The chief executives of Fannie Mae and Freddie Mac, the collapsed mortgage finance giants at the centre of the United States housing market, repeatedly ignored warnings that they were putting their companies at risk with exotic mortgage investments, a Congressional hearing has been told.
Daniel Mudd, of FannieMae, and Richard Syron, of Freddie Mac - who both lost their jobs when the companies were taken into conservatorship by the US government in September - were harangued by lawmakers at a hearing on Capitol Hill yesterday.
They were accused of putting the pursuit of their personal bonuses ahead of preserving the stability of their companies. But the two men pushed the blame back on Congress and on regulators, saying they were under pressure to make more mortgages available to low-income Americans.
Henry Waxman, chairman of the House of Representatives oversight committee, said executives saw private Wall St firms making money from lending to riskier borrowers, and pursued market share in defiance of warnings from their risk officers.
"The CEOs of Fannie and Freddie made reckless bets that led to the downfall of their companies," Waxman said.
