Accusing President Obama of rewarding failure, a top Republican urged him to reclaim millions in bonuses that were doled out to executives of Fannie Mae and Freddie Mac despite the mortgage lenders’ recent dependance on taxpayer dollars.
“I’m calling on the president of the United States to cancel those bonuses and explain to the American people, the taxpayers who bailed out Freddie and Fannie, why he continues to reward failure,” Sen. John Barrasso, Wyoming Republican, told reporters on Tuesday afternoon.
Ten top administrators of the two government-sponsored corporations were paid $12.79 million in bonuses on top of their regular salaries last year, Politico reported Monday. Approved by the Federal Housing Finance Agency, the payments were to reward modest successes in achieving some benchmarks aimed at preventing home foreclosures.
Emotions have run high over Fannie and Freddie since 2009, when the housing market plunged and the two mortgage giants’ lending standards helped to push them to the brink of collapse.
To prevent further meltdown, the government essentially took over the corporations, infusing them with $170 billion to pay for growing losses on the mortgages they owned and guaranteed. Although the cost for the bailout won’t be as much as originally expected, the lenders are still viewed by some as symbols of public mismanagement at taxpayer expense.