Fannie And Freddie Have Their Own Bonus Problems

Fannie and Freddie are jumping on the bonus train.

The WSJ reports that Fannie and Freddie are set to pay bonuses to executives of from $470,000 to $611,000. Apparently there are hundreds of employees in line for retention bonuses of some size.

The logic for the payment of these bonuses and the history of how they came to be is the same old song.

The companies’ regulator, the FHFA, approved the retention bonuses last year, saying they would help the companies keep critical employees at a time when it isn’t clear what long-term role, if any, Fannie and Freddie will play in the U.S. mortgage-finance industry. Congress is starting to debate how to restructure the companies and perhaps replace them with new entities.

I hope that those in line for this money haven’t committed to spend any of it yet.

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