Fannie, Freddie Charge Taxpayers For Legal Bills

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Investors Business Daily:

Fannie And Freddie: Key players in the subprime bubble continue to run up bills for the taxpayers. The latest outrage is a $100 million-plus tab for defending executives in fraud cases.

Say what you will about the big banks and the wisdom of propping them up with federal money back in 2008.

The fact is, their time at the trough has come and gone. The Treasury has actually turned a bit of a profit — $13 billion — from the funds it injected into the banking sector.

Wall Street may be a convenient political target. But it's not sapping the public's wealth.

Fannie Mae and Freddie Mac are quite a different story. These enablers of the mid-2000s mortgage bubble have racked up losses of $183 billion since the government stepped in to rescue them.

The Obama administration's new budget projects that total investments from the Treasury will reach $221 billion by the fall of 2013.

By 2022, should Fannie and Freddie still be around, the administration expects a net loss of $28 billion on the taxpayers' investment.

With any luck, these two troublemakers will be long gone. But until then, we can expect a string of would-you-believe-it stories like the one this week, detailing how taxpayers are paying the legal fees of former Fannie and Freddie executives charged with securities and accounting fraud.

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A report from the inspector general of the Federal Housing Finance Agency, which oversees the two bailed-out mortgage companies, says they have paid about $110 million in legal fees.