How much is too much for taxpayers to pay to defend top execs at mortgage-finance companies against fraud charges? At Congress’s request, Fannie Mae, Freddie Mac, and their regulator revealed the closely guarded sum: $160 million. The bulk of that, $132 million, went to defend Fannie Mae officials from securities lawsuits and government investigations into accounting irregularities that happened years before the subprime lending crisis blew up. Complicating matters is the fact that since the government took over the companies, the Federal Housing Finance Agency has been put in charge of acting as their conservator and trying to keep the company’s assets on behalf of taxpayers. Typically corporations cover legal fees unless an executive is found liable, but the government will have a hard time recouping costs in this case. If your guess was upwards of $160 million, not to worry, the legal battles show no signs of stopping. Of course that’s nothing compared to the $150 billion (and counting) in losses from bad loans they’ve racked up.
Mortgage Giants Leave Legal Bills to the Taxpayers [NYT]