House Will Grill Fannie & Freddie Execs Today on the Hill (2004 Video) …Updated
The US House is going to grill the former executives of failed mortgage finance giants Fannie Mae and Freddie Mac today including former Clinton administration budget adviser and Obama housing adviser Franklin Raines.
Raines who made millions with Fannie Mae was later canned over an accounting scandal.
Of course, these are the same two mortgage giants that Democrats defended back in 2004 during a similar House hearing:
The former Fannie Mae and Freddie Mac execs are going to be grilled today on the Hill by the same ragtag bunch of partisan hacks who defended them not that long ago.
Yahoo Business reported, via Free Republic:
Lawmakers are poised to trade barbs Tuesday about who deserves most of the blame for the collapse and government takeover of mortgage finance titans Fannie Mae and Freddie Mac.
The two companies, which were seized by federal regulators in September, have become highly charged political targets in the debate over what caused the U.S. housing crisis and the resulting financial fallout.
Four former top executives are scheduled to be grilled at the hearing, which is being led by Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee, starting at 10 a.m. EST. But there are doubts about whether the hearing will produce any solid conclusions or will just devolve into partisan bickering.
“I think we’re going to get a lot of finger-pointing, which will be totally unproductive,” said Bert Ely, a banking industry consultant in Alexandria, Va.
Fannie and Freddie, which own or guarantee around half the $11.5 trillion in U.S. outstanding home loan debt, long used their lobbying muscle in Washington to thwart efforts to impose tighter regulation.
Washington-based Fannie and McLean, Virginia-based Freddie are the engines behind a complex process of buying, bundling and selling mortgages as investments.
They traditionally backed the safest loans, 30-year fixed rate mortgages that required a down payment of at least 20 percent. But in recent years, they lowered their standards, matching a decline fueled by Wall Street banks that backed the now-defunct subprime lending industry.
Republicans blame Fannie and Freddie, and the effort to promote homeownership under the Clinton administration for sowing the seeds of the financial meltdown. Democrats defend the companies’ role in encouraging homeownership and note that Wall Street banks — not Fannie and Freddie — led a dramatic decline in lending standards.
Four former CEOs of Fannie and Freddie are scheduled to testify Tuesday. One pair, Fannie Mae’s Franklin Raines and Freddie Mac’s Leland Brendsel, were both ousted after accounting scandals. The most recent pair of former top executives, Fannie Mae CEO Daniel Mudd and his counterpart at Freddie Mac, Richard Syron, were removed from their jobs this year after the government takeover.
UPDATE: Congressman Henry Waxman tried to cover up the Democrats’ role in creating the current financial crisis, but his post-election hearing today revealed that Democrats bear most of the blame.