Fannie and Freddie Were a Part of the Puzzled Problem (Rep. Elijah Cummings)

Fannie May and Freddie Mac were so busy trying to make a profit, particularly it seems like after 2004, that they had warnings that these securities were not sound and they had a lot of red flags but they didn’t halt purchasing them. I think that played a role in many of the problems that we’re experiencing today in our financial markets. As I said in the hearing Tuesday, there were a lot of people involved in this process and I think it’s a mistake to put more blame on Freddie Mac and Fannie May than they deserve. I think they were a part of the puzzled problem.

The other thing that I was impressed with was when Franklin Raines said there were basically three things we need to do. We need to have serious regulations, we need to come up with ways of more effectively protecting consumers, and we need to address the issue of restructuring loans. It seems like Secretary Paulson and others who could effect those kind of decisions are putting particularly the restructuring of loans on the backburner, and if not on the backburner, off the stove completely.