Fannie Mae and Freddie Mac expect to pay roughly $210 million in retention bonuses over the next 18 months, reports the Wall Street Journal. Some 7,600 employees are slated to get bonuses, in some cases totaling as much as $1.5 million, in a program that has drawn sharp criticism in Washington. Federal Housing Finance Agency director James Lockhart told Charles Grassley about the payments in a letter made available to the Journal.
Barney Frank has called on Lockhart to end the payouts, saying he was “very skeptical” about rewarding the failed GSEs' staffs. But Lockhart defended the bonuses, $51 million of which have already been paid. “It is not realistic to expect that experienced and highly skilled employees will indefinitely continue to work as hard as they have if we do not provide reasonable incentives,” he wrote.