Freddie Mac CEO got $19.8 million in 2007

[1prophet]

Freddie Mac CEO got $19.8 million in 2007

Company loses half its value, but Syron could get $20M in stock awards

NEW YORK - Freddie Mac Chairman and Chief Executive Richard Syron pocketed nearly $19.8 million in compensation last year, according to a Securities and Exchange Commission filing Friday, even though the mortgage company's stock lost half its value in 2007.

If Syron stays at the helm of Freddie Mac through the end of next year, he will receive nearly $20 million in stock awards if the board says he has met certain goals. This year, he is guaranteed to get $8.8 million in stock grants regardless of performance.

For 2007, Syron received a $1.2 million salary, a $3.45 million bonus, including $1.25 million to remain at the company, and $771,585 in other compensation. He also received stock and options valued by the company at $14.3 million at the time they were awarded.

Now this is what it has all come to success or failure is out and meeting certain goals set by your buddies on the board is in, and when you sit on the board you return the favor.

 

[babylon5]

Corruption pays

 

[BansheeX]

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

 

[fskimospy]

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

 

[Slew Foot]

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Lending at lower rates vs paying a lower price. Ill take the lower price thank you.
And a 700K limit? How the heck is that supposed to be "affordable"?

 

[BansheeX]

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

 

[smack Down]

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

So shut they down and create a new GSE that has explicit government backing and that way we get the benefit without eating billions of dollars in debt.

 

[halik]

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

DING DING DING
Government sponsored entities exist for a reason.

 

[halik]

Originally posted by: smack Down

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

So shut they down and create a new GSE that has explicit government backing and that way we get the benefit without eating billions of dollars in debt.

Right and what will hsppen to all their obligations and the jillions of mortgages?

 

[LegendKiller]

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

 

[Slew Foot]

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

I saw a chart somewhere a week ago, JPM (i think it was) expect 4% of prime mortgages to go under in the next couple years, that seems like a hell of a lot.

 

[brxndxn]

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

A pittance? The only thing it did was make an 'affordable' house for average salary go from $150k to $300k.. while the salary stayed the same.

Now, because of the mess, we pay higher prices for everything!

WTF is this trillion dollar 'pittance' you're talking about?

 

[LegendKiller]

Originally posted by: Slew Foot

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

I saw a chart somewhere a week ago, JPM (i think it was) expect 4% of prime mortgages to go under in the next couple years, that seems like a hell of a lot.

It is. What people don't realize is that prime mortgage (and mortgages overall) don't default all that much.

The GSE writedowns have been, mainly, because when they sell mortgages they retain a portion of them. That portion is a "first loss" piece, which means they absorb the first loss of any defaulted mortgages, before bondholders do. THis piece is valuated at the sale of the bonds, it also includes excess spread (revenue - funding), and servicing (revenue from servicing the loans).

When things change beyond what you modeled out, then you need to either write-up this instrument, or write it down. Since defaults are higher than expected and excess spread is lower, they write it down.

They won't even get close to facing a 1tr writedown.

 

[smack Down]

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

%20 overall might be a little high, but 20% of those written in the last 5 years sounds about right.

The amount is going to be massive why else did the FED ask for a blank check from congress.

 

[LegendKiller]

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

%20 overall might be a little high, but 20% of those written in the last 5 years sounds about right.

The amount is going to be massive why else did the FED ask for a blank check from congress.

20% in the last 5 years? Are you kidding me? Static pool defaults won't even be close to that. That's 5x the highest defaults seen.

Keep in mind that these are *CONFORMING* mortgages.

Subprime probably won't even reach 20% except for the worst vintages and exotic mortgages.

What's your basis of assumption? Have you run MSA depreciation rates against lending volume, including downpayment profiles and FICO scores to come up with an adequate cashflow model? How did you stress the model in the face of the forward yield curve, stressing prepayments and excess spread assumptions? What variables did you change? What was your distribution of results? What type of statistical model did you use? @Risk?

Or, let me guess, you're just talking out of your ass, like usual.

Don't talk out of your ass unless you know what you're talking about. You've probably never even seen a static pool default curve, let alone know what they typically are for conforming mortgages.

 

[fskimospy]

Originally posted by: brxndxn

Originally posted by: eskimospy

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

A pittance? The only thing it did was make an 'affordable' house for average salary go from $150k to $300k.. while the salary stayed the same.

