Two sides to housing fall Real Estate

WASHINGTON -- Well-intentioned victims of a historic, amazing housing marketplace meltdown? Or forward and conceited firms that plunged headfirst in to the riskiest mortgages in a blind office of profits?

The congressional row questioning the monetary predicament Friday listened those dual neatly anomalous reasons for the failures of housing giants Fannie Mae and Freddie Mac, that were seized by the supervision in 2008 at a sum cost of at slightest $125.9 billion to taxpayers so far.

The third day of hearings in to the subprime debt disaster highlighted the formidable assign of the Financial Crisis Inquiry Commission in ferreting out the causes of the misfortune mercantile fen given the Great Depression.

First, dual former Fannie Mae government team testified that sophistry the legislatively mandated missions of the former government-sponsored enterpriseto encounter ever-rising affordable housing goals and to have a distinction for the shareholdersdrove it so deeply in to subprime and alternative unsure mortgages that there was no approach to tarry when the genuine estate burble burst.

"We took the brunt of the predicament head on," pronounced Daniel H. Mudd, who served as arch senior manager from 2004 until the physical condition in 2008. "This unusual shake in the economy, and in the debt marketplace in particular, challenged Fannie Mae in ways that would have been formidable to overcome in any case of any commercial operation decisions that preceded the crisis."

But row members afterwards listened from dual former regulators of Fannie Mae and Freddie Mac. They pronounced that association government team had no one to censure but themselves for the disaster of the housing firms as they in cold blood pursued increase and used their domestic poke to frustrate attempts to rein them in.

"Ultimately, the companies were not the oblivious victims of an mercantile down cycle or injured products and services of theirs," pronounced Armando Falcon, former head of the Office of Federal Housing Enterprises Oversight, that regulated Fannie and Freddie. "Their disaster was deeply secure in a enlightenment of audacity and greed."

Bill Thomas, the commissions clamp chairman, pronounced it reminded him of the classical Japanese movie "Rashomon," that featured a hideous crime removed from opposite points of view.

"I was there for the movie as well," Thomas, who served in Congress from 1979 to 2006, told the regulators, "and I think your version tends to have a larger grade of credit ... than the one that I listened earlier."

Panel members additionally appeared to side some-more with the regulators, expressing doubt that Fannie Mae acted scrupulously in the years heading up to the failure, when it on trial or owned some-more than $5 trillion in mortgages by the time it was seized.

"What did you do in the participation of this really large unsure portfolio and what others have testified to be sort of unsound inner risk government to safeguard that you didnt finish up in the on all sides you in conclusion finished up in?" Douglas Holtz-Eakin, a Republican nominee to the panel, asked Mudd and former Fannie arch commercial operation military officer Robert J. Levin.

But there was no accord on the domestic brawl about the purpose of Fannie and Freddie in the subprime meltdown. Republicans assign that the dual companies triggered the subprime predicament by formulating a clever direct for unsure loans. Democrats disagree the firms contributed to the problems but the predicament was caused by Wall Street and rapacious lenders.