Fannie Mae and Freddie Mac, Former Executives

Dec 9, 2008

U.S. House of Representatives House Committee Oversight and Government Reform

The House Oversight and Government Reform Committee held a hearing on the financial collapse of Fannie Mae and Freddie Mac, their takeover by the federal government and their role in the financial crisis. Former chief executive officers of the companies testified about company operations and decision making, electronic correspondence with risk .. Read More
The House Oversight and Government Reform Committee held a hearing on the financial collapse of Fannie Mae and Freddie Mac, their takeover by the federal government and their role in the financial crisis. Former chief executive officers of the companies testified about company operations and decision making, electronic correspondence with risk managers about investments in the subprime mortgage markets, and lessons learned from poor decisions about past investments.

4 hours, 11 minutes | 723 Views

SHARE

  • SEND VIDEO
  • POST VIDEO TO FACEBOOK
  • BOOKMARK VIDEO

EMBED THIS VIDEO

Copy the code below and paste it into your website:

MORE OPTIONS

Change Size

TRANSCRIPT

TIME SPEAKER TEXT
00:00:04 Unidentified Speaker A HEARING ON MORTGAGE LENDERS FANNIE MAE AND FREDDIE MAC, BOTH COMPANIES KNOWN AS GOVERNMENT SPONSORED...
00:00:43 Waxman, HenryU.S. Representative WE HAVE EXAMINED THE BANKRUPTCY OF LEHMAN BROTHERS, THE FALL OF AIG, AND THE ROLE OF CREDIT RATING...
00:10:12 Issa, DarrellU.S. Representative THANK YOU, MR. CHAIRMAN. I WOULD ASK UNANIMOUS CONSENT THAT MY COLLEAGUES FROM FINANCIAL-SERVICES...
00:10:27 Waxman, HenryU.S. Representative WITHOUT OBJECTION THAT WILL BE THE ORDER.
00:10:29 Issa, DarrellU.S. Representative I ALSO ASK FOR UNANIMOUS CONSENT THAT DOCUMENTS PRODUCED PURSUANT TO THE REQUEST BY THE COMMITTEE,...
00:10:45 Waxman, HenryU.S. Representative ANY PROBLEMS, SWEETHEART? CAN WE JUST LOOK AT THE DOCUMENTS FIRST?
00:10:57 Waxman, HenryU.S. Representative BUT HOLD BACK THE REQUEST, WE WANT TO BE CERTAIN.
00:11:03 Issa, DarrellU.S. Representative CERTAINLY, AND BEFORE BEGIN, MR. CHAIRMAN, ON BEHALF OF THE RANKING MEMBER TOM DAVIS WHO AS YOU KNOW...
00:12:13 Mica, JohnU.S. Representative WOULD YOU YIELD TO ME FOR A SECOND?
00:12:16 Mica, JohnU.S. Representative ONE OF THE REASONS MR. WAXMAN IS PROBABLY SUCH A POSITION ON FINANCIAL-SERVICES -- I'M SORRY, ENERGY...
00:13:04 Issa, DarrellU.S. Representative THANK YOU.
00:13:08 Waxman, HenryU.S. Representative YOUR TIME HAS EXPIRED. [APPLAUSE]
00:13:15 Issa, DarrellU.S. Representative THANK YOU FOR SCHEDULING THIS IMPORTANT HEARING AND THANK YOU AGAIN FOR THE SECOND PANEL OF EXPERT...
00:21:44 Waxman, HenryU.S. Representative THANK YOU, MR. ISSA. I AM PLEASED TO INTRODUCE OUR WITNESSES. WE HAVE THE FORMER CEO OF FREDDIE MAC...
00:23:01 Waxman, HenryU.S. Representative DO YOU SOLEMNLY SWEAR THAT THE TESTIMONY YOU'VE BEFORE THE COMMITTEE WILL BE THE TRUTH, THE WHOLE...
00:23:56 Syron, Richard F.Chairman and CEO THANK YOU, CHAIRMAN WAXMAN AND MEMBERS OF THE COMMITTEE.
00:24:08 Syron, Richard F.Chairman and CEO THANK YOU, IS THAT BETTER? THANK YOU, CHAIRMAN OF WAXMAN. GOOD MORNING. I APPRECIATE THE OPPORTUNITY...
00:30:41 Waxman, HenryU.S. Representative THANK YOU, MR. DANIEL MUDD?
00:30:45 Mudd, Daniel H.President and CEO MR. CHAIRMAN, REP ISSA, AND MEMBERS OF THE COMMITTEE, THANK YOU ALL FOR THE OPPORTUNITY TO APPEAR...
00:35:49 Waxman, HenryU.S. Representative IT THANK YOU, MR. DANIEL MUDD.
00:35:52 Brendsel, Leland C.Chief Executive Officer THANK YOU. I WAS FORMERLY THE CHAIRMAN AND A CHIEF EXECUTIVE OFFICER OF THE FEDERAL HOME LOAN MORTGAGE...
00:41:55 Waxman, HenryU.S. Representative THANK YOU, THE MR.BRENDSEL. LET'S WAIT A SECOND FOR BELL TO STOP. OK, PLEASE GO AHEAD.
00:42:09 Raines, Franklin D.Chairman and CEO SIRS, MY NAME IS FRANKLIN RAINES AND I WOULD LIKE TO THANK THE CHAIRMAN FOR ACCEPTING MY LONGER WRITTEN...
00:48:00 Waxman, HenryU.S. Representative THANK YOU, WE APPRECIATE YOUR TESTIMONY. BEFORE WE GO TO QUESTIONS BY MEMBERS OF THE COMMITTEE I WOULD...
00:48:43 Tierney, JohnU.S. Representative BEFORE I BEGIN OF LIKE TO TAKE A MOMENT AND APPRECIATE YOUR SERVICE YEAR'S GERMAN. A SHARE ISSA THE...
00:49:25 Tierney, JohnU.S. Representative THANK YOU ALL FOR BEING HERE THIS MORNING AND WORKING WITH US ON THIS. DANIEL MUDD YEAR, A LIKE TO...
00:50:38 Mudd, Daniel H.President and CEO YES.
00:50:42 Tierney, JohnU.S. Representative BEEN NEXTSLIDE SO THAT WE ARE AT A STRATEGIC CROSSROADS AND WE FACE TWO CHOICES. THE NEXT SLIDE SHOWS...
00:54:38 Mudd, Daniel H.President and CEO NO, SIR. WHAT I WOULD POINT TO ON THIS SLIDE IS THE PHRASE THAT SAYS WE NEED TO [UNINTELLIGIBLE] ...
00:55:55 Unidentified Speaker IN
00:56:13 Mudd, Daniel H.President and CEO GOING THROUGH 85% OF THE BOOK AT FANNIE MAE WAS STANDARD LOANS THAT HAD BEEN DONE THROUGHOUT TIME....
00:56:46 Tierney, JohnU.S. Representative YOU DID NOT REALLY GET ANY CREDIT, DID YOU, BECAUSE BY MIAMI'S DAN AND I GOT OUT RATIFIED BY THE BASIS...
00:57:04 Mudd, Daniel H.President and CEO IT WOULD DEPEND ON THE ACTUAL CHARACTER OF THE LOAN MEETING THE SOCIO-ECONOMIC CATEGORY THAT WOULD...
00:58:09 Tierney, JohnU.S. Representative 2005 IS WHEN YOU DECIDED TO GO IN HAVE BUT -- MORE HEAVILY, CORRECT?
00:58:16 Mudd, Daniel H.President and CEO WE DECIDED TO EXAMINE THE MARKET MORE CAREFULLY. IN 2004 WE WERE DOING A RATE OF 63 BILLION. IN 2006...
00:58:34 Tierney, JohnU.S. Representative THIS YEAR, SUBSTANTIALLY THE LARGEST PART OF YOUR LOSSES, THOSE LOANS, CORRECT? I AM NOT COMPLETELY...
00:59:06 Tierney, JohnU.S. Representative THE FAX SEEM TO INDICATE THAT YOU BEAR SOME RESPONSIBILITY FOR AGGRAVATING IT. SOME RESPONSIBILITY...
00:59:28 Issa, DarrellU.S. Representative THANK YOU. MR. CHAIRMAN, I SEEM TO FIND THAT ALL FOUR OF THEM SEEM TO BE IN THE NILE THAT FANNIE AND...
01:01:01 Mudd, Daniel H.President and CEO WHAT I WAS HOPING TO DESCRIBE WAS THAT THE LOANS EXISTED IN A SPECTRUM AT THE HEART AND SOUL --
01:01:09 Issa, DarrellU.S. Representative PLEASE PULL YOUR MICROPHONE CLOSER. X B MARKET OPERATES IN CONCENTRIC CIRCLES AROUND THAT.
01:01:24 Issa, DarrellU.S. Representative WHAT I WANT TO GET TO TODAY FOR THE INDEPENDENT COMMISSION AND ALL THIS YEAR THAT WILL TRAVEL THROUGH...
01:02:09 Mudd, Daniel H.President and CEO THE WAY THAT I WOULD ANSWER THE QUESTION IS THAT THE COMBINATION OF FEATURES IN THE LOAN DEFINES THE...
01:02:34 Issa, DarrellU.S. Representative RELATIVELY FAIR FOR THOSE OF US WHO DO NOT DO THIS EVERY DAY THAT THERE IS A DISTINCTION WITHOUT A...
01:03:15 Mudd, Daniel H.President and CEO I BELIEVE THAT THE MOST LIKELY SCENARIO IS THAT THE VARIABLE FEATURES AGGRAVATED RISKS IN THE LOW,...
01:03:25 Issa, DarrellU.S. Representative MR. RAINES, IN YOUR TESTIMONY YOU SAID THAT FANNIE MAE TO NOT INCREASE SIGNIFICANTLY TO THE HOUSING...
01:03:54 Issa, DarrellU.S. Representative ITH THE FAILURE TO NOT VERIFY AND COME NOT BE A LEADING PAUL -- LEADING REASON OF WHY THE DEFAULT,...
01:05:13 Raines, Franklin D.Chairman and CEO FRAUD, PEOPLE DID NOT TELL THE TRUTH ABOUT THEIR ASSETS OR INCOME. THEY OBTAINED MORTGAGES THAT THEY...
01:07:01 Issa, DarrellU.S. Representative IS YOUR MY CONTACTS I WILL TAKE ALL THE YES ANSWERS FIRST.
01:07:07 Brendsel, Leland C.Chief Executive Officer I THINK THE FAILURE TO UNDERWRITE A MORTGAGE PROPERLY IS CERTAINLY AT THE CORE OF WHAT COULD BE A...
01:08:02 Issa, DarrellU.S. Representative WHICH YOU CONCUR WITH THAT?
01:08:06 Raines, Franklin D.Chairman and CEO I CONCUR WITH WHAT YOU JUST SAID. UNDERWRITING STANDARDS COULD HAVE AVOIDED MANY OF THE LOSSES WE...
01:08:25 Issa, DarrellU.S. Representative WE ARE LOOKING BACK TO MAKE SURE THIS DOES NOT HAPPEN AGAIN. GENERALLY THOSE ARE THE LESSONS WE NEED...
