Regulator draws fire for Fannie, Freddie pay

WASHINGTON (Reuters) - The regulator for Fannie Mae and Freddie Mac drew fire from lawmakers in Congress on Thursday for approving executive bonuses at the two companies that reportedly ranged into the millions of dollars.

The Federal Housing Finance Agency recently signed off on $12.79 million in bonus pay for ten executives at the two mortgage finance firms, according to a letter sent by a Republican in the U.S. House of Representatives to the regulator requesting more information about the payments.

The regulator, Federal Housing Finance Agency Acting Director Edward DeMarco, defended the bonuses in an appearance before a House subcommittee.

"The compensation programs that are being reported about are the same compensation programs that have been in place since 2009 at the same levels," DeMarco said.

The figures have brought rebukes from some lawmakers who have noted that Fannie and Freddie continue to receive taxpayer support to offset losses.

The two companies have been propped up with about $145 billion in taxpayer support since they were seized by the government and placed into conservatorship in September 2008, and they are under political pressure to minimize losses.

"This compensation problem will be solved fastest when Congress gets on with coming to a final resolution of the conservatorship," DeMarco added, referring to the need to determine the future of the two government-sponsored enterprises.

Uncertainty over their fate has led to a high degree of turnover at the companies. DeMarco said that FHFA is seeking to attract new executives to lead the two firms who are willing to work for smaller compensation packages.

Representative Randy Neugebauer, a Texas Republican, and chair of the House Financial Services subcommittee on oversight and investigations, said in his letter to DeMarco that he is concerned that some expenditures at Fannie and Freddie reveal the two firms are functioning in a "business as usual" mode, despite receiving taxpayer funds to stay afloat.

"I am concerned that Fannie and Freddie are spending money in ways and at levels that do not further the purposes of their conservatorships," Neugebauer wrote.

In particular, he zeroed in on Fannie's finances, asking the regulator questions about a company expense statement that included $66.8 million spent in "miscellaneous expenses" in 2011, and $27.7 million on "travel and entertainment."

Separately, the Senate Banking Committee said on Thursday it will hold a hearing on the executive bonuses, although a date has not yet been set.

Earlier on Thursday, Freddie Mac said it will seek an additional $6 billion from U.S. taxpayers following its worst quarterly loss this year.

Fannie Mae is expected to file its earnings statement later this month.

The government depends on FHFA to protect the firms' assets, although some officials believe they could be more aggressive in helping to improve the housing market.

The companies, which buy mortgages from lenders and repackage them as securities for investors, have recently been ordered to oversee a retooled refinancing effort to help at-risk homeowners.

(Reporting by Margaret Chadbourn, Editing by Andrew Hay)