Freddie Mac could sell billions of debt

Freddie Mac may sell off $40 billion of unsecured debt throughout 2012, in an effort to lower costs and reduce mortgage investors' refinancing risk.

On January 13, Freddie Mac sold $3 billion of the mortgage-linked amortizing notes to pay off 2.06 percent of its debt. The mortgage lender may sell more bonds 10 other times throughout 2012, in hopes of getting rid of $1.5 billion and receive orders for $4.5 billion. Total, the lender hopes to raise $20 billion to $40 billion from the offers, Bloomberg reported.

In addition to raising funds through bond sales, Fannie Mae and Freddie Mac will likely face pay cuts in the near future to help reduce the mortgage lenders' outstanding debt to taxpayers. According to the Wall Street Journal, executives at Fannie Mae and Freddie Mac hired to replace the old leaders will receive significantly less compensation than their predecessors, making it harder to attract qualified chief executives to fill the positions.

Freddie Mac is considering offering $250,000 to $500,000 annually for its new CEO, the source states. Regulators will have to approve the annual salary for the next Freddie Mac CEO, and the same rules and general pay range will likely be applied to Fannie Mae as well.

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