Now, because of the mess, we pay higher prices for everything!

WTF is this trillion dollar 'pittance' you're talking about?

First of all genius, Fannie Mae was founded in 1938, so it's been doing this for the better part of a century. It is hardly the cause of the housing bubble so don't even try to blame that on Fannie and Freddie.

Secondly, what the hell are you talking about with 'trillion' dollar bailouts? For a good analysis of what it would cost us read this article from slate. I'm not finance expert or anything, but at least I know enough not to open my stupid mouth without doing some reading on the subject first. Trillion dollars my ass.

 

[smack Down]

Originally posted by: LegendKiller

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

%20 overall might be a little high, but 20% of those written in the last 5 years sounds about right.

The amount is going to be massive why else did the FED ask for a blank check from congress.

20% in the last 5 years? Are you kidding me? Static pool defaults won't even be close to that. That's 5x the highest defaults seen.

Keep in mind that these are *CONFORMING* mortgages.

Subprime probably won't even reach 20% except for the worst vintages and exotic mortgages.

Don't talk out of your ass unless you know what you're talking about. You've probably never even seen a static pool default curve, let alone know what they typically are for conforming mortgages.

Your talking out your ass unless you've seen one published next year. Tell me how much previous data you have on foreclosure when the nationally the value of a median priced house has decreased? How about when wages have been stagnant and inflation at 5%.

Hell you've only got 40 years as Fannie Mae being a private company.

 

[LegendKiller]

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

%20 overall might be a little high, but 20% of those written in the last 5 years sounds about right.

The amount is going to be massive why else did the FED ask for a blank check from congress.

20% in the last 5 years? Are you kidding me? Static pool defaults won't even be close to that. That's 5x the highest defaults seen.

Keep in mind that these are *CONFORMING* mortgages.

Subprime probably won't even reach 20% except for the worst vintages and exotic mortgages.

Don't talk out of your ass unless you know what you're talking about. You've probably never even seen a static pool default curve, let alone know what they typically are for conforming mortgages.

Your talking out your ass unless you've seen one published next year. Tell me how much previous data you have on foreclosure when the nationally the value of a median priced house has decreased? How about when wages have been stagnant and inflation at 5%.

Hell you've only got 40 years as Fannie Mae being a private company.

I've seen one published 2 weeks ago sparky. What have you seen? Do you even know what a default curve is? How do you create one?

WHat's the AAA stress multiple for a conforming loan? How does that translate into loss coverage after excess spread stressing? What's your AAA enancement?

It doesn't matter if the prices have decreased if the people in the house can afford it. Where you're seeing problems are ARM based products, not 30yr fixed. Those that stretched into a 30yr fixed may have problems on the bottom end, but most likely not. What about % down? The ones getting hit had marginal downpayments. Conforming have an average of 20%+. THat keeps people in their properties.

5x defaults is an absolutely idiotic number that only somebody who doesn't know anything about mortgage finance would come up with. You're obviously one of those people, especially since you think that a plane won't take off.

How long has Microsoft been a public company? ZOMG! Longevity of public companies makes a big difference now.

You're out of your depth. If you've got something, then justify your numbers with a full cashflow analysis.

Put up or shut up.

 

[smack Down]

Originally posted by: LegendKiller

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: BansheeX

Originally posted by: eskimospy
They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

Heh, don't be so sure, I've heard the losses could run even higher than that. And don't forget the moral hazard of everyone, including legitimate savers, bailing out irresponsible homeowners who were in over their heads. Those legitimate savers haven't been saved anything, all they're getting is inflation and much less affordable homes. The speculative buyers win when you socialize their losses. Not only that, now it sets a precedent which incentivizes future bad behavior. Why would I do the right thing and save next time if I got burned before? Oh, the trainwreck of it all...

It's impossible for the losses to run higher than that.

For them to sustain a 1TR loss, about 20% of prime mortgages would need to default. Do you know what the % of prime mortgages default normally?

%20 overall might be a little high, but 20% of those written in the last 5 years sounds about right.

The amount is going to be massive why else did the FED ask for a blank check from congress.

20% in the last 5 years? Are you kidding me? Static pool defaults won't even be close to that. That's 5x the highest defaults seen.

Keep in mind that these are *CONFORMING* mortgages.

