As long as the government is in control of Fannie Mae and Freddie Mac, they will not be able to introduce any new loan products. Fannie and Freddie were working on new loan products that would have to pass through the federal regulator of the company. On Tuesday the federal regulator had denied introduction of any new loan products due to the extreme losses in the company and greater issues that need to be addressed.
Edward DeMarco, FHFA’s director, made clear that Fannie and Freddie would need to take care of the mess they are in now before taking on new tasks. He also stated that the only reason the company is here today is because of taxpayers. This does not include the introduction of new programs to help individuals with foreclosure prevention.
Multimillion-dollar pay packages were not denied. DeMarco said that they could not afford to lose their highly qualified existing staff. However, they have hired a new chief executive, financial and operating officers. He also reported that the employee compensation was cut at least 40% compared to what it was two years ago, $10 million.
A business that is financially supported by the general public should be under strict regulation until they have completely paid their dues and can survive on their own. DeMarco states that they cannot afford to lose their talented staff. Their “talented staff” has made irresponsible decision that got them in the situation they are in.
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