01:08:38 Mudd, Daniel H.President and CEO IF YOU COULD GO BACK AND LOOK AT THE LOANS IN HINDSIGHT AND PICK UP THE ONE SO WERE DELINQUENT OR...
01:08:52 Issa, DarrellU.S. Representative THANK YOU.
01:09:00 Waxman, HenryU.S. Representative THE GENTLEMAN IS RECOGNIZED FOR FIVE MINUTES.
01:09:06 Towns, EdolphusU.S. Representative THANK YOU, MR. CHAIRMAN. LET ME SAY IT HAS BEEN A DELIGHT WORKING WITH YOU. WE HOPE TO WORK WITH YOU...
01:10:28 Syron, Richard F.Chairman and CEO SIR, I THINK THAT THE MAIN REASON FOR THE PROBLEMS WITH FREDDIE MAC AND FANNIE MAE, THESE WERE ORGANIZATIONS...
01:11:20 Mudd, Daniel H.President and CEO MR. MUDD, I WOULD JUST OBSERVE THAT WHEN THE MARKET GOES DOWN, IS THE FOLKS CLOSEST TO THE MARGIN...
01:12:04 Towns, EdolphusU.S. Representative MR. BRENDSEL?
01:12:09 Brendsel, Leland C.Chief Executive Officer I WAS CEO OF FREDDIE MAC FOR A VERY LONG TIME. I CANNOT RECALL EVER BEING FORCED TO MAKE A PURCHASE...
01:12:34 Towns, EdolphusU.S. Representative MR. RAINES?
01:12:38 Raines, Franklin D.Chairman and CEO I NOW BELIEVE POOR PEOPLE ARE THE CAUSE OF THE CURRENT FINANCIAL CRISIS, NOR DO I BELIEVE DEFAULTS...
01:13:27 Towns, EdolphusU.S. Representative LET'S FACE IT. WE DO HAVE A MESS. WHAT DO WE DO NOW? WHAT YOU PROPOSE? MR. SYRON?
01:13:41 Syron, Richard F.Chairman and CEO EXCUSE ME, SIR. I THINK WHAT WE NEED TO DO -- IF YOU WANT TO HAVE LONG-TERM, FIXED-RATE MORTGAGES,...
01:14:23 Towns, EdolphusU.S. Representative MR. MUDD?
01:14:28 Mudd, Daniel H.President and CEO THERE ARE THREE TIERS OF HOMEOWNERS OUT THERE NOW. THERE ARE FOLKS WHO WERE CONTINUING TO MAKE PAYMENTS...
01:15:42 Towns, EdolphusU.S. Representative MR. CHAIRMAN, I REALIZE MY TIME IS EXPIRED. CAN I ASK ONE QUESTION?
01:15:50 Waxman, HenryU.S. Representative YES, YOUR TIME IS EXPIRED TO ASK QUESTIONS, BUT NOT FOR THE PANEL TO ANSWER THEM. WE WILL HEAR FROM...
01:15:57 Brendsel, Leland C.Chief Executive Officer THANK YOU. TO IS YOUR QUESTION, IN AGREEMENT WHIFFS MR. MUDD, I THINK WE NEED TO ADDRESS TAKING ACTION...
01:17:10 Brendsel, Leland C.Chief Executive Officer VEN SPOTTY REGULATION OVERTIME, THEY NEED TO LOOK AT HOW THE ORIGINATION PRACTICES WORK. PARTS THAT...
01:18:21 Waxman, HenryU.S. Representative MR. RAINES?
01:18:26 Raines, Franklin D.Chairman and CEO I AGREE WITH MUCH OF WHAT HAS BEEN SAID. I IT THINK THERE ARE FOUR, FIVE STEPS THAT NEED TO BE TAKEN....
01:20:54 Towns, EdolphusU.S. Representative THANK YOU.
01:20:57 Waxman, HenryU.S. Representative THANK YOU, MR. TOWNS. I WOULD LIKE TO ASK EVERYONE IF YOU HAVE A QUESTION, ASK AT THE BEGINNING, RATHER...
01:21:11 Mica, JohnU.S. Representative THANK YOU, MR. CHAIRMAN. WE HAVE BEFORE US SOME OF THE PERPETRATORS OF THE FINANCIAL MELTDOWN OF OUR...
01:25:58 Raines, Franklin D.Chairman and CEO THE NUMBER IS ESTIMATED AT $90 MILLION.
01:26:01 Mica, JohnU.S. Representative AND UNDER YOUR LEADERSHIP, SOME OF THESE FACTORS HAVE BEEN A FUDGE. FIRST OF ALL, THE TWO FELLOWS...
01:26:35 Raines, Franklin D.Chairman and CEO THAT IS WHAT I AM GIVEN. THE NUMBER I THINK YOU ARE REFERRING TO IS A RESULT OF A SETTLEMENT --
01:26:45 Mica, JohnU.S. Representative IT WAS A NEAT SETTLEMENT, TOO. YOU AGREED TO DONATE SOME OF YOUR STOCK RATHER THAN TAKE THE PROCEEDS...
01:27:00 Mica, JohnU.S. Representative THAT WAS PRETTY CLEVER. YOU HAD ABOUT $1.5 MILLION IN STOCKS. HE DONATED THAT, AND YOU TOOK AN EXEMPTION...
01:27:13 Waxman, HenryU.S. Representative THE GENTLEMAN'S TIME IS EXPIRED.
01:27:17 Mica, JohnU.S. Representative YOU DID NOT FILE A TAX RETURN FOR 2008?
01:27:19 Raines, Franklin D.Chairman and CEO 2008, AND YET.
01:27:22 Waxman, HenryU.S. Representative [INAUDIBLE]
01:27:28 Waxman, HenryU.S. Representative OK.
01:27:33 Mica, JohnU.S. Representative I KNOW YOU DID. THE SETTLEMENT -- YOU REALLY DIDN'T PAY ANYTHING. YOU PROBABLY TOOK A TAX DEDUCTION...
01:27:53 Raines, Franklin D.Chairman and CEO THERE WAS NO FUN.
01:27:58 Mica, JohnU.S. Representative THERE WAS A $3 MILLION THAT WAS PAID BY THE INSURANCE. YOU CAN CALL IT WHAT YOU LIKE. THE LAST THING,...
01:28:47 Raines, Franklin D.Chairman and CEO FANNIE MAE DID HAVE LOBBYIST DURING THAT PERIOD, YES SIR.
01:28:55 Mica, JohnU.S. Representative AND FIND DOCUMENTS THAT SHOW THAT YOU HAD A PART IN KILLING THIS LEGISLATION AWARE REGULATED FANNIE...
01:29:03 Waxman, HenryU.S. Representative THE GENTLEMAN'S TIME IS EXPIRED.
01:29:08 Waxman, HenryU.S. Representative THERE IS A PENDING QUESTION, AND THE GENTLEMAN HAS AN OPPORTUNITY TO ANSWER IT.
01:29:11 Raines, Franklin D.Chairman and CEO I HAVE NO IDEA WHAT DOCUMENTATION YOU HAVE. FANNIE MAE, LIKE ANY OTHER CORPORATION ON BY SHAREHOLDERS,...
01:29:28 Waxman, HenryU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED.
01:29:31 Kanjorski, Paul E.U.S. Representative THANK YOU, MR. CHAIRMAN. MAYBE I SHOULD MAKE AN OBSERVATION. I THOUGHT THE PURPOSE OF THIS HEARING...
01:32:18 Mudd, Daniel H.President and CEO IF THE ANALOGY IS THAT YOU'RE INSURING AGAINST HURRICANES IN HURRICANES HIT ONE-THIRD OF THE COUNTRY,...
01:32:31 Kanjorski, Paul E.U.S. Representative WE ALL KNOW THAT. THAT WAS BROUGHT OUT IN TESTIMONY FOUR OR FIVE YEARS AGO. IS THAT CORRECT?
01:32:39 Mudd, Daniel H.President and CEO IT WAS DISCUSSED AND DISCLOSED. YES.
01:32:42 Raines, Franklin D.Chairman and CEO I AGREE WITH YOUR CHARACTERIZATION THAT IT WAS WELL KNOWN A SIGNIFICANT DECLINE IN HOUSING PRICES...
01:33:05 Kanjorski, Paul E.U.S. Representative WE ARE THRUSTING AROUND RIGHT NOW TO FIND SOME UNDERPINNING TO REAL-ESTATE VALUATION. WE WANT TO SUSTAIN...
01:34:16 Raines, Franklin D.Chairman and CEO WITHOUT THE BENEFIT OF A LOT OF STAFF RESOURCES, IT IS MY VIEW AND I THINK THE VIEW OF AN NUMBER OF...
01:35:05 Kanjorski, Paul E.U.S. Representative HOW CAN WE GET THIS DONE QUICKLY AND BY WHOM?
01:35:10 Raines, Franklin D.Chairman and CEO I THINK THE BEST RESOURCES THAT ARE AVAILABLE TO THE CONGRESS ARE UNDERSTANDING THE HOUSING MARKET...
01:35:32 Kanjorski, Paul E.U.S. Representative COULD WE TAKE THAT ACTION, EVEN THOUGH THE REAL ESTATE MARKET HAS NOT CEASED TO DEFLATE? ; AND ANY...
01:35:53 Raines, Franklin D.Chairman and CEO I THINK YOU CAN START NOW. WE NEED TO LOOK AT THOSE PROGRAMS THAT ARE AVAILABLE TO MOP -- TO BE MODIFIED....
01:36:23 Waxman, HenryU.S. Representative THANK YOU. YOUR TIME IS EXPIRED.
01:36:27 Burton, Danny "Dan" LeeU.S. Representative THANK YOU, MR. CHAIRMAN. MR. RAINES, HAVE YOU EVER HEARD THE TERM FRIEND OF ANGELO PROGRAM?
01:36:39 Raines, Franklin D.Chairman and CEO I HAVE HEARD THAT IN THE NEWSPAPERS.
01:36:43 Burton, Danny "Dan" LeeU.S. Representative HAVE YOU HAD A HOME LOAN FROM
01:36:44 Raines, Franklin D.Chairman and CEO YES.
01:36:46 Burton, Danny "Dan" LeeU.S. Representative WAS GIVEN TO YOU THROUGHOUT THE TERM FRIEND OF ANGELO?
01:36:52 Raines, Franklin D.Chairman and CEO NO.
01:36:55 Burton, Danny "Dan" LeeU.S. Representative SO YOU DID NOT GET ANY PREFERENTIAL TREATMENT?
01:36:58 Raines, Franklin D.Chairman and CEO NO, I DID NOT.
01:37:02 Burton, Danny "Dan" LeeU.S. Representative SO YOU PAY THE SAME RATE AND THE SAME CONDITIONS AS ANYBODY ELSE?
01:37:07 Raines, Franklin D.Chairman and CEO TO HAVE THE SAME CREDIT PROFILE, THE SAME LOAN DEVALUES AS I DID. YES, SIR. LET ME CHECK ON THAT...
01:37:25 Raines, Franklin D.Chairman and CEO I AM UNAWARE OF ANY PREFERENTIAL TREATMENT GIVEN TO ME BY COUNTRYWIDE.
