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