Bill clears House to curb pay of CEOs of Fannie, Freddie

WASHINGTON (AP) — Legislation that has cleared the House would curb the pay of the CEOs of government-controlled mortgage giants Fannie Mae and Freddie Mac, overriding regulators' approval of nearly $4 million yearly pay packages for each.

The government rescued the two companies with a $170 billion taxpayer bailout at the height of the financial crisis in September 2008, as they veered toward collapse under the weight of losses on risky mortgages.

The gradual recovery of the housing market in recent years has made Fannie and Freddie profitable again, and they have paid quarterly dividends to the U.S. Treasury that exceed the amounts of their bailouts.

Investors would pay fees in exchange for insurance on mortgage securities they buy, and the government would become a last-resort loan guarantor.

Royce said the legislation to cap the CEOs' pay was a victory for taxpayers, but added, "The real battle of winding down (the companies) and ending the government's domination of the housing market remains."