01:37:29 Burton, Danny "Dan" LeeU.S. Representative WOULD BE POSSIBLE TO GET COPIES OF THE MORTGAGE PAPERS THAT YOU HAD MADE WITH COUNTRYWIDE?
01:37:36 Raines, Franklin D.Chairman and CEO I AM SURE COUNTRYWIDE HAS COPIES.
01:37:39 Burton, Danny "Dan" LeeU.S. Representative YOU HAVE COPIES?
01:37:41 Raines, Franklin D.Chairman and CEO I DO NOT KNOW. I NO LONGER OWN THAT PROPERTY.
01:37:47 Burton, Danny "Dan" LeeU.S. Representative I KEEP MY DOCUMENTS FOR A LONG TIME. COULD YOU PROVIDE THOSE TO THE COMMITTEE FOR THE RECORD?
01:37:54 Raines, Franklin D.Chairman and CEO I WILL LOOK FOR THEM, AND I CAN FIND THEM, I WILL BE HAPPY TO.
01:37:56 Burton, Danny "Dan" LeeU.S. Representative THANK YOU VERY MUCH. DID YOU DISCUSS WITH ANGELO MOSELLO ABOUT ANYONE WHO WOULD BE CANADA'S FOR THIS...
01:38:17 Raines, Franklin D.Chairman and CEO NO. NEVER.
01:38:22 Raines, Franklin D.Chairman and CEO YES.
01:38:27 Burton, Danny "Dan" LeeU.S. Representative NONE OF THE U.S. CENTERS FOR CONGRESSMAN THAT YOU KNOW OF, YOU NEVER DISCUSSED THE LOANS WITH THEM?...
01:38:31 Raines, Franklin D.Chairman and CEO NO, I NEVER DID THAT.
01:38:35 Burton, Danny "Dan" LeeU.S. Representative OK. MR. RAINES AND MR. MUDD, WE OF THE SEPTEMBER 2004 MEMO THAT DISCUSSES FANNIE MAE, A CHIEF EXECUTIVE...
01:40:33 Burton, Danny "Dan" LeeU.S. Representative IN 2004, THIS MAN SAYS THERE WAS A REAL PROBLEM. THERE WAS LIKELY TO BE A BOSTON HOUSING MARKET. ...
01:40:57 Mudd, Daniel H.President and CEO BEGINNING IN 2005, THE PURCHASES OF SUBPRIME SECURITIES ACTION WENT DOWN FROM 34.5 BILLION TO 16.3...
01:41:12 Burton, Danny "Dan" LeeU.S. Representative PART ME FOR INTERRUPTING, BUT AT THAT POINT, WAS THERE A REDEFINITION OF SUBPRIME TO YOUR UNDERWRITING...
01:41:38 Mudd, Daniel H.President and CEO THE UNDERWRITINGS STANDARDS CHANGE CONSTANTLY IN RESPONSE TO THE MARKET.
01:41:43 Burton, Danny "Dan" LeeU.S. Representative DURING THE TIME YOU'RE IN CHARGE, DID THE UNDERWRITING CHANGE DRAMATICALLY SO THAT'S THE SUBPRIME...
01:41:54 Mudd, Daniel H.President and CEO WE DID OUR BEST OF THE TIME TO BALANCE OUT BOTH SIDES OF THE EQUATION WITH RESPECT TO RISK, WHICH...
01:42:05 Burton, Danny "Dan" LeeU.S. Representative YOU MADE UNDERWRITING CHANGES. YOU WERE IN CHARGE OF THESE, WERE YOU NOT?
01:42:10 Mudd, Daniel H.President and CEO I WAS CHIEF EXECUTIVE OFFICER, SO I WAS RESPONSIBLE, YES.
01:42:16 Burton, Danny "Dan" LeeU.S. Representative DID YOU CHANGE THE UNDERWRITING REQUIREMENTS?
01:42:19 Mudd, Daniel H.President and CEO I THINK IS MORE TO UNDERSTAND THERE ARE TWO SIDES TO THE UNDERLYING INFLATION. ONE IS THE RISK SIDE...
01:42:53 Burton, Danny "Dan" LeeU.S. Representative CAN ALLOW EXTRA TIME? CAN I HAVE ONE COMMENT, MR. CHAIRMAN?
01:43:00 Waxman, HenryU.S. Representative YOUR TIME HAS EXPIRED.
01:43:04 Burton, Danny "Dan" LeeU.S. Representative HOW ABOUT MR. KANJORSKI?
01:43:08 Waxman, HenryU.S. Representative HE DID NOT HAVE EXTRA TIME. I AM SORRY. I WOULD LIKE TO ASK FOR UNANIMOUS CONSENT OF THE AUM -- THAT...
01:43:30 Maloney, CarolynU.S. Representative THANK YOU, MR. CHAIRMAN. YOU HAVE BEEN A SPECTACULAR CHAIRMAN. IT HAS BEEN AN HONOR TO SERVE ON THIS...
01:45:57 Waxman, HenryU.S. Representative WITHOUT OBJECTION.
01:46:03 Maloney, CarolynU.S. Representative MR. SYRON, IS IT NOT TRUE THAT YOUR CHIEF RISK OFFICER ADVISE YOU NOT TO BUY THESE NO DOCUMENTATION...
01:46:14 Syron, Richard F.Chairman and CEO FIRST OF ALL, I DO NOT BELIEVE I HAVE SEEN THOSE MEMOS. I AM NOT SURE.
01:46:21 Maloney, CarolynU.S. Representative WE WILL BE THAT -- WE WILL BE GLAD TO GIVE THEM TO YOU. DID HE ADVISE YOU TO BUY THOSE
01:46:25 Syron, Richard F.Chairman and CEO NO.
01:46:26 Maloney, CarolynU.S. Representative THEN HE HAS PERJURED HIMSELF. DID HE TELL YOU TO BUY THE LOANS?
01:46:32 Syron, Richard F.Chairman and CEO NO, HE DID NOT.
01:46:33 Maloney, CarolynU.S. Representative DID HE ADVISE YOU THAT THEY COULD BE RISKY?
01:46:36 Syron, Richard F.Chairman and CEO YES, HE DID.
01:46:38 Maloney, CarolynU.S. Representative I ONLY HAVE FOUR MINUTES. FURTHERMORE, I WOULD LIKE TO SAY HE WAS RIGHT. UNDER YOUR LEADERSHIP, FREDDIE...
01:48:32 Syron, Richard F.Chairman and CEO IF YOU GO BACK AND LOOK AT THE RECORDS, AND I THINK YOU SAID THIS WAS 2000 --
01:48:42 Maloney, CarolynU.S. Representative 2003 TO 2005.
01:48:46 Syron, Richard F.Chairman and CEO THERE WAS A LONG DEBATES WITH PEOPLE ON BOTH SIDES OF WHAT SHOULD BE DONE A ALT A. -- WHAT SHOULD...
01:49:10 Maloney, CarolynU.S. Representative WITH ALL DUE RESPECT --
01:49:11 Waxman, HenryU.S. Representative EXCUSE ME. YOUR QUESTION IS PENDING. A GENTLEMAN SHOULD ANSWER, AND THEN WE HAVE TO MOVE ON. YOUR...
01:49:30 Maloney, CarolynU.S. Representative AND TO BUY THE RISKY LOANS --
01:49:31 Waxman, HenryU.S. Representative THAT IS THE QUESTION.
01:49:36 Syron, Richard F.Chairman and CEO FIRST OF ALL, THE RISK MANAGER WAS FIRED FOR A VARIETY OF REASONS, PRIMARILY FOR HIS HAVING A VIEW...
01:50:15 Maloney, CarolynU.S. Representative THE RIGHT DECISION --
01:50:18 Waxman, HenryU.S. Representative YOUR TIME IS EXPIRED. MR. WESTMORELAND?
01:50:22 Westmoreland, Lynn A.U.S. Representative THANK YOU, MR. CHAIRMAN. I'M GOING TO ASK BOTH OF YOU THIS QUESTION. WHAT WAS YOUR SALARY FROM 2003...
01:50:40 Syron, Richard F.Chairman and CEO MY TOTAL SALARY WAS ABOUT $4 MILLION A YEAR, AND I HAVE PENSION RIGHTS THAT ARE WORTH THE NEIGHBORHOOD...
01:51:01 Syron, Richard F.Chairman and CEO NO. THE PRESENT VALUE ACCORDING TO HOW LONG I LIVE.
01:51:09 Westmoreland, Lynn A.U.S. Representative THE SAME QUESTION TO YOU. YOUR TOTAL COMPENSATION?
01:51:15 Mudd, Daniel H.President and CEO I HAVE A DIFFERENT NUMBER, SO IF I CAN MAKE AN ESTIMATED TO YOUR REQUEST, IT BE IN THE VICINITY OF...
01:51:34 Westmoreland, Lynn A.U.S. Representative TOTAL? SOMEWHERE NEAR $8 MILLION?
01:51:39 Mudd, Daniel H.President and CEO I WOULD BE HAPPY TO SUPPLY THE NUMBERS.
01:51:42 Westmoreland, Lynn A.U.S. Representative DO YOU HAVE A PENSION? ARE YOU ELIGIBLE FOR PENSION?
01:51:46 Mudd, Daniel H.President and CEO I BELIEVE SO, YES.
01:51:51 Westmoreland, Lynn A.U.S. Representative WHAT WOULD THAT PENSION BE?
01:51:52 Mudd, Daniel H.President and CEO I CANNOT BE PRECISE. I WOULD BE HAPPY TO GET BACK TO YOU.
01:51:57 Westmoreland, Lynn A.U.S. Representative TO THIS PENSION COME FROM JUST TO THREE YEARS OF SERVICE, OR HAD YOU BEEN --
01:52:04 Mudd, Daniel H.President and CEO NO, I HAD BEEN WITH THE COMPANY GOING BACK TO 2005.
01:52:08 Westmoreland, Lynn A.U.S. Representative OK. YOU HAVE THEM WITH THE COMPANY FOUGHT FOR EIGHT YEARS AND GIVE A PENSION OF SOMEWHERE --
01:52:17 Mudd, Daniel H.President and CEO IF I GET TO A PRECISE NUMBER, RESEARCH IT DRAWS OK -- RESEARCH IT --
01:52:29 Westmoreland, Lynn A.U.S. Representative OK.
01:52:30 Waxman, HenryU.S. Representative IS YOUR MIND ON?
01:52:35 Brendsel, Leland C.Chief Executive Officer WHAT YEARS?
01:52:36 Westmoreland, Lynn A.U.S. Representative 1987 TO 2003.
01:52:40 Brendsel, Leland C.Chief Executive Officer THAT IS A MATTER OF PUBLIC DISCLOSURE.
01:52:42 Westmoreland, Lynn A.U.S. Representative CAN YOU GIVE ME A NUMBER?
01:52:45 Brendsel, Leland C.Chief Executive Officer I WOULD HAVE TO SAY IN THE LAST FEW YEARS, THE AMOUNT DISCLOSED, THAT IS REFLECTED IN STOCK GRANTS...
01:53:07 Westmoreland, Lynn A.U.S. Representative $10 MILLION A YEAR?
