Ever wonder why it seems the mortgage foreclosure disaster is not getting better? When Freddie Mac and Fannie Mae say they are on the side of the consumers?
Read this article and be disturbed….
Freddie Mac, a taxpayer-owned mortgage company, is supposed to make homeownership easier. One thing that makes owning a home more affordable is getting a cheaper mortgage.
But Freddie Mac has invested billions of dollars betting that U.S. homeowners won’t be able to refinance their mortgages at today’s lower rates, according to an investigation by NPR and ProPublica, an independent, nonprofit newsroom.
These investments, while legal, raise concerns about a conflict of interest within Freddie Mac.
“We were actually shocked they did this,” says Scott Simon, who heads the mortgage-backed securities team at the giant bond trading and investment firm called PIMCO. “It seemed so out of line with their mission, out of line with what Congress wanted them to do.”
In this article by article by Chris Arnold, there is a demonstration of the arrogance of Freddie Mac. I encourage you to read the entire article.
Gotta love the conclusion:
Meanwhile, even though Freddie is a ward of the federal government, its top executives are highly compensated. The Freddie Mac official then in charge of its investment portfolio, Peter Federico, made $2.5 million in 2010, and had target compensation of $2.6 million for last year – the time period during which most of these inverse floater investments were made. ProPublica and NPR made numerous attempts to reach Federico. A woman who answered his home phone said he declined to comment.