US legislators lashed out yesterday at former chief executives of Fannie Mae and Freddie Mac, the collapsed mortgage financiers, saying they took risks despite warnings and made 'reckless bets'.
Henry Waxman, the chairman of the House of Representatives oversight committee, cited internal documents that, he said, showed the companies made “irresponsible investments that are now costing federal taxpayers billions”.
Yesterday’s hearing into the failures of Fannie and Freddie, which were put in government conservatorship in September, is the latest in a series by the oversight committee on the causes of the financial crisis.
The committee obtained nearly 400,000 documents from Fannie and Freddie, Mr Waxman said. In particular, he pointed to a confidential Fannie Mae presentation, dated June 2005, that discussed the “strategic crossroads” faced by the company.