01:53:09 Brendsel, Leland C.Chief Executive Officer INCLUDING THE STOCK GRANTS. THIS INCLUDES 2002 AND 2003.
01:53:16 Westmoreland, Lynn A.U.S. Representative THEY GOT NEW JEEP. -- THEY GOT YOU CHEAP.
01:53:27 Westmoreland, Lynn A.U.S. Representative HOW ABOUT A PENSION?
01:53:31 Brendsel, Leland C.Chief Executive Officer I AM ELIGIBLE FOR PENSION.
01:53:34 Brendsel, Leland C.Chief Executive Officer I KNOW IT HAS BEEN SAID -- $90 MILLION. I KNOW YOU HAD EXPLANATION OF THIS. WHAT WAS YOUR TOTAL PACKAGE...
01:53:46 Raines, Franklin D.Chairman and CEO I DO NOT KNOW OF THE TOP OF MY HEAD. I DO NOT KNOW THE TOP OF MY HEAD. NO. I REFER TO IS INCLUDED...
01:53:54 Westmoreland, Lynn A.U.S. Representative OK. YOU HAD 90 MILLION IN THERE -- YOU HAD $90 MILLION IN THERE. THEN HE SAID THERE IS A DISCREPANCY...
01:54:06 Raines, Franklin D.Chairman and CEO ACCEPTING THE NUMBER AS THE BEGINNING POINT, 40% OF THAT HAS BEEN CLAWED BACK AS A RESULT OF THE STOCK...
01:54:27 Westmoreland, Lynn A.U.S. Representative THAT IS STILL GOOD MONEY. THAT IS STILL GOOD MONEY. WHAT KIND OF PENSION?
01:54:34 Raines, Franklin D.Chairman and CEO I AM QUALIFIED FOR PENSION BASE TO MY 11 YEARS AT FANNIE MAE.
01:54:36 Westmoreland, Lynn A.U.S. Representative WHAT WOULD THAT BE? YOU GOT $3 MILLION ONE-YEAR, $400,000.10 YEAR.
01:54:46 Raines, Franklin D.Chairman and CEO MY PENSION IS APPROXIMATELY $1.2 MILLION.
01:54:53 Westmoreland, Lynn A.U.S. Representative $1.2 MILLION IS GOOD MONEY. LET ME SAY THIS -- I AM GLAD I CAME HERE TODAY TO LEARN THAT YOU ALL HAD...
01:55:47 Waxman, HenryU.S. Representative THE GENTLEMAN'S TIME IS EXPIRED. I DO NOT KNOW IF THIS IS A PENDING QUESTION OR NOT.
01:55:55 Brendsel, Leland C.Chief Executive Officer MR. CHAIRMAN, I WOULD LIKE TO RESPOND TO THAT LAST COMMENT. I LEFT FREDDIE MAC IN JUNE OF 2003. FREDDIE...
01:56:13 Waxman, HenryU.S. Representative OK.
01:56:17 Cummings, ElijahU.S. Representative THANK YOU, MR. CHAIRMAN. GENTLEMEN, THANK YOU FOR BEING HERE. . . I THINK BOTH OF THESE COMPANIES ...
01:58:27 Syron, Richard F.Chairman and CEO YES, SIR.
01:58:29 Cummings, ElijahU.S. Representative THANKS USE A NO INCOME, NO ASSET MORTGAGE TO LEND MONEY TO A BORROWER WITHOUT REQUIRING ANY INFORMATION...
01:58:58 Syron, Richard F.Chairman and CEO SIR, IF YOU HAVE INFORMATION ON THE FICO SCORE AND THEY HAVE A STRONG FICO SCORE AND YOU HAVE INFORMATION...
01:59:31 Cummings, ElijahU.S. Representative ARE YOU NOT FAMILIAR WITH MR. RAINES' TESTIMONY BECAUSE WHEN I READ IN HIS WRITTEN TESTIMONY HE SAID...
02:00:19 Syron, Richard F.Chairman and CEO I DON'T HAVE THE MEMO BEFORE ME. I'LL TRY TO ANSWER --
02:00:22 Cummings, ElijahU.S. Representative BRIEFLY. THEY ONLY GIVE ME FIVE MINUTES.
02:00:26 Syron, Richard F.Chairman and CEO OK. I THINK WHAT HAD HAPPENED MARKET HAD MIGRATED AWAY FROM THE TRADITIONAL PRODUCTS THAT WILL FREDDIE...
02:00:41 Cummings, ElijahU.S. Representative LET ME SPECULATE. LET ME TELL YOU WHAT I SPECULATE. I SPECULATED IT WAS ABOUT PROFIT. I SPECULATE...
02:01:13 Syron, Richard F.Chairman and CEO WE ARE AN ORGANIZATION THAT HAD TO DEVELOP BALANCE. AND WE HAD TO BALANCE BETWEEN THE NEEDS OF SAFETY...
02:01:37 Cummings, ElijahU.S. Representative I SEE MY TIME IS UP.
02:01:39 Waxman, HenryU.S. Representative THANK YOU, MR. CUMMINGS. MR. SOUDER.
02:01:42 Souder, Mark EdwardU.S. Representative THANK YOU. I WANT TO FOLLOW UP A LITTLE BIT ON SIMILAR LINE THAT MY FRIEND, MR. CUMMINGS, JUST HAD....
02:03:47 Raines, Franklin D.Chairman and CEO WHAT I WAS SAYING IS THAT FANNIE MAE PROVIDES SERVICE TO LOW, MODERATE, AND MIDDLE INCOME AMERICANS....
02:04:04 Souder, Mark EdwardU.S. Representative IN OTHER WORDS, RAME, I JUST WANT TO MAKE -- RECLAIMING MY TIME, IT WASN'T THE LOWEST HOUSING PORTION...
02:05:58 Syron, Richard F.Chairman and CEO SIR, I WOULD DEBATE WHETHER WE WERE -- THAT THIS MARKET WOULDN'T HAVE DEVELOPED EVEN IF WE WEREN'T...
02:06:11 Souder, Mark EdwardU.S. Representative LET ME ASK A FOLLOW-UP TO THAT. DO YOU BELIEVE THAT FANNIE AND FREDDIE WOULD NOT HAVE GOT INVOLVED...
02:06:46 Syron, Richard F.Chairman and CEO SIR, IN ALL DUE RESPECT I THINK IT WOULD BE SPECULATING ON MY PART WHETHER THE MARKET WOULD HAVE FLATTENED...
02:06:59 Souder, Mark EdwardU.S. Representative YOU DON'T BELIEVE YOU HAD ANY BASIC RESPONSIBILITY FOR THE CRISIS, THAT'S YOUR TESTIMONY? THAT YOU...
02:07:15 Syron, Richard F.Chairman and CEO SIR, I CAN HONESTLY SAY, I'M NOT SAYING WE MADE DE SIGNIFICANCE, WE CERTAINLY DIDN'T, BUT I CAN HONESTLY...
02:07:35 Souder, Mark EdwardU.S. Representative BY TAKING IN --
02:07:36 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED. THANK YOU VERY MUCH. THE JAFMENT OHIO. MR. KUCINICH.
02:07:54 Kucinich, DennisU.S. Representative I THANK THE GENTLEMAN. I'M LISTENING TO MY COLLEAGUE, MR. WESTMORELAND, AND I WANT TO PICK UP ON SOMETHING...
02:10:16 Mudd, Daniel H.President and CEO NO.
02:10:19 Kucinich, DennisU.S. Representative THEN WHY THERE WAS A BUDGET CUT OCCURRING WHILE YOU WERE INVOLVED IN THESE GREAT RISKS WITH BILLIONS...
02:10:30 Kucinich, DennisU.S. Representative BEST RESPONSE IS THE TRUTH. DID SOMEONE TELL YOU TO CUT CREDIT RISK, CUT THE CREDIT RISK OFFICE BUDGET?...
02:10:39 Mudd, Daniel H.President and CEO LET ME READ YOU WHAT I WROTE BACK --
02:10:41 Kucinich, DennisU.S. Representative CAN YOU ANSWER THE QUESTION. WHO TOLD YOU TO CUT THE BUDGET? WHO TOLD YOU TO CUT IT? YOU'RE DEALING...
02:10:57 Mudd, Daniel H.President and CEO THE CUTS IN THE BUDGET THAT APPLIED ACROSS THE COMPANY WERE DRIVEN BY THE FINANCIAL NEED TO DRIVE...
02:11:07 Kucinich, DennisU.S. Representative HOLY SMOKES.
02:11:09 Mudd, Daniel H.President and CEO WE STARTED WITH THE PROCESS.
02:11:11 Kucinich, DennisU.S. Representative ARE YOU LISTENING TO THIS? HE'S CUTTING THE ONE PERSON THAT'S TELLING HIM, HEY, WAIT, YOU'RE GOING...
02:12:15 Mudd, Daniel H.President and CEO WILL I EXPLAIN TO YOU BY READING TO YOU THE RESPONSE TO HIM, REPRESENTATIVE. IT IS NOT FAIR TO TAKE...
02:12:51 Kucinich, DennisU.S. Representative YOU TAKE RESPONSIBILITY FOR THE RISK THAT YOUR COMPANY TOOK YOU IGNORED THE ADVICE OF YOUR CREDIT...
02:13:01 Mudd, Daniel H.President and CEO I FOLLOWED THE PROCESS TO LISTEN TO ALL MY STAFF.
02:13:03 Kucinich, DennisU.S. Representative WHAT DID YOU DO? WHAT DID YOU DO? DID YOU CUT THE BUDGET OF YOUR CREDIT RISK OFFICE?
02:13:11 Mudd, Daniel H.President and CEO JUST LIKE ALL BUDGETS --
02:13:12 Kucinich, DennisU.S. Representative THE ANSWER IS YES.
02:13:13 Mudd, Daniel H.President and CEO WE NEGOTIATED THE RIGHT NUMBER --
02:13:16 Kucinich, DennisU.S. Representative IS THE ANSWER YES OR NO. DID YOU CUT YOUR CREDIT RISK OFFICERS' BUDGET?
02:13:21 Mudd, Daniel H.President and CEO GIVING AN ANSWER YES OR NO TO THE QUESTION WOULD NOT BE ACCURATE.
02:13:24 Kucinich, DennisU.S. Representative CAN YOU ANSWER THE QUESTION?
02:13:26 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED.
02:13:28 Mudd, Daniel H.President and CEO WILL I GIVE YOU AN ACCURATE RESPONSE. THE ANSWER IS BUDGETS ARE DETERMINED AS A RESULT OF A BACK AND...
02:13:54 Kucinich, DennisU.S. Representative YOU'RE TESTIFYING THAT YOU INCREASED HIS BUDGET THAT WHAT YOU'RE TELLING THIS CONGRESS?
02:13:59 Mudd, Daniel H.President and CEO WE NEGOTIATED THE BUDGET THE SAME AS WE DID EVERY YEAR FOR TIME AND MEMORIAL.
02:14:10 Towns, EdolphusU.S. Representative IT'S BEEN A PLEASURE SERVING WITH YOU OVER THE LAST 20 YEARS. IN THE LIGHT WE HAD AN OPPORTUNITY TO...
