After top executives at Fannie Mae and Freddie Mac received nearly $13 million in performance bonuses, the two firms spent 2011 shedding personnel and administrative expenses, according to testimony posted in advance of a Thursday afternoon hearing before a House subcommittee. Fannie CEO Michael Williams, Freddie CEO Charles “Ed” Haldeman and their regulator, the Federal Housing Finance Agency Acting Director Edward DeMarco, are scheduled to appear before the committee to defend the bonuses as they did before a separate committee hearing in November and to take questioning over how the FHFA is overseeing the companies that owe more than $151 billion to the Treasury Department. In their written testimony, Williams and Haldeman repeated prior defenses of the bonuses, claiming the payments are crucial to maintaining top-flight decision makers handling trillions of dollars in portfolio assets. But they also pointed out major cuts the firms made in order to save money. Freddie reduced expenses by more than $120 million as of the third quarter of 2011, much of it coming from reducing the number of employees through restructuring and attrition. In 2011 alone, Freddie expects to have cut employees by 9%. It reduced roles and combined some positions as well. There is no longer a chief operating officer, and the company combined the chief credit officer and chief enterprise risk officer responsibilities. “The overall trend is clear: We have substantially reduced general and administrative expenses and will continue striving to do so,” Haldeman said. He is set to leave himself within a year. Since he joined Freddie in August 2009, 14 of his 18 committee executives have been changed. Fannie cut administrative expenses 16% in 2011 from the year before. Its employees are down 10% from 2010 as well. It trimmed costs related directly to personnel by 14%, and Williams said he has eliminated positions at all levels of the company. Since 2008, it reduced the amount of contractors in use by 40%. “Since being placed in conservatorship, we have reduced expenses in many areas while investing in resources for areas of greatest need,” Williams said. Despite the cuts, the GSEs reported combined net losses of $22.6 billion in the first three quarters of 2011. The House subcommittee may focus its questioning around a recent report from the FHFA Inspector General detailing how the agency has too often deferred to the GSEs on key business decisions. “Management made these decisions in consultation with FHFA,” Williams said in his written testimony. “I take our decisions seriously.” Write to Jon Prior. Follow him on Twitter @JonAPrior.