Fannie Mae execs get bonuses as refinancing volume triples

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“Borrowers are increasingly taking advantage of the low mortgage rates available in the market today,” said Tom Lund, Executive Vice President, Single-Family Mortgage Business for Fannie Mae and one of four top execs recieving retention bonuses. “We anticipate that volumes will increase even more as millions of additional homeowners become eligible to refinance under the president’s Making Home Affordable plan. Providing broader access to affordabel, sustainable mortgages through expanded refinancing opportunities is a critivcal part of preventing future foreclosures and hastening recovery.”

In fact, so many homeowners have sought lower payments and interest rates that the volume of refinancing loans processed by Fannie Mae in February shot up to more than $41 billion. That’s almost triple the refinancing volume in January and the largest refinancing volume in nearly a year. More than 100,00 borrowers have used Fannie Mae’s online mailbox and 50,000 has contacted their national hotline to ask about their eligibility for refinancing under the Obama Administration’s refinancing plan as well. According to Bankrate, mortage rates fell again this week, with the average 30-year fixed mortgage rate dropping to 5.29 percent, the 15-year fixed mortgage rate declinng to 4.86 percent and the average 1-year adjustible rate mortgage (ARM) pulling back to 5.48 percent.

At least four Fannie Mae executives will not be eleigible for refinancing under the Obama administration’s plan. Although Chief Executive Officer Herbert M. Allison did not take a salary or bonus during 2008, four other executives, including Lund received retention bonuses. The Washington Post reports that Lund, Chief Operating Officer (COO) Michael Williams, deputy Chief Financial Officer (CFO) David Hisey and Kenneth Bacon, who is responsible for housing and community development at Fannie Mae, all received retention bonuses of more than $1 million. CNN and the Associated Press put the figure lower, somewhere between $470,000 and $611,000 for each of the four executives.

Freddie Mac allegedly has a similar bonus plan, however, no figures have yet been released.

Both Fannie Mae and Freddie Mac were bailed out by the federal government in 2008. Both are also seeking additional aid from the government and taxpayers this year. Fannie Mae has requested $15.2 billion while Freddie Mac has asked for nearly $31 billion, according to the Associated Press.