Morning Brief: Mortgage Giants Take Hill Grilling


Federal mortgage giants Fannie Mae and Freddie Mac took a grilling Tuesday on Capitol Hill.

A congressional panel told former Fannie chief executive Franklin D. Raines that he and his colleagues acted irresponsibly in making decisions that led to the housing crisis. Raines, in turn, blamed the federal regulator that oversaw his company for failing to rein in risky practices.


Former Freddie Mac CEO Richard Syron. (By Melina Mara -- The Washington Post)

Raines joined his successor, Daniel H. Mudd, and former Freddie chief executives Richard F. Syron and Leland C. Brendsel for the hearing by the House Oversight and Government Reform Committee.

The committee questioned why the companies moved aggressively into buying and guaranteeing risky mortgages despite warnings from risk officers about the dangers they posed to the companies and borrowers.

"Their irresponsible decisions are now costing taxpayers billions of dollars," said committee Chairman Henry A. Waxman (D-Calif.).

Raines said the decision to move into new markets largely came after his tenure and should have been constrained by the company's regulator.

In other news, the National Association of Home Builders is feeling the pinch of the housing market. The downtown D.C. organization said it will cut staff and other expenses to save $11.5 million in 2009.

"In my 20 years at NAHB, including the past eight years as President and CEO, this is by far my toughest and most difficult decision," Jerry Howard, president and chief executive of NAHB, said in a statement. "The staff cutbacks touch on the careers of dedicated professionals who have been committed to the mission of our industry. They are good, talented and hard-working people."

By Alejandro Lazo  |  December 10, 2008; 8:46 AM ET  | Category:  Danaher , Economy Watch , Fannie Mae , Freddie Mac , Morning Brief
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We can see that even larger companies really need the help of fast payday loans because of the economical crisis that they are in. The government has been making fast payday loans to enormous credit firms that have run their assets dry. The mortgage and consumer credit giants, Fannie Mae and Freddie Mac, were given enormous stimulus packages a couple months ago in order for them to stay afloat during the hard hits of the recession. In Washington DC on Tuesday, December 9th, the mortgage firms were subject to a hearing by the House Oversight Committee where they were grilled by Congress over their corporate strategies that led to the near destruction of their companies. What had apparently happened was that the leadership of those companies had invested in mortgage backing for their cash flow. So they basically bought other people’s debt, thinking that it meant instant cash flow, especially when they raised the interest rates on the mortgages that they purchased. Borrowers who had borrowed money from irresponsible lenders started defaulting on their loans, thus, the companies that had bought their debt began to stagger towards the brink. House Oversight Committee Chairman Henry Waxman called their action irresponsible, especially after senior risk managers had questioned the call to make and invest in such loans. This shocking incident emphasizes the importance of being extremely responsible with your finances. Budget properly, practice smart spending habits, save money, and don’t put money into anything that looks too good to be true. If you need some help with a sudden emergency expense, payday loans are available at a reasonable rate to keep your finances above water until your next payday. Click to read more on Fast Payday Loans.

Posted by: FranroseO | December 15, 2008 3:08 AM

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