To keep workers at government-controlled firms
WASHINGTON – Mortgage finance giants Fannie Mae and Freddie Mac plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs at the government-controlled companies.
The retention awards for more than 7,600 employees were disclosed in a letter from the companies’ regulator released Friday by Sen. Charles Grassley, R-Iowa.
The companies paid out nearly $51 million last year, are scheduled to make $146 million in payments this year and $13 million in 2010.
“It’s hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year,” Grassley said in a statement.
Fannie and Freddie declined to comment Friday.
The two companies, hobbled by skyrocketing loan defaults, were seized by regulators last fall. They now operate under close federal oversight with new chief executives installed by the government.
Since the takeover, Fannie Mae has received $15 billion in federal aid, while Freddie Mac has received nearly $45 billion.
The companies’ federal regulator, James Lockhart of the Federal Housing Finance Agency, defended the bonuses in a letter to Grassley, noting that the collapse of the company’s stock prices “destroyed years of savings for many” workers.