02:14:17 Shays, ChristopherU.S. Representative I WAS RELUCTANT TO STEP UP BECAUSE I THOUGHT I MIGHT GET TEARY EYED BECAUSE I LOVE THIS COMMITTEE...
02:17:18 Raines, Franklin D.Chairman and CEO I THINK WE HAVE SOME EVIDENCE ON THAT WITH REGARD TO FANNIE MAE'S PORTFOLIO AS I UNDERSTAND IT. THE...
02:17:54 Shays, ChristopherU.S. Representative MR. RAINES, YOU'RE NOT JUST SPEAKING TO THIS COMMITTEE COMMITTEE, ARE YOU SPEAKING TO THE WHOLE FINANCIAL...
02:18:13 Raines, Franklin D.Chairman and CEO IT IS PROVEN IN THE CURRENT CIRCUMSTANCES THAT --
02:18:17 Shays, ChristopherU.S. Representative I'D LIKE A YES OR NO. YES IT WAS OR NO IT WASN'T.
02:18:20 Raines, Franklin D.Chairman and CEO IT HAS WORKED. CONGRESSMAN, IT WORKED WITH REGARD TO THE PORTFOLIO. ON THE CREDIT BUSINESS, IT'S A...
02:18:46 Shays, ChristopherU.S. Representative WHEN WE FINALLY GOT FANNIE AND FREDDIE TO AGREE TO BE UNDER THE 1934 ACT, WE LEARNED THAT BOTH FANNIE...
02:19:13 Raines, Franklin D.Chairman and CEO THE -- AT THIS POINT I DON'T THINK IT MATTERS. FANNIE MAE'S ALREADY REGISTERED WITH THE S.E.C. SO...
02:19:22 Shays, ChristopherU.S. Representative ON THE 1934 ACT.
02:19:23 Raines, Franklin D.Chairman and CEO I UNDERSTAND. I WAS GOING TO GET TO THAT. YOU MENTIONED BOTH ACTS. WITH REGARD TO THE REGISTRATION...
02:19:57 Shays, ChristopherU.S. Representative YOU THINK THAT --
02:19:59 Issa, DarrellU.S. Representative MR. CHAIRMAN, I ASK UNANIMOUS CONSENT THAT MR. SHAYS HAVE JUST ONE ADDITIONAL MINUTE. THANK YOU.
02:20:05 Shays, ChristopherU.S. Representative JUST THE BOTTOM LINE QUESTION. IN OTHER WORDS, THE 33 AND 1934 ACT WERE DESIGNED TO PROTECT THE PUBLIC....
02:20:37 Raines, Franklin D.Chairman and CEO BECAUSE FANNIE MAE IS NOW A REGISTRANT, IT WOULD BE REDUNDANT TO INCLUDE THEM. IF YOU WOULD LIKE TO...
02:20:48 Shays, ChristopherU.S. Representative HOW ABOUT THE 1933 ACT?
02:20:51 Raines, Franklin D.Chairman and CEO THE 1933 ACT AS I SAID I WAS FEARFUL IT WOULD DISRUPT THE MORTGAGE BACKED SECURITIES MARKET. RIGHT...
02:21:02 Shays, ChristopherU.S. Representative THANK YOU.
02:21:04 Clay, William Lacy Jr.U.S. Representative THANK YOU, MR. CHAIRMAN. FANNIE AND FREDDIE LOST A SIGNIFICANT SHARE OF THE SECONDARY MORTGAGE MARKET...
02:22:51 Mudd, Daniel H.President and CEO YES, SIR. THAT WAS AN INTIMATE DISCUSSION IN THE PROCESS AND SO WHEN WE FIRST ENTERED THE SUBPRIME...
02:24:06 Clay, William Lacy Jr.U.S. Representative FANNIE ACTED QUICKLY ON THIS NEW BUSINESS MODEL. FANNIE PURCHASED MORE THAN $200 BILLION IN ALT A...
02:24:37 Mudd, Daniel H.President and CEO WELL, AGAIN SEPARATING OUT THE SUBPRIME AND ALT A, NOW ADDRESSING THE ALT A, CAN YOU LOOK BACK IN...
02:25:18 Mudd, Daniel H.President and CEO CERTAINLY A HIGH PROPORTION OF LOSSES HAS COME OUT OF -- HAS COME OUT OF THE ALT A BOOK, YES. AND...
02:26:06 Clay, William Lacy Jr.U.S. Representative THANK YOU FOR THAT RESPONSE. THE MEMO ALSO SAID WE DISCUSSED ADDITIONAL GROWTH IDEAS THAT WARRANT...
02:26:25 Mudd, Daniel H.President and CEO NO. IT DOESN'T. THAT WASN'T IN FACT THE POLICY, CONGRESSMAN. THE CHALLENGE THAT WE WERE FACING IN...
02:27:18 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED. HE CAN ANSWER THE QUESTION.
02:27:25 Mudd, Daniel H.President and CEO I DIDN'T HEAR THE QUESTION.
02:27:28 Clay, William Lacy Jr.U.S. Representative THE QUESTION WAS YOU TOOK BUNDLES THAT WERE COMBINED WITH GOOD AND BAD MORTGAGES, GOOD AND BAD LOANS?...
02:27:33 Mudd, Daniel H.President and CEO NO. THE PURPOSE OF THAT PROJECT WAS SPECIFICALLY NOT TO TAKE THE LOANS THAT WE WEREN'T COMFORTABLE...
02:27:50 Clay, William Lacy Jr.U.S. Representative THANK YOU.
02:27:52 Unidentified Speaker MR. CHAIRMAN. I APOLOGIZE. COULD I TAKE A BRIEF BREAK?
02:27:58 Towns, EdolphusU.S. Representative SURE.
02:28:01 Unidentified Speaker MR. CHAIRMAN, WHILE THAT'S OCCURRING MAY I --
02:28:03 Towns, EdolphusU.S. Representative I'M SORRY?
02:28:05 Unidentified Speaker MAY DO I THE SAME THING?
02:28:07 Towns, EdolphusU.S. Representative YOU MAY. WHY DON'T WE TAKE A FIVE-MINUTE RECESS. OK. [CAPTIONING PERFORMED BY NATIONAL CAPTIONING...
02:28:33 Towns, EdolphusU.S. Representative WE WILL NOW RECOGNIZE THE GENTLEMAN FROM OHIO, MR. TURNER, FOR FIVE MINUTES.
02:28:40 Turner, Michael R.U.S. Representative THANK YOU, MR. CHAIRMAN. MR. RAINES, I WANT TO READ YOU A PORTION OF YOUR WRITTEN TESTIMONY. YOU...
02:30:23 Raines, Franklin D.Chairman and CEO I THINK YOU HAVE A VERY LEGITIMATE POINT AS TO WHAT STAGE ARE YOU PROVIDING NECESSARY FUNDS TO THE...
02:31:46 Turner, Michael R.U.S. Representative JUST A SECOND. THEY DID KNOW. THEY DID KNOW BOTH FROM THE INFORMATION THAT WAS BEING RECEIVED ON...
02:34:06 Syron, Richard F.Chairman and CEO A CUPPLE OF POINTS. FIRST I -- A CUPPLE -- A COUPLE OF POINTS. FIRST I THINK YOU ARE CORRECT EVEN...
02:34:22 Turner, Michael R.U.S. Representative DIDN'T YOU HAVE A ROLE IN THAT? DIDN'T YOU HAVE A ROLE IN THAT? DIDN'T YOU HAVE AN ABILITY TO RAISE...
02:34:41 Syron, Richard F.Chairman and CEO WE DIDN'T HAVE ANY CAPACITY TO CONSTRAIN THE GROWTH OF THAT MARKET. IS WHAT I WOULD SAY. THE SECOND...
02:35:09 Turner, Michael R.U.S. Representative THANK YOU, MR. CHAIRMAN.
02:35:16 Towns, EdolphusU.S. Representative TIME HAS EXPIRED. THE GENTLEMAN FROM MASSACHUSETTS, MR. LYNCH.
02:35:19 Lynch, Stephen F.U.S. Representative THANK YOU, MR. CHAIRMAN. BRIEFLY, I WANT TO CONGRATULATE CHAIRMAN WAXMAN IN HIS ABSENCE FOR HIS GREAT...
02:35:51 Towns, EdolphusU.S. Representative WITHOUT OBJECTION, SO ORDERED.
02:35:53 Lynch, Stephen F.U.S. Representative THANK YOU, MR. CHAIRMAN. JUST AS AN INITIAL MATTER OF CLARIFICATION, IT WAS ASKED EARLIER BY THE RANKING...
02:36:23 Lynch, Stephen F.U.S. Representative IN OUR CASE -- PLEASE DON'T BURN MY TIME. THIS IS A SIMPLE MATTER. IS IT 620 OR 660?
02:36:28 Mudd, Daniel H.President and CEO NO.
02:36:30 Lynch, Stephen F.U.S. Representative YOU USE 660 THEN?
02:36:31 Lynch, Stephen F.U.S. Representative NO. YOU DON'T USE 660 OR 620. WHAT DO YOU USE?
02:36:35 Mudd, Daniel H.President and CEO THE ORIGINAL DEFINITION OF A SUBPRIME LOAN WAS BASED UPON THE ORIGINATOR WHEN THE MARKET DEVELOPED....
02:36:41 Lynch, Stephen F.U.S. Representative WHAT IS --
02:36:43 Mudd, Daniel H.President and CEO OTHER DEFINITIONS USED IN THE MARKETPLACE.
02:36:48 Lynch, Stephen F.U.S. Representative THIS IS CONSISTENT -- YOU -- IF YOU HAVE ACCOMPLISHED ANYTHING HERE TODAY, YOU HAVE MADE CONSERVATORSHIP...
02:40:46 Mudd, Daniel H.President and CEO CONGRESSMAN, APOLOGIZE. ABOUT THE DEFINITIONS AND I WANTED TO BE AS PRECISE AS I COULD. IF I CAN FOLLOW...
02:40:54 Lynch, Stephen F.U.S. Representative THAT WOULD BE GREAT.
02:40:56 Mudd, Daniel H.President and CEO I DON'T MEAN NOT TO ANSWER YOUR QUESTION. ON THE SECOND QUESTION WHAT I FOUND PERSONALLY WAS THAT...
02:42:23 Lynch, Stephen F.U.S. Representative THANK YOU.
02:42:25 Lynch, Stephen F.U.S. Representative WOULD YOU LIKE TO HAVE A CRACK AT THAT ANSWER?
02:42:29 Syron, Richard F.Chairman and CEO YES, SIR. I THINK AS I SAID THESE ORGANIZATIONS HAVE PROVIDE ADD LOT OF VALUE IN THE PAST. THERE'S...
02:43:03 Lynch, Stephen F.U.S. Representative THANK YOU. MR. CHAIRMAN, I APPRECIATE. THANK YOU, SIR. I YIELD BACK.
02:43:10 Towns, EdolphusU.S. Representative THE GENTLEMAN FROM CALIFORNIA, MR. BILBRAY.
02:43:12 Bilbray, Brian P.U.S. Representative THANK YOU, MR. CHAIRMAN. GENTLEMEN, USED THE REFERENCE PERFECT STORM, CAN WE AGREE THIS WAS NOT AN...
