Carl Levin

As a matter of policy, they should have allowed that.

You can't assess the strength of the borrower and that has got to be at the foundation of underwriting, risk assessment, risk management of any of this.

Thank you both, and thank you for your reports, which, of course, will be made part of the record.

Subject to that risk, it is important, though, that we be clear and prescriptive?

If we are responsible for it, if we made a mistake, we should be held accountable for it.

No, but your people--this is the expression.

There was a turf war going on here, it is obvious.

I guess one of the issues, obviously the big issue we will be looking at in the next two hearings is the dumping of high-risk loans into the financial system as a whole.

Should we legislate? I am tempted, frankly--and I may do it--to just ban negatively amortizing loans.

That could come back again.

Just to make sure I understand that, that is why--what you just said is the access to their information was more critical.

Now, it was the Option ARM loans in 2008 that was one of the major reasons that investors and depositors pulled their money from the bank.

Is there now significant proof that stated income and NINA loans are risky loans?

This is the second in a series of four Subcommittee hearings examining some of the causes and consequences of the 2008 financial crisis.

The culture is set at the top, and this culture here was that these banks are constituents.

Did you have trouble, both of you, tracking OTS' findings and whether WaMu implemented them?

The other thing, and one that I think you all are dealing with in the regulatory reform, is the fact that you are not doing the borrower any favor here, either.

I support very much what you said because I think it's critical that Iran understand the seriousness of our purpose and the unity behind a strong message to them.

We hope that unity that you heard here, and the American people will hopefully hear from this committee and this Congress, will help you in your efforts to gain support internationally for what you're trying to do.

It's also important that Iran hear a very strong, unified message about Congress standing behind strong measures.

We are talking about these emails, Mr. Killinger.

I just wanted to go over the numbers.

You made reference to the subprime market going down. Option ARMs are prime. They are not subprime, right? They are supposed to be prime mortgages. Isn't that correct?

You had all this evidence that there was fraud in various offices of WaMu. Why was that not set up for WaMu's loans?

I do not know how a bank can possibly operate with credibility with this kind of problem, this kind of fraud in its midst.