Subprime probably won't even reach 20% except for the worst vintages and exotic mortgages.

Don't talk out of your ass unless you know what you're talking about. You've probably never even seen a static pool default curve, let alone know what they typically are for conforming mortgages.

Your talking out your ass unless you've seen one published next year. Tell me how much previous data you have on foreclosure when the nationally the value of a median priced house has decreased? How about when wages have been stagnant and inflation at 5%.

Hell you've only got 40 years as Fannie Mae being a private company.

I've seen one published 2 weeks ago sparky. What have you seen? Do you even know what a default curve is? How do you create one?

WHat's the AAA stress multiple for a conforming loan? How does that translate into loss coverage after excess spread stressing? What's your AAA enancement?

It doesn't matter if the prices have decreased if the people in the house can afford it. Where you're seeing problems are ARM based products, not 30yr fixed. Those that stretched into a 30yr fixed may have problems on the bottom end, but most likely not.

5x defaults is an absolutely idiotic number that only somebody who doesn't know anything about mortgage finance would come up with. You're obviously one of those people, especially since you think that a plane won't take off.

How long has Microsoft been a public company? ZOMG! Longevity of public companies makes a big difference now.

You're out of your depth. If you've got something, then justify your numbers with a full cashflow analysis.

Put up or shut up.

Right if on Wednesday October 23, 1929 you could say the stock market has never lost 89% of its value.

You can't apply past data to the present. Ever hear the saying "Past Performance Does Not Guarantee Future Results." Yes, I'm sure with your wonderful chart you can tell me what the static pool default curve was a week ago and you can apply that to next week and be right 99% of the time. That doesn't mean you can apply it 5 years into the future.

Just as I can look up in the sky and see it is sunny out doesn't mean I can predict it will always be sunny.

Edit:
The number of defaults is directly linked to changes in house value. Very few people will default on payments if their house is worth 10 times what they owe. On the other hand very few will make payments if their loan is 10 time the value of the house.

 

[LegendKiller]

Originally posted by: smack Down
Right if on Wednesday October 23, 1929 you could say the stock market has never lost 89% of its value.

You can't apply past data to the present. Ever hear the saying "Past Performance Does Not Guarantee Future Results." Yes, I'm sure with your wonderful chart you can tell me what the static pool default curve was a week ago and you can apply that to next week and be right 99% of the time. That doesn't mean you can apply it 5 years into the future.

Just as I can look up in the sky and see it is sunny out doesn't mean I can predict it will always be sunny.

Yeah, OK. So you've got nothing but cliche statements and no solid analysis. The statement is actually , the past is not a perfect predictor of the future. Stupid smoke blowing prognostications don't predict anything either, especially when you have no grounding.

The problem with people like you is you never admit when your wrong. 20% in prime mortgages will never happen.

Here's what we can do. How about we lay money on it? I'll put 1,000 bucks on it right now. Today. If you think you're right, then so be it. I can have it in Paypal by tonight.

 

[jackace]

Originally posted by: brxndxn

Originally posted by: eskimospy

Originally posted by: BansheeX

Originally posted by: babylon5
Corruption pays

Particularly in governmental companies like these, which allowed extraordinary leverage in their case. Must be nice for Paulsen to get a blank check now from congress to bail these guys out with massive amounts of inflation. Fannie and Freddie were formed with the intention of making mortgages more affordable. Ultimately, they are now just another socialist program with results opposite of the intentions. They've enabled individuals to overpay for homes they can't afford and are now keeping homes from correcting to affordable prices under the pretext that they're too big to be allowed to fail. What a mess.

You realize the entire reason they were able to make homes more affordable by lending at lower rates was the implicit backing of the government, right? They've saved consumers hundreds of billions of dollars. The amount we might have to pay to bail them out will be a pittance compared to that.

A pittance? The only thing it did was make an 'affordable' house for average salary go from $150k to $300k.. while the salary stayed the same.

Now, because of the mess, we pay higher prices for everything!

WTF is this trillion dollar 'pittance' you're talking about?

I tend to agree with this statement. The increased availability of easy to access credit has caused prices to go up on many of our goods and services.

Edit- As far as the OP goes it doesn't surprise me at all. CEOs have been getting paid good money to fail at their jobs for some time now. It's even got a name now, Golden Parachute.