Meltdown

Taxpayers Foot Fannie's Legal Bill

Taxpayers have spent $160 million defending executives of Fannie Mae and Freddie Mac from charges of fraud. Over $132 million went to defending Fannie Mae and its executives from fraud charges related to accounting irregularities that occurred long before the subprime mortgage crisis hit. Corporations typically cover their own legal costs unless an executive is found guilty. “One of the things I feel very strongly about is we need to be doing everything we can to minimize any further exposure to the taxpayers associated with these companies,” said Rep. Randy Neugebauer, the Texas Republican who requested information on the payments. The two mortgage companies have lost a collective $150 billion since their $160 billion government takeover in 2008. Since the financial regulatory law passed last year did not outline what the government should do with Fannie Mae and Freddie Mac, Congress is expected to take up the issue this year, and the Treasury Department will outline a plan in a report expected in a few weeks.