UPDATE 1-US housing mkt may be near bottom -Freddie Mac CEO

* Home sales, prices suggest market near bottom

* Pace of foreclosures likely to accelerate in 2010

* Market pay rates said necessary to keep talent (Adds quotes, context, background byline)

By Soyoung Kim

DETROIT, Jan 26 (Reuters) - The U.S. housing market appears to have bottomed out after its worst downturn since the Great Depression, but a large wave of homes in foreclosure remains a risk to the sector's fragile recovery, Freddie Mac FRE.N Chief Executive Charles Haldeman said on Tuesday.

Freddie Mac, the No. 2 provider of U.S. residential mortgage funding, expects the pace of foreclosures to accelerate in 2010 as extensive government support to stem a rising tide of foreclosures starts to wane, he said.

"The numbers will always bounce around some, but from home sales to house prices, it appears that nationally we may at last be approaching a bottom," Haldeman said at a speech sponsored by the Detroit Economic Club.

"The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive."

Industry analysts are divided on how recovery in the U.S. housing market can be sustained without government support.

Data ranging from pending home sales to builders' sentiment has raised concerns that the market, which has been at the core of the worst U.S. economic downturn since the 1930s, might be slipping again.

Housing has been recovering from a three-year slump, driven by a tax credit for first-time buyers and low mortgage rates. The tax credit, which had been scheduled to expire in November, was expanded and extended until June.

Haldeman said he expected the 30-year fixed mortgage rate to remain between 5 and 6 percent throughout 2010.

The mortgage finance company refinanced loans for almost 170,000 families through the end of 2009 under an Obama administration aid program.

Combined with Freddie Mac's own programs, the company refinanced about $379 billion in home loans in 2009, he said.

EXECUTIVE COMPENSATION

Freddie and its larger rival Fannie Mae FNM.N were placed under government control by former U.S. Treasury Secretary Henry Paulson in 2008 amid the escalating credit crisis. The government owns almost 80 percent of the companies.

Despite its status as a government-sponsored entity, Freddie Mac needs to pay top executives at competitive market rates to attract and retain the key talent needed to steer the battered U.S. mortgage market toward recovery, Haldeman said.

Its top executives had joined the company with expectations for certain pay rates, and "without private market compensation" it would be hard to retain them, adding:

"We need to keep that team there. That team has tremendous background and experience in the mortgage industry and Freddie Mac and they lead the company and they're the reason that the company was in such a good position when I arrived there."

Under pay packages approved by the top U.S. housing regulator in December, Fannie Mae CEO Michael Williams and Freddie Mac CEO Haldeman would receive up to $6 million in total compensation for 2009. Freddie Mac said the same figure would apply to Haldeman's pay package for this year as well.

A group of top Republicans wants to slash the pay of executives at the two companies by 97 percent amid growing public anger at how top executives in the financial services industry are paid.

On Dec. 24, the Obama administration announced it was extending an unlimited credit line to Fannie Mae and Freddie Mac through the end of 2012, which would keep them afloat no matter how high their losses.

Fannie and Freddie have so far tapped about $111 billion from the U.S. Treasury Department as they continue to suffer heavy losses. Since the financial crisis began, hundreds of thousands of homes have been lost and many more are on the verge of being foreclosed this year and next.

U.S. President Barack Obama is expected to announce an outline of what he'd like to see happen to Fannie Mae and Freddie Mac when he releases his fiscal 2011 budget proposal in February.

"It's my view that while they will say something about the secondary mortgage market, I don't think there will be a lot of specifics or clarity in that announcement," Haldeman said. (Editing by James Dalgleish)