Forum Post: Fannie CFO's Signing Bonus: $1.7M.......
Posted 12 years ago on Nov. 16, 2011, 10:33 a.m. EST by progmarx
(66)
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House Republicans are pointing out that Fannie Mae’s new chief financial officer shares something in common with a newly drafted pro football player — both landed signing bonuses.
Susan McFarland received $1.7 million for joining the mortgage giant that continues to lose billions of dollars after three years in government conservatorship, according to a draft report from the House Oversight and Government Reform Committee, which is holding a hearing into compensation practices at Fannie Mae and Freddie Mac Wednesday.
Fannie provided the sign-on bonus to offset compensation McFarland forfeited by leaving an executive position at Capital One, according to a Securities and Exchange Commission filing in June. In addition to the signing bonus, McFarland got a compensation package worth as much as $3.2 million.
http://nation.foxnews.com/fannie-mae/2011/11/16/fannie-cfos-signing-bonus-17m
GSE were probably the worst idea the GOP has come up with. Fanny and Freddy were nice little agencies that helped the less fortunate buy housing with government aid ----------then we turned them into Frankenstein monsters where the CEO's could make a fortune and the taxpayer was on the hook if things went bad. I know fannie is a mess but I can't help thinking that we could have spent that 1.7 million on salaries for a whole economic team that woould probly do a better job. No problem for Mc'Farland I'm sure she wrote herself a nice golden parachute in case she can't fix up this mess.
That the GOP came up with?
"The Federal National Mortgage Association (FNMA), colloquially known as Fannie Mae, was established in 1938 by amendments to the National Housing Act[5] after the Great Depression as part of Franklin Delano Roosevelt's New Deal."
lol
in 1968 Fannie became a private corporation and a publicly financed institution in other words CEO make the profit in the good times and taxpayer's are on the hook when it goes bad that would be the Frankenstein monster I was referring to. and yes it was probly a GOP idea to privatize but since they hate to loose money have us pay when it goes bad. Not capitalism , corporate welfare. Privitize the profits and make the losses pubic. "From 1938 to 1968, the Federal National Mortgage Association (Fannie Mae) was the sole institution that bought mortgages from depository institutions, principally savings and loan associations, which encouraged more mortgage lending and effectively insured the value of mortgages by the US government. In 1968, Fannie Mae split into a private corporation and a publicly financed institution. The private corporation was still called Fannie Mae and its charter continued to support the purchase of mortgages from savings and loan associations and other depository institutions, but without an explicit insurance policy that guaranteed the value of the mortgages. The publicly financed institution was named the Government National Mortgage Association (Ginnie Mae) and it explicitly guaranteed the repayments of securities backed by mortgages made to government employees or veterans (the mortgages themselves were also guaranteed by other government organizations). To provide competition for the newly private Fannie Mae and to further increase the availability of funds to finance mortgages and home ownership, Congress then established the Federal Home Loan Mortgage Corporation (Freddie Mac) as a private corporation through the Emergency Home Finance Act of 1970. The charter of Freddie Mac was essentially the same as Fannie Mae's newly private charter: to expand the secondary market for mortgages and mortgage backed securities by buying mortgages made by savings and loan associations and other depository institutions.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") revised and standardized the regulation of both Fannie Mae and Freddie Mac. Prior to this act, Freddie Mac was owned by the Federal Home Loan Bank System and governed by the Federal Home Loan Bank Board, which was reorganized into the Office of Thrift Supervision by the Act. The Act severed Freddie Mac's ties to the Federal Home Loan Bank System, created an 18-member board of directors, and subjected it to oversight by the U.S. Department of Housing and Urban Development (HUD).
In 1995, Freddie Mac began receiving affordable housing credit for buying subprime securities, and by 2004, HUD suggested the company was lagging behind and should "do more."[12]
Freddie Mac was put under a conservatorship of the U.S. Federal government on Sunday, September 7, 2008.
I'm well aware of the history of FNMA and GNMA. None of which suggests that it was something that "...the GOP came up with."
