Republicans propose pay cuts for Fannie, Freddie execs, seek other reforms

Republicans on the House Financial Services Committee on Tuesday introduced six bills aimed at reforming mortgage giants Fannie Mae and Freddie Mac, including one that would drastically cut pay packages for senior executives. These join two other bills that Republicans have already introduced.

The bill introduced by committee Chairman Spencer Bachus (R-Ala.) would suspend current pay packages for Fannie and Freddie executives and set up new packages that are "in accordance with rates of pay for senior employees in the executive branch of the federal government."

Others introduced yesterday would require the two mortgage securitizers to increase the fees they charge to guarantee mortgage-backed securities, increase the rate at which they reduce their mortgage portfolios, prohibit them from issuing new debt without approval from the Treasury secretary and repeal the affordable housing goals of the two government-sponsored enterprises (GSEs). The six new bills are numbered H.R. 1221-1226.

Earlier in March, Rep. Jeb Hensarling (R-Texas), the No. 2 Republican on the committee, introduced a bill to end the federal government's conservatorship of the two GSEs after two years. The government placed Fannie and Freddie in conservatorship in 2008 as part of a decision to use taxpayer money to prop up the two enterprises during the housing crisis.