The inspector general of the Federal Housing Finance Agency released a report Thursday that casts a suspicious eye on how Fannie and Freddie used their money for the Mortgage Bankers Assn.’s annual convention in Chicago.
In addition to covering employees’ costs, the taxpayer-funded housing finance giants shelled out $140,000 on business meals and hosted dinners and another $140,000 to become high-level sponsors (whose benefits include advertisement space, exhibitor plots and admission to luncheons and parties).
According to the housing finance agency, using funds to serve coffee, doughnuts, muffins and the like are fine; paying for full-fledged formal meals are not. Since launching the investigation in November, the agency said it has sent letters to Fannie and Freddie exhorting them to avoid unnecessary travel-related expenses and to exercise “caution and prudence.”
McLean, Va.-based Freddie and Washington-based Fannie have used about $183 billion after being seized by the government in 2008 to recover from huge mortgage-related losses.
The entities own or guarantee half of all the mortgages in the country. This month, federal regulators said that pay for the top 15 Fannie and Freddie executives would be cut by 24% this year.