02:43:40 Raines, Franklin D.Chairman and CEO CONGRESSMAN, IF YOU ARE ADDRESSING THE QUESTION TO ME, I AHE GREE WITH YOU. IT'S A RESULT OF HUMAN...
02:43:58 Bilbray, Brian P.U.S. Representative MY CONCERN IS I FEEL LIKE I'M IN 10, 15 YEARS I'M GOING TO HAVE POWER PLANT OWNERS COME TO US FOR...
02:46:29 Mudd, Daniel H.President and CEO I WOULD SAY THAT THE EXPANSION OF CREDIT THAT WENT ALL THE WAY BACK TO THE 1990'S AND WENT THROUGH...
02:46:46 Bilbray, Brian P.U.S. Representative MR. MUDD, LET'S TALK ABOUT THIS, TOO, HOW ABOUT SELF-CREATING THE CRISIS? DIDN'T THE AVAILABILITY...
02:47:06 Mudd, Daniel H.President and CEO CONGRESSMAN I THINK YOU RIGHTLY DESCRIBE IT AS A CIRCULAR BE PROBLEM. THE MORE ONE THING HAPPENED...
02:47:26 Bilbray, Brian P.U.S. Representative JUST BY THE ACT, BE IT GOOD INTENTION OR NOT, BE IT CONGRESS OR THE PRIVATE SECTOR, PROVIDING THE...
02:47:49 Raines, Franklin D.Chairman and CEO ARE YOU DESCRIBING A CLASSIC FINANCIAL BUBBLE. I THINK YOU'RE RIGHT. AS I TRIED TO SET FORTH IN MY...
02:48:12 Bilbray, Brian P.U.S. Representative MR. RAINES, I WAS INVOLVED IN 18 YEARS WITH AFFORDABLE HOUSING. EXPLAIN TO ME HOW YOU CAN PROVIDE...
02:49:03 Raines, Franklin D.Chairman and CEO I THINK YOU AND I HAVE PROBABLY SPENT ABOUT A SIMILAR PERIOD OF TIME WITH AFFORDABLE HOUSING. I THINK...
02:50:05 Davis, DannyU.S. Representative THANK YOU VERY MUCH, AND FOR BEING HERE. I HAVE TWO BASIC QUESTIONS. WHAT MISTAKES DID YOU MAKE THAT...
02:51:04 Mudd, Daniel H.President and CEO I CAN, CONGRESSMAN, AND THANK YOU FOR THE QUESTION. I THINK THAT THE STRUCTURE OF THE COMPANIES AS...
02:52:41 Davis, DannyU.S. Representative THANK YOU VERY MUCH. LET ME ASK YOU, MR. RAINES, I'D LIKE TO HEAR YOUR VIEW ABOUT WHAT MISTAKES WERE...
02:53:00 Raines, Franklin D.Chairman and CEO I'M SORRY. I WOULD POINT TO A COUPLE OF THINGS DURING MY TENURE THAT I WISH HAD BEEN DONE DIFFERENTLY....
02:54:42 Davis, DannyU.S. Representative A THANK YOU VERY MUCH. LET ME ASK, AND ANSWER THE SAME QUESTION, COULD YOU INDICATE ANY FEELING OF...
02:54:58 Syron, Richard F.Chairman and CEO YES, SIR. WHAT I WISH THAT WE HAD DONE AND WE TRIED TO DO THIS, INSISTED ON MORE PRECISION OR SOME...
02:55:40 Brendsel, Leland C.Chief Executive Officer THANK YOU. I WAS THE CEO OF FREDDIE MAC FOR A LONG TIME. OVER THOSE YEARS, I MADE MANY MISTAKES IN...
02:57:55 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED.
02:57:56 Davis, DannyU.S. Representative THANK YOU, MR. CHAIRMAN.
02:57:59 Towns, EdolphusU.S. Representative THANK YOU.
02:58:00 Towns, EdolphusU.S. Representative CONGRESSMAN SALI OF IDAHO.
02:58:02 Sali, William "Bill"U.S. Representative THANK YOU, MR. CHAIRMAN. GENTLEMEN, I HAVE TO TELL YOU I'M A LITTLE SURPRISED THAT I'M GETTING THIS...
02:58:31 Syron, Richard F.Chairman and CEO YES, SIR.
02:58:34 Sali, William "Bill"U.S. Representative WHILE I THINK THAT EACH OF YOU WOULD AGREE THAT -- I DON'T KNOW WHAT THE EXACT NUMBERS ARE BUT SOMEWHERE...
03:00:15 Mudd, Daniel H.President and CEO YEAH, CONGRESSMAN, I WOULD DISAGREE RESPECTFULLY IN THE SENSE THAT IT'S NECESSARY TO MAINTAIN A BALANCE...
03:00:33 Sali, William "Bill"U.S. Representative BUT WE'RE NOT TALKING ABOUT SUCCESS. WE'RE TALKING ABOUT STABILITY. AND ALL DAY LOANS FAILING AT 10...
03:00:44 Mudd, Daniel H.President and CEO YES.
03:00:45 Sali, William "Bill"U.S. Representative OK. NOW, EACH OF YOU WOULD AGREE THAT DURING YOUR TIME AT FANNIE AND FREDDIE YOU RECEIVED MORE IN...
03:01:23 Raines, Franklin D.Chairman and CEO I WOULD DISAGREE WITH THAT.
03:01:25 Sali, William "Bill"U.S. Representative THERE WAS NO PARTY OR BONUS THAT WAS INCREASED ON LEVELS OF ALL-DAY LOANS?
03:01:31 Raines, Franklin D.Chairman and CEO THAT WAS NOT OUR GOAL TO INCREASE ALL-DAY LOANS, NO.
03:01:34 Sali, William "Bill"U.S. Representative BECAUSE OF THE NUMBER OF ALL-DAY LOANS, YOUR BONUSES WENT UP, IS THAT A FAIR STATEMENT? BECAUSE OF...
03:01:44 Raines, Franklin D.Chairman and CEO DON'T BELIEVE SO, NO.
03:01:45 Sali, William "Bill"U.S. Representative IT DIDN'T INCREASE THE AMOUNT OF LOANS -- TOTAL LOANS THAT WERE GIVEN?
03:01:50 Raines, Franklin D.Chairman and CEO ALL-DAY LOANS CAN INCREASE THE TOTAL VOLUME OF LOANS THAT YOU HAVE AND THAT --
03:01:54 Sali, William "Bill"U.S. Representative AND THAT INCREASED YOUR BONUS, DIDN'T IT?
03:01:58 Raines, Franklin D.Chairman and CEO IT WAS NOT BASED ON VOLUME. IT WAS BASED ON PROFITABILITY AND PRICING. SO IF YOU PROPERLY --
03:02:01 Sali, William "Bill"U.S. Representative SO IF YOU HAVE MORE VOLUME YOU HAVE NO PROFIT, CORRECT?
03:02:05 Raines, Franklin D.Chairman and CEO NOT NECESSARILY, AS WE CAN SEE HAVING A LOT OF VOLUME CAN CREATE A LOT OF LOSSES. THERE'S NO NECESSARY...
03:02:20 Sali, William "Bill"U.S. Representative SO YOUR BONUSES, YOU'RE SAYING THAT YOUR BONUSES IS BASED ON VOLUME AND THAT THE ALL-DAY LOANS ARE...
03:02:27 Raines, Franklin D.Chairman and CEO I SAID MY BONUSES WERE NOT BASED ON VOLUME.
03:02:30 Sali, William "Bill"U.S. Representative PROFITABILITY, NOT BASED ON VOLUME, BASED ON PROFITABILITY AND THAT THE ALL-DAY LOANS HAD NOTHING...
03:02:36 Raines, Franklin D.Chairman and CEO NO. I SAID THAT THE PROFITABILITY OF ALL-DAY LOANS JUST LIKE ANY
03:02:40 Sali, William "Bill"U.S. Representative OK.
03:02:42 Raines, Franklin D.Chairman and CEO WOULD HAVE AN IMPACT ON THE BONUS.
03:02:45 Sali, William "Bill"U.S. Representative DID THE FACT THAT THERE WERE MORE ALL-DAY LOANS THAT WERE FUNDED BY FAN YEAS AND NAYS ARE ORDERED...
03:02:57 Raines, Franklin D.Chairman and CEO IN MY CASE, I DON'T BELIEVE SO. BUT I WOULD HAVE TO GO BACK TO 2004 -- REMEMBER, I LEVT IN 2004. SO...
03:03:14 Sali, William "Bill"U.S. Representative IT HAD NO IMPACT ON THE BONUSES THAT YOU RECEIVED, IS THAT YOUR TESTIMONY?
03:03:19 Raines, Franklin D.Chairman and CEO I BELIEVE IT DID NOT BECAUSE IT WAS SUCH A SMALL PART OF OUR BUSINESS IN 2004.
03:03:25 Sali, William "Bill"U.S. Representative IT HAD NO IMPACT ON YOUR BONUS?
03:03:27 Raines, Franklin D.Chairman and CEO I DON'T BELIEVE IT DID.
03:03:29 Sali, William "Bill"U.S. Representative IS THAT TRUE FOR THE REST OF YOU AS WELL?
03:03:32 Brendsel, Leland C.Chief Executive Officer YES. LAST TIME I RECEIVED A BONUS WAS FOR THE YEAR 2001. IT WAS NOT BASED ON THE ALL-DAY MORTGAGES....
03:03:43 Sali, William "Bill"U.S. Representative I'M NOT ASKING ABOUT THE LEVEL. I'M ASKING ABOUT THE FACT THAT THERE WERE ALL-DAY LOANS -- YOU WERE...
03:03:59 Raines, Franklin D.Chairman and CEO IN CASE OF MR. BRENDESL AND MYSELF, YOU HAVE TO SEPARATE THE ALL-DAY MARKET BECAME DRAMATICALLY LARGER...
03:04:20 Sali, William "Bill"U.S. Representative LET ME ASK MR. MUDD AND MR. SYRON, IS IT TRUE FOR YOU THAT THE ALL-DAY LOANS INCREASED YOUR BONUS?...
03:04:26 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED.
03:04:30 Mudd, Daniel H.President and CEO NO, CONGRESSMAN, BECAUSE THE GOALS THAT I HAD FOR MOST OF THAT PERIOD REFLECTED A WIDE RANGE OF THINGS...
03:05:04 Syron, Richard F.Chairman and CEO SIR, WE ALSO HAD A COMPENSATION COMMITTEE APPRISED OF THE INDEPENDENT DIRECTORS. WE HAD A BALANCE...
03:05:27 Towns, EdolphusU.S. Representative THANK YOU VERY MUCH. THE GENTLEMAN FROM KENTUCKY, MR. YARMUTH.
03:05:30 Yarmuth, JohnU.S. Representative THANK YOU, MR. CHAIRMAN. AND I'D LIKE TO ALSO ADD FOR THE RECORD MY CONGRATULATIONS AND THANKS TO...
03:07:08 Syron, Richard F.Chairman and CEO WELL, I THINK IN RETROSPECT, SIR, WE'VE LEARNED THAT THE ENTIRE FINANCIAL SYSTEM AND IF I MAY SAY...
