and Freddie are re-organized, the millions in legal bills need to be added to the perpetrators tax bills and re-paid. You know, a little tort reform would probably fix this problem, but that might be too easy for these clowns.

    • http://?? Joe H.

      Ms. T,
      you mean like a certain senator from Ohio that was caught driving the wrong way drunk on a major highway and was let go??? Or the DUFUS that bankrupted Cleveland Ohio and now is sueing the congressional snackbar for a pit in a wrap and letting the people pay the fees??? They are all over the US and I just mentioned a couple from my state!!

  • http://com i41

    Just more beltway idoits CYA ing. Rangel sjould have been sent to the crow bar hotel. Whorehound Clinton cost million to defend his dick around. Every time there is a panal to check out facts on anything it cost millions, as when the dog and pony show of what oil companies were charging for fuel several years ago. Any dirt bag that is out of office and gets asked to be on a commission get paid extra and raises their retirement pay. Now that the unemployment rate just climbed again, when is this simple minded over educated Soros Sociallist bastards going to wake up and cut all the impedements to creating jobs.The jug eared marxist muslim moron in Cheif master plan to destroy USA is coming along as Nazi Soros and dombocraps have always dreamed of.

  • Buckeye

    They seem honest when we elect them but after they accept that first plain envelope with $100,000.00 in it then they are hooked and we the people never exist again just the people with the money.

  • RobertLfromCt

    This may be ugly but is very relevant. Many dems, especially blacks, took great exception to the criticism as Fannie was headed by a black, Franklin Raines (pulled in 90 mil in six years). It was well known that hundreds of thousands of conventionally unqualified borrowers (mostly minority) were getting loans so the legitimate scrutiny was criticized as being racially motivated and as usual, the repubs let up. The entire economic crisis in ’08 started right here. Fannie + Freddie then laid off this loans to the private sector and the fun began.

    • BobbyB

      Oh Boy,
      Talk about the race card. This is all right out of Limbaugh 101. The fact is EVERY LENDER was making bogus loans. WAMU (was owned by white guys) had an 83% fraud rate in ONE county in CA alone. Lenders couldn’t make enough loans as they had to keep feeding the “Collateralized Debt Obligations”, or CDOs.

      Yes Fannie and Freddie were big players but pale in comparison to private sector fraud.

  • chuckb

    robertlfromct

    you hit the nail on the head. raines walked away with millions and most of it from illegal dealing, such as you mentioned. it’s time people get over the slave syndrom and start making people account for their actions regardless of their color such as charley rangel, maxine waters, franklin raines and many more. this has been going on for years.
    barney frank, dodd and raines would be good for the start.

  • 45caliber

    Surely you didn’t expect those execs to pay the costs out of their own pockets, did you? It might have used up a lot of what they stole.

    • http://?? Joe H.

      45caliber,
      If I had my way, they would not only pay the fees, they would pay back what they stole. INCLUDING the wages they stole as well!!

  • http://com i41

    Kris don’t forget all the sweetheart loans to Dork Dodd and Dorgan. Or Daschle building his millioon + dollar shack when he was booted and became a Wall Street Board member lobbyest. Between the dinks like Blarney and his rump rangers of the beltway, meddling in every facet of life. Along with the close ties to George Soros with all democrats crooks, these slimy pukes will get away with their millions.

  • http://non don b

    revolution might be the only answer, unfortunately. when people in power become too arrogant, lazy, complacent, whatever you want to call it, and it deeply affects the people’s ability to live their lives, revolution is the last, bloodiest, necessary possibility. the civil war happened because the wealthy did not want to give up free labor, and instead they lost everything to armed conflict. history repeats this folly over, and over, and over. people never learn until their relatives are burying them.

    • DOGS FIGHT

      The mechanics of a civil war would be somewhat different now. Are only hope is for the military to split as it did in the first civil war. Afterall, one barrage with chemical warhead artillerly will effectively eliminate thousands of at best sub machine gun armed red necks in the woods…. The military sides with the people or it sides with the Pentagon. Bottom line. Of course even if, in some hypotethical civil war 2 scenario, the military mostly sided with the people and won, a foreign country might mop up whats left of us… At that point, nukes would be the only answer assumming we had any control over them….

  • DOGS FIGHT

    Don’t you get it? Socialism is not about spreading the wealth or making everyone equal. Hell, if socialism actually did what it said in theory, I may not necessarily be opposed to it on its face. Socialism is about making a sub section of extremely wealthy and powerful individuals EVEN MORE WEALTHY AND POWERFUL. Socialism is all about consolidating and controlling the wealth and not about actually spreading the wealth beyond what “crumbs” are “spread” your way to keep you from rioting in desperation.

    The elitists such as these execs, get bailed out. If you or me did 1/10000 of what these folks did, we would be sent to jail with the key thrown out. Socialism has nothing to do with spreading the wealth or making us all equal in “power”. WAKE UP

    • Richard2687

      Amen. Anyone remember Orwell’s book Animal Farm? The elites were just created “more equal” than the rest of us.

    • BobbyB

      Sorry,

      That Fascisim.

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