Taxpayers Footed Fannie, Freddie's $160M Legal Bill

Americans spend $24.2 million to defend executives
By Matt Cantor,  Newser User
Posted Jan 24, 2011 6:48 AM CST
In this July 11, 2008 file photo, a sign in front of the Fannie Mae headquarters in Washington is seen.   (AP Photo/Manuel Balce Ceneta)

(Newser) – Taxpayers have spent more than $160 million defending Fannie Mae and Freddie Mac in fraud lawsuits since the government took over the companies in 2008. The closely guarded cost was released last week after Rep. Randy Neugebauer requested the figures last year. Some $132 million of the total went to defend Fannie Mae, mostly over lawsuits and accounting probes that occurred before the subprime crisis; $24.2 million was spent on the defense of three of the mortgage firm’s ex-bosses, the New York Times finds. And the payments continue.

“We need to be doing everything we can to minimize any further exposure to the taxpayers associated with these companies,” said Neugebauer, who sits on the House Financial Services Committee. The Times notes that corporations typically cover such legal fees, and Fannie and Freddie themselves spent millions to defend former execs before the takeover; but after the government moved to back the two companies, the Federal Housing Finance Agency agreed to keep footing the bill. Fannie and Freddie's losses attributed to bad loans have now reached about $150 billion.

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