03:07:42 Yarmuth, JohnU.S. Representative MR. MUDD.
03:07:44 Mudd, Daniel H.President and CEO IF HYPOTHETICALLY IF I WERE RUNNING THE COMPANY ON A GOING -- ON A GOING FORWARD BASIS, AND I HAD...
03:08:36 Yarmuth, JohnU.S. Representative GOING BACK TO THE QUESTION OF LEVERAGE, THOUGH, WAS THERE EVER ANY DISCUSSION INTERNALLY IN YOUR OPERATIONS...
03:08:49 Mudd, Daniel H.President and CEO WE ACTUALLY WERE -- HAD RAISED CAPITAL AND WERE CARRYING CAPITAL DURING THIS PAST YEAR THAT WAS SIGNIFICANTLY...
03:09:28 Yarmuth, JohnU.S. Representative I TAKE IT AND I'M NOT TRYING TO SAY THAT -- I'M NOT TRYING TO QUESTION OR QUESTIONING IN HINDSIGHT...
03:09:46 Mudd, Daniel H.President and CEO WE WERE CARRYING -- WE WERE CARRYING CAPITAL THAT WAS NOT ONLY MET BUT EXCEEDED ALL OF THE REGULATORY...
03:09:52 Yarmuth, JohnU.S. Representative UNDERSTAND THE REGULATORY STANDARDS. BUT FROM JUST LOGICAL -- LEVERAGE OF THIS TYPE, DOESN'T IT RELY...
03:10:35 Mudd, Daniel H.President and CEO I DEFINITELY THINK THAT YOU ARE ON TO THE RIGHT ISSUE AND THE ABILITY OF THE LEVEL OF CAPITAL IN EITHER...
03:11:09 Towns, EdolphusU.S. Representative THANK YOU VERY MUCH. THE GENTLEWOMAN FROM NORTH CAROLINA, MS. FOXX.
03:11:13 Foxx, VirginiaU.S. Representative THANK YOU, MR. CHAIRMAN. AND I, TOO, WANT TO CONGRATULATE YOU ON YOUR NEW POSITION AND TELL YOU I...
03:16:57 Towns, EdolphusU.S. Representative THE GENTLEWOMAN FROM.
03:16:58 Foxx, VirginiaU.S. Representative COULD THEY ANSWER REAL FAST, THEIR ANSWER, MR. CHAIRMAN?
03:17:02 Towns, EdolphusU.S. Representative ALL RIGHT, IF THEY REMEMBER. VERY QUICKLY.
03:17:04 Foxx, VirginiaU.S. Representative BECAUSE WE WANT THE AMERICAN PEOPLE TO KNOW WHAT YOUR ADVICE IS ON THAT.
03:17:08 Towns, EdolphusU.S. Representative VERY QUICKLY BECAUSE TIME HAS EXPIRED.
03:17:11 Raines, Franklin D.Chairman and CEO CONGRESSWOMAN, FIRST OF ALL, WITH REGARD TO ACCOUNTABILITY, I HAVE THREE FULL PAGES IN MY WRITTEN...
03:17:55 Brendsel, Leland C.Chief Executive Officer YES, I CERTAINLY WAS ACCOUNTABLE FOR WHAT HAPPENED TO FREDDIE MAC DURING MY --
03:18:00 Towns, EdolphusU.S. Representative IS YOUR MIKE ON?
03:18:01 Brendsel, Leland C.Chief Executive Officer I AM AND I WAS HELD ACCOUNTABLE FOR WHAT HAPPENED TO FREDDIE MAC DURING MY TENURE AT THE COMPANY....
03:18:48 Towns, EdolphusU.S. Representative MR. MUDD.
03:18:50 Mudd, Daniel H.President and CEO DO I EXPECT SUNNY DAYS? NO. I WENT TO MEXICO WHEN THE PESO WAS DEVALUED. I WENT TO ASIA WHEN THE 1998...
03:19:21 Towns, EdolphusU.S. Representative MR. SYRON.
03:19:24 Syron, Richard F.Chairman and CEO THANK YOU, SIR. WITH RESPECT TO FORESIGHT AND SEEING THINGS GOING FORWARD, I WAS NOT AS PESSIMISTIC...
03:19:48 Towns, EdolphusU.S. Representative ALL RIGHT.
03:19:50 Braley, BruceU.S. Representative MR. CHAIRMAN, RANKING MEMBER ISSA, THANK YOU FOR HOLDING THIS HEARING. MR. CHAIRMAN, THERE HAVE BEEN...
03:22:07 Mudd, Daniel H.President and CEO I'M SORRY. COULD YOU REPEAT THE QUESTION
03:22:11 Braley, BruceU.S. Representative YES. WHAT HE'S SAYING IS THAT YOUR COMPANY WAS RAMPING UP TOO QUICKLY ON SUBPRIME PURCHASES AND THIS...
03:22:23 Mudd, Daniel H.President and CEO I BELIEVE THAT'S WHAT HE WAS SAYING IN HIS NOTE, YES, SIR.
03:22:26 Braley, BruceU.S. Representative AND THEN LATER IN THE EMAIL, IF WE CAN GO TO THE NEXT SLIDE, HE SAYS "WE APPROVED TWICE IN MARCH AND...
03:22:58 Mudd, Daniel H.President and CEO YES. THERE'S PART OF THE MEMO THAT'S MY RESPONSE TO HIM THAT'S COVERED UP BY THE BOX.
03:23:04 Braley, BruceU.S. Representative WE'RE GOING TO GET TO THAT.
03:23:05 Mudd, Daniel H.President and CEO WHICH THAT FURTHERS THE
03:23:07 Braley, BruceU.S. Representative RIGHT. BUT WHEN HE SENT THIS EMAIL TO YOU, DID YOU AGREE WITH HIS ASSESSMENT?
03:23:13 Mudd, Daniel H.President and CEO THAT'S WHY I WROTE ABOVE IT, IT'S A SERIOUS MATTER. AND IF THE FACTS ARE SUPPORTIVE, YOU AND I WILL...
03:23:29 Braley, BruceU.S. Representative RIGHT. SO LET'S GO TO THAT PORTION OF THE MEMO THAT YOU REPLIED. AND YOUR REPLY WAS STATE ON SUNDAY,...
03:23:49 Mudd, Daniel H.President and CEO YES.
03:23:52 Braley, BruceU.S. Representative AND SAYS "IF THE FACTS WERE SUPPORTIVE, WE WILL COME DOWN HARD." WERE THE FACTS SUPPORTIVE?
03:23:57 Braley, BruceU.S. Representative THE FACTS WERE PARTIALLY SUPPORTIVE. I WOULD SAY IN THIS CASE EVEN MOSTLY SUPPORTIVE. WE CALLED ALL...
03:25:58 Mudd, Daniel H.President and CEO IF I MAY, HIS MEMO -- I HAVE A SERIOUS PROBLEM WITH THE CONTROL PROCESS AROUND THE SUBPRIME LIMIT....
03:26:38 Braley, BruceU.S. Representative UNDERSTAND THAT. BUT THE WHOLE IMPORTANCE OF HAVING A CONTROL PROCESS IN PLACE IN A COMPANY LIKE YOURS...
03:27:01 Mudd, Daniel H.President and CEO THAT'S WHY IT'S IMPORTANT TO FIX THEM.
03:27:04 Towns, EdolphusU.S. Representative THE GENTLEMAN'S TIME HAS EXPIRED. MR. MCHENRY FROM NORTH CAROLINA.
03:27:07 McHenry, PatrickU.S. Representative I THANK THE NEW CHAIRMAN AND CONGRATULATIONS TO YOU. LOOK FORWARD TO WORKING WITH YOU. WE'LL START...
03:27:52 Raines, Franklin D.Chairman and CEO I DIDN'T FEEL PRESSURE FROM CONGRESS.
03:27:54 Raines, Franklin D.Chairman and CEO SO NO.
03:27:56 McHenry, PatrickU.S. Representative I'M ASKING -- I ONLY HAVE
03:27:57 Raines, Franklin D.Chairman and CEO NO.
03:27:59 McHenry, PatrickU.S. Representative YOU'VE HAD A LONG DAY, SO I'M TRYING TO --
03:28:02 McHenry, PatrickU.S. Representative NO. INTERESTING.
03:28:04 Brendsel, Leland C.Chief Executive Officer NO.
03:28:05 McHenry, PatrickU.S. Representative NO.
03:28:09 McHenry, PatrickU.S. Representative MR. MUDD?
03:28:11 Mudd, Daniel H.President and CEO NO BECAUSE AS THE GOALS WENT UP THE GOALS CAME FROM H.U.D. AND MEETING THOSE H.U.D. GOALS CREATED...
03:28:20 McHenry, PatrickU.S. Representative MR. SYRON.
03:28:22 Syron, Richard F.Chairman and CEO AS THE GOALS WENT UP AND THE GOALS WERE SPECIFIED BY H.U.D., YOU INEVITABLY TO MAKE MORE PROGRESS...
03:28:32 McHenry, PatrickU.S. Representative OK. SO YOU HAD -- IN ORDER TO MAKE MORE PROGRESS WITH YOUR AFFORDABLE HOUSING GOAL YOU HAD TO TAKE...
03:28:44 Syron, Richard F.Chairman and CEO BUY RESCUE MORTGAGES.
03:28:45 McHenry, PatrickU.S. Representative BUY RISKIER MORTGAGES. IT'S INTERESTING, MR. SYRON GAVE I THINK SOMETHING MORE AKIN TO WHAT I WAS...
03:31:10 Raines, Franklin D.Chairman and CEO I DISAGREE. IN MY TIME THAT I WAS THERE I DID NOT FEEL PRESSURED FROM THE CONGRESS TO DO RISKIER LOANS...
03:31:44 McHenry, PatrickU.S. Representative AND WHO FUNDS H.U.D., CONGRESS. I HATE TO REFERENCE THIS AND MR. RAINES KNOWS FROM HIS POLITICAL...
03:31:55 Raines, Franklin D.Chairman and CEO HOWEVER, CONGRESSMAN, AT THAT TIME, JUST TO BE FAIR, CONGRESS WAS IN THE HANDS OF THE REPUBLICANS....
03:32:08 McHenry, PatrickU.S. Representative READING FROM YOUR QUOTE IN "THE WASHINGTON POST" YESTERDAY, YOU WANT TO MAKE THIS A PARTISAN SITUATION....
03:32:14 Raines, Franklin D.Chairman and CEO CONGRESSMAN, THAT'S JUST NOT CORRECT. I SAID -- I WANTED IT NOT TO BE A PARTISAN SITUATION.
03:32:18 McHenry, PatrickU.S. Representative OH, OK. OK. WELL, THAT'S GENEROUS OF YOU. SO I READ IN "THE WASHINGTON POST" FROM YESTERDAY THAT...
03:32:47 Syron, Richard F.Chairman and CEO BY ADVOCACY GROUPS, YES, SIR.
03:32:49 McHenry, PatrickU.S. Representative YES. AND THOSE SAME ADVOCACY GROUPS ARE CLOSELY ALIGNED TO SOME MEMBERS OF CONGRESS AS WELL. AND...
