New Revelations About Fannie Mae and Freddie Mac’s Role Demand Further Investigation

Republican Leader, my Congressman and a Great American -- John Boehner:

WASHINGTON, D.C. – House Republican John Boehner (R-OH) today highlighted fresh revelations that senior executives at Fannie Mae and Freddie Mac – two government housing entities widely acknowledged to be at the heart of today’s financial crisis – were warned years ago that the agencies were offering mortgages that placed homeowners and taxpayers at considerable risk. The new report, brought to light in [yesterday]’s Washington Post, preceded an Oversight & Government Reform Committee hearing on Fannie Mae and Freddie Mac’s role in the financial meltdown. House Republicans called for the hearing more than two months ago, and urged the Justice Department to investigate their actions as well. Boehner released the following statement:

“Mistakes made by Fannie Mae and Freddie Mac are clearly at the root of the housing debacle that led, in part, to the current financial crisis. The news today that senior officials at these troubled institutions were clearly warned about the damage their irresponsible loans posed to the larger housing market should serve as a reminder that any effort to understand the current crisis must include the role played by Fannie and Freddie – and the role played by misguided politicians who pushed them to continue making loans that would never be repaid.

“Over the last decade, Republicans sought to reform Fannie Mae and Freddie Mac but our efforts were blocked by those who said no reform was needed. At the very same time that reform opponents claimed there was ‘no crisis’ at Fannie and Freddie, predatory subprime lending ran rampant under former CEO Franklin Raines’ watch, laying the foundation for the economic troubles that are playing out today.

“Congress must get to the bottom of why executives at Fannie and Freddie were permitted to run amok, what role Congress itself played, and what we must do to make certain this never happens again.”

NOTE: The Washington Post reported [yesterday] that “Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm, hurt borrowers and generate more risky loans throughout the industry. At Fannie Mae, top executives were told it was necessary to develop ‘underground’ efforts to buy subprime mortgages because of competitive pressures, although there were growing risks and borrowers often didn’t understand the terms of the loans, documents show.” The influx of subprime mortgages is widely believed to be at the heart of the ongoing financial crisis.

Why spend time on this? Because very few other people are going to... We can't let them flood the zone...