A federal regulator is defending the use of taxpayers' dollars to cover millions in legal fees for Fannie Mae, Freddie Mac and the government-run housing giants' top executives.
In testimony Tuesday to a House subcommittee, Edward J. DeMarco says he shares lawmakers' frustration over the use of the funds. But he says the Federal Housing Finance Agency, which he heads, is legally obligated to cover the legal fees, and failing to make the payments would only invite more lawsuits.
With the housing market collapsing, the government took over Fannie and Freddie in September 2008. Figures gathered by the House Financial Services Committee's oversight subcommittee show that since then, the government has spent $162 million defending them in civil lawsuits alleging fraud.