Political Quotes

“I would like to point out another bit of irony right now. Many of my colleagues who recently complained about the process regarding consideration of this bill were some of the same people who took every measure to block all consideration of GSE reform. Actions have consequences, and in this particular instance, they were almost immediate. As soon as it was apparent that GSE reform was dead, Fannie Mae and Freddie Mac took steps to dramatically increase their risk. The Government Accountability Office, GAO, detailed this in a September 2009 report. The GAO discovered that in 2004 and 2005, the enterprises: . . . embarked on aggressive strategies to purchase mortgages and mortgage assets with questionable underwriting standards. For example, they purchased a large volume of what are known as Alt-A mortgages, which typically did not have documentation of borrowers' incomes and had higher loan-to-value ratios or debt-to-income ratios. Furthermore, purchases of private-label MBS increased rapidly as a percentage of retained mortgage portfolios from 2003 to 2006. By the end of 2007, the enterprises collectively held more than $313 billion in private-label mortgage-backed securities, of which $94 billion was held by Fannie Mae and $218.9 billion held by Freddie Mac. Recently, Daniel Mudd, Fannie Mae's former chief operating officer and chief executive officer, testified: While the market was changing, Fannie Mae struggled to meet aggressively increasing HUD goals.…”