Hey, great news, we’re paying out the nose to defend Fannie and Freddie
To the tune of more than $160 million worth of legal bills in civil lawsuits accusing the mortgage finance companies and former top brass of fraud. This from the New York Times:
The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.
…
It is typical for corporations to cover such fees unless an executive is found to be at fault. In this case, if the former executives are found liable, the government can try to recoup the costs, but that could prove challenging.
Since Fannie Mae and Freddie Mac were taken over by the government in September 2008, their losses stemming from bad loans have mounted, totaling about $150 billion in a recent reckoning. Because the financial regulatory overhaul passed last summer did not address how to resolve Fannie and Freddie, Congress is expected to take up that complex matter this year.
In the coming weeks, the Treasury Department is expected to publish a report outlining the administration’s recommendations regarding the future of the companies.
Glad to hear that’s all in good hands. Nothing to worry about there; move along, citizen, and keep paying those legal bills.
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