1968 was Nixon ,sorry but "privatizing" is a right wing ideal, especially if they can make the liabilities public
Wrong again. 1968 was Johnson. Nixon didn't take office until 1/1969. Sorry, but you're letting your own very obvious biases get in the way of fact.
"During the Great Depression, as borrowers defaulted on mortgages en masse and banks found themselves strapped for cash, President Franklin D. Roosevelt and Congress created Fannie Mae in 1938 in order to buy mortgages from lenders, freeing up capital that could go to other borrowers. Although Fannie Mae began with just $1 billion in purchasing power, the agency helped usher in a new generation of American home ownership, paving the way for banks to loan money to low- and middle-income buyers who otherwise might not have been considered creditworthy. Fannie Mae grew so large over the years that in 1968, with the pressures of the Vietnam War straining the national budget, President Lyndon Johnson took Fannie Mae's debt portfolio off the government balance sheet; Fannie Mae was converted into a publicly traded company owned by investors."
OK you win and your right I despise the GOP for their pandering to the wealthy---------I'm just totally P**d of at the dems for their capitulation to the GOP All in all it's campaign finance that needs to change so that government can represent to people and not just the lobbyists bosses.
Yeah but this is FAUX news,these are all just lies.
[Removed]
Lol that's right,ignore facts that you don't like.
Capital 1 sends me credit card applications.
Of subprime loans.
Fannie set subprime up.
The poor got loans and can't pay.
Houses foreclose
You forgot this part all the banks create complex derivatives based on these loans . the more loans they sell the more money they can borrow because the rating agencies lie and rate these products AAA since they take a cut from every mortgage they really don't care who they give one to. AIG writes Credit Default Swaps to insure these mortgage derivative products but it's not regulated like insurance because it's called a swap. Insurance requires money put away to cover payouts, unregulated Credit defaults do not .AIG made 100 to 1 bets that house prices would never go down and had no money to pay up when those bets went bad, so the taxpayer ends up on the hook for 33 billion. Guess who one of the main counter parties to the AIG swap was ? you guessed it Goldman Saks -----------with Paulson an ex Goldman guy in the white house The taxpayers could have paid off every foreclosure in this country for about on tenth of what it cost to bail the banks out of the mess they got themselves in. Do your homework !!!!! turn off fox news.
I have to wonder why the banks were bailed out but the people were not
Because of the leverage. Seriously. A bank has to have a certain amount of assets held as collateral. They use US government bonds and were using mortgage backed securities. Then they are allowed to borrow and lend way beyond that amount. For a while I think the leverage they were allowed to use was 6X but just before the crisis it was at 30X. Lets say I'm a bank and have a $1000 gov bond to use for collateral now I can borrow $ 30,000 more to loan out for a mortgage. If the price of the house drops to $29,000 I'm in big trouble. If it drops to 28,000 I'm insolvent and need a bailout. Now compound this with the fact that they were using these POS mortgage bonds as collateral as well and multiply it by 10's of thousands and you can see where the trouble came from. If the banks became insolvent there would have been bank runs and no bank has it's depositors money sitting there in cash. Our deposits are insured by the FDIC meaning the taxpayer so we would have had to pay up no matter what or just let everybody loose all their bank deposits.It sucks I know and it was caused by deregulation and excessive leverage. The problem now is America was running on that leveraged loan money(since we gave up manufacturing) so I'm not sure how we get out of this mess. I do know I want what money I can make, taken better care of in the future.
Thank You you are right on 100%!
"Fannie provided the sign-on bonus to offset compensation McFarland forfeited by leaving an executive position at Capital One,"
This is the revolving door described in detail in Wildfire:The Legislation that Ignited the Great Recession. Give it a read if you haven't yet. Corruption is slowly destroying America.
"Susan McFarland received $1.7 million for joining the mortgage giant that continues to lose billions of dollars".
pretty soon they will have printed too much money and it will all be worthless- we'll be seeing new states with new currencies, new goon squads with different leaders