Mortgage Giants Leave Legal Bills to the Taxpayers

[Jroc]

Franklin Raines, former chief executive of Fannie Mae , left, and Timothy Howard, former chief financial officer, in 2004.



Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.


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.



Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.

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.

http://www.nytimes.com/2011/01/24/b...l=1&adxnnlx=1295870769-g82j7bxAiZQfJAGOVuANkg

 

[shintao]

The bottom line is that all corporate losses associated with housing will eventually be paid by the US taxpayer, and that will be in the hundreds of billions, not millions.

 

[herceliaL]

You're right shintao.