The Federal Housing Finance Agency (FHFA) decided Wednesday to increase compensation for CEOs at Fannie Mae and Freddie Mac – government sponsored enterprises (GSEs).
Sen. Bob Corker (R-TN), is a member of the Senate Banking Committee. He says:
I understand that Fannie Mae and Freddie Mac want to offer competitive salary and bonus packages to attract and retain talent, but because it appears that FHFA is ready to unilaterally drive the GSEs back to the failed model of private gains and public losses, this decision is just one more reason Congress must act to reform our housing finance system.
According to Corker’s press release, the FHFA Director lifted compensation for CEOs from $600,000 to $4,000,000.
In 2008 both Fannie Mae and Freddie Mac were given a $188 billion taxpayer bailout.
Corker’s statement argues that, because of the bailout, the private market has decreased substantially and almost all loans now come with a government guarantee.
“Despite this unsustainable situation, there still has been no real reform to our housing finance system,” Corker’s release stated.
A FHFA stress test from April predicts that Fannie Mae and Freddie Mac could require another bailout – this time $157 billion tax dollars to keep them in business during a future financial crisis.
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