Posted by Mark Williams

Yesterday the House Oversight and Government Reform Committee ripped into former Fannie Mae CEO Daniel Mudd and former Freddie Mac CEO Richard Syron.

The Committee is chaired by Henry Waxman, a democrat from Beverly Hills who has been attacking a lot of people lately. It often appears that Mr. Waxman is more interested in obtaining confessions and laying blame and generally attacking the free market than he is in sorting out the foreclosure fiasco.

At this particular hearing he was flummoxed when the executives refused to take personal blame for the subprime meltdown.

Fannie and Freddie have been taken over by federal regulators. The two agencies own or guarantee more than $11 trillion in home loans.

Damaging Emails Found

The Committee uncovered internal emails at the agencies that warned senior executives about the risky nature of the loans that they were buying, specifically stated income loans. Not only did the CEOs ignore the emails and continue to acquire increasing questionable loans, but in Freddie Mac’s case the former chief risk officer that sounded the alarm was fired.

How Does This Impact You?

Not at all. This hearing was more about playing the blame game than it was about helping out distressed homeowners. The real work is already underway at Fannie, Freddie, the FDIC and Treasury.

It’s just interesting to know that the two agencies that bought or guaranteed 50% of all home loans suspected as early as 2005 that many of the loans would eventually be defaulted upon, and that the warning bells were ignored.