Legal Fees Mount at Fannie and Freddie

By GRETCHEN MORGENSON

Taxpayers have advanced almost $50 million in legal payments to defend former executives of Fannie Mae and Freddie Mac in the three years since the government rescued the giant mortgage companies, a regulatory analysis has found.  

In that time, $37 million has gone to three former Fannie Mae executives accused of securities fraud, according to the analysis by the inspector general of the Federal Housing Finance Agency, which oversees both companies. Acting as their conservator, the agency is charged with protecting taxpayers from further losses at Fannie Mae and Freddie Mac. Those losses now stand at $183 billion. 

Although the legal costs for the former executives are a small fraction of the companies’ mortgage losses, it is imperative that the housing agency move to limit these fees, said Steve A. Linick, inspector general of the agency. 

Read more: http://www.nytimes.com/2012/02/22/business/legal-fees-for-fannie-and-freddie-near-50-million.html?smid=tw-nytimesbusiness&seid=auto