03:32:59 Syron, Richard F.Chairman and CEO I WOULD BE SPECULATING TO GET INTO --
03:33:01 McHenry, PatrickU.S. Representative WELL, I TELL YOU, YES, THEY ARE. THANK YOU.
03:33:05 Towns, EdolphusU.S. Representative THANK YOU VERY MUCH.
03:33:16 Towns, EdolphusU.S. Representative I'M SORRY. THE GENTLEWOMAN FROM WASHINGTON RETURNED.
03:33:18 Norton, Eleanor HolmesCongressional Delegate THANK YOU VERY MUCH, MR. CHAIRMAN. YOU DON'T WANT TO START OFF MAKING MISTAKES.
03:33:22 Norton, Eleanor HolmesCongressional Delegate THAT'S RIGHT. I WANT TO START THIS THING OFF RIGHT. GENTLEMEN, I HAVE TO CONFESS, MY MAJOR CONCERNS...
03:36:29 Raines, Franklin D.Chairman and CEO WELL, I CAN EXPLAIN IT I THINK VERY QUICKLY. THE SYSTEMIC RISK TO THE SYSTEM COMES FROM ANY VERY LARGE...
03:37:56 Norton, Eleanor HolmesCongressional Delegate WOULD PEOPLE INVEST IN SUCH A COMPANY?
03:37:58 Raines, Franklin D.Chairman and CEO THEY INVEST IN UTILITIES, THEY INVEST IN DEFENSE CONTRACTORS AND THEY INVEST IN BANKS WHICH HAVE A...
03:38:06 Norton, Eleanor HolmesCongressional Delegate DO YOU THINK WE SHOULD TREAT FANNIE MAE AND FREDDIE MAC MORE LIKE A UTILITY THEN?
03:38:11 Raines, Franklin D.Chairman and CEO I THINK THE -- TREATING THEM MORE LIKE A UTILITY MAY BE POLITICALLY MUCH MORE COMFORTABLE THAN TREATING...
03:38:21 Norton, Eleanor HolmesCongressional Delegate LET ME GO ON TO MR. MUDD WHO HAS INDICATED THAT FREDDIE AND FANNIE MAE ARE IN A "NO MAN'S LAND," AND...
03:38:42 Mudd, Daniel H.President and CEO THE ADVOCACY, CONGRESSWOMAN, IS TO MAKE IT CLEAR FOR A LONG TIME --
03:38:46 Norton, Eleanor HolmesCongressional Delegate AND YOU DON'T CARE WHICH IT IS, SIR?
03:39:03 Mudd, Daniel H.President and CEO I THINK THAT HALL AT THE COMPANY AND THERE ARE DIFFERENT COMPONENTS THAT PROVIDE THE GUARANTEE BUSINESSES...
03:39:54 Norton, Eleanor HolmesCongressional Delegate I WOULD LIKE TO TELL IF THAT IT IS BELIEVED THAT AN ENTIRELY PRIVATE COMPANY CAN BE TRUSTED TO PROTECT...
03:40:11 Syron, Richard F.Chairman and CEO MADAM CONGRESSWOMAN, I DON'T THINK THAT A PURELY PRIVATE COMPANY COULD GENERATE LONG- TERM-FIXED-RATE...
03:41:34 Norton, Eleanor HolmesCongressional Delegate WHAT ABOUT THE SHAREHOLDER
03:41:35 Brendsel, Leland C.Chief Executive Officer WHAT?
03:41:36 Norton, Eleanor HolmesCongressional Delegate WHAT ABOUT THE SHAREHOLDER MISSION?
03:41:39 Brendsel, Leland C.Chief Executive Officer WELL, IN ORDER FOR IF THE SHAREHOLDERS ARE SERVED, THEY'RE ONLY SERVED BY SERVING THAT MISSION OF...
03:41:59 Norton, Eleanor HolmesCongressional Delegate THANK YOU VERY MUCH, MR. CHAIRMAN.
03:42:03 Towns, EdolphusU.S. Representative THANK YOU VERY MUCH. MR. GARRETT FROM NEW JERSEY.
03:42:07 Garrett, ScottU.S. Representative I THANK THE CHAIRMAN, AND I THANK THE RANKING MEMBER FOR THE OPPORTUNITY. I NORMALLY SERVE ON THE...
03:47:45 Towns, EdolphusU.S. Representative I KNOW YOU WAITED TWO HOURS BUT YOUR TIME HAS EXPIRED.
03:47:48 Garrett, ScottU.S. Representative THANK YOU, AGAIN, FOR THE OPPORTUNITY, THOUGH.
03:47:54 Raines, Franklin D.Chairman and CEO I BELIEVE TWO QUESTIONS THAT
03:47:55 Garrett, ScottU.S. Representative SURE.
03:47:57 Raines, Franklin D.Chairman and CEO ONE OF THEM ABOUT REGULATION AND FANNIE MAE'S ACTIVITIES WITH REGARD TO LEGISLATION AND THE OTHER...
03:48:03 Garrett, ScottU.S. Representative RIGHT.
03:48:05 Raines, Franklin D.Chairman and CEO IS THAT CORRECT?
03:48:06 Garrett, ScottU.S. Representative YEAH.
03:48:08 Raines, Franklin D.Chairman and CEO WITH REGARD TO FANNIE MAE AND LEGISLATION, IT WAS ALWAYS MY DESIRE, AND I WORKED VERY HARD BUT UNSUCCESSFULLY...
03:50:13 Brendsel, Leland C.Chief Executive Officer WITH REGARD TO DERIVATIVES, THE USED DERIVATIVES SAID FREDDIE MAC TO REDUCE RISK AND TO MANAGE INTEREST-RATE...
03:50:36 Garrett, ScottU.S. Representative OR INTEREST RATES?
03:50:39 Brendsel, Leland C.Chief Executive Officer WE USED IT TO REDUCE RISK BUT THIS IS NOT HAVE ANYTHING TO DO WITH THE LOSSES THAT HAVE BEEN TAKEN...
03:51:49 Syron, Richard F.Chairman and CEO SHOULD WE HAVE THE SAME CAPITAL STANDARDS -- SHOULD THERE BE THE SAME CAPITAL STANDARDS? I THINK...
03:53:01 Sarbanes, John P.U.S. Representative YOU HAVE DEMONSTRATED EXTRAORDINARY STAMINA HERE TODAY. IT REFLECTS THE LEVEL OF INTEREST ON THE PART...
03:54:52 Raines, Franklin D.Chairman and CEO ALL LOANS ARE RISKY, THEY ALL HAVE SOME LEVEL OF RISK TO THEM AND IT IS IMPORTANT TO BE ABLE TO MEASURE...
03:56:53 Sarbanes, John P.U.S. Representative LET ME GO TO YOUR TENURE, FANNIE MAE WAS PURCHASING MORE OF THESE LOANS THAT APPEARED TO HAVE DEPARTED...
03:57:11 Mudd, Daniel H.President and CEO WHAT HAPPENED WAS THE MARKET MIGRATED TO A WIDER RANGE OF LOANS WITH A WIDER RANGE OF FEATURE THAT...
03:58:37 Sarbanes, John P.U.S. Representative IN ALL OF THESE HEARINGS, IT IS NOT THE CASE -- IF I AM LISTING AS A MEMBER OF THE PUBLIC, IT HAS...
03:59:51 Mudd, Daniel H.President and CEO MY ANSWER IS YOU HAVE TO CREATE A CULTURE THAT ENABLES THOSE PEOPLE TO GET THEIR VOICE HEARD. IT DOES...
04:00:39 Towns, EdolphusU.S. Representative GENTLEWOMAN FROM CALIFORNIA.
04:00:42 Speier, JackieU.S. Representative THANK YOU. I WILL ASK A COUPLE OF BRIEF QUESTIONS.
04:00:52 Speier, JackieU.S. Representative ARE ANY OF YOU EMPLOYED BY THE FINANCIAL-SERVICES INDUSTRY? IN EACH OF YOUR CASES, WAS A COMPENSATION...
04:01:21 Syron, Richard F.Chairman and CEO WE HAD A BALANCE LOOK WHETHER SHARE WAS A PART OF THAT. INDIRECTLY THERE MAY HAVE BEEN BUT I DON'T...
04:01:32 Mudd, Daniel H.President and CEO WE HAD A PARALLEL PROCESS WHERE THERE WERE A NUMBER OF DIFFERENT OBJECTIVES THAT NEEDED TO OCCUR....
04:01:42 Speier, JackieU.S. Representative SO THERE WAS A LINK?
04:01:46 Mudd, Daniel H.President and CEO THEY WERE AN OVERALL COMPONENT FOR THAT YES.
04:01:51 Brendsel, Leland C.Chief Executive Officer MY COMPENSATION WAS SET BY THE BOARD OF DIRECTORS. AND EVALUATED ANNUALLY. THEY CONSIDERED MANY FACTORS....
04:02:29 Raines, Franklin D.Chairman and CEO I DON'T BELIEVE THAT VOLUME PLAYED A ROLE WHEN I WAS THERE, BUT PROFITABILITY DID. SOMETIMES MIKE...
04:02:46 Speier, JackieU.S. Representative MR. MUDD I AM REFERRING TO A "IN NEW YORK TIMES" ARTICLE. IT QUOTES A MAN AS TELLING YOU THAT YOU...
04:03:23 Mudd, Daniel H.President and CEO I DO NOT REMEMBER THAT EXCHANGE AT ALL. I LOOKED BACK THROUGH MY RECORDS FOR A PRO PREPARATION IN THIS...
04:04:03 Speier, JackieU.S. Representative YOU DON'T OFFERING -- REMEMBER HIM OFFERING YOU ABREAST MET AT THE END? THERE IS A PRESENTATION FROM...
04:04:45 Mudd, Daniel H.President and CEO YES.
04:04:48 Speier, JackieU.S. Representative DID YOU LOWER YOUR STANDARD TO OBTAIN LOANS FROM -- OR RISK FROM COUNTRYWIDE?
04:04:54 Mudd, Daniel H.President and CEO KNOW. WE HAD A DEBATE THAT I DESCRIBED DURING THE COURSE OF THE HEARING THAT SAID THAT THE CORE OF...
04:06:01 Speier, JackieU.S. Representative THE DOCUMENTS THE COMMITTEE RECEIVED APPEARS THAT THE MORTGAGES THAT FANNIE MAE BOUGHT BETWEEN 2005-2007...
04:06:42 Mudd, Daniel H.President and CEO I THINK THAT IS A WRAP IS -- REPRESENTATION, I THINK COUNTRYWIDE WOULD BE A COMPONENT OF THAT TOTAL...
04:06:58 Foxx, VirginiaU.S. Representative YOU WERE ABLE TO GIVE MR. SHAYS ONE MINUTE. MR. SALLEY IS ABOUT TO LEAVE US. HE HAS ONE VERY IMPORTANT...
04:07:21 Sali, William "Bill"U.S. Representative THIS IS THE LAST TIME I WILL BOTHER YOU. THIS WILL BE FOR MR. SIREN, I GUESS. YOU SHOULD HAVE A DOCUMENT...
04:08:40 Syron, Richard F.Chairman and CEO I AM SEEING THIS FOR THE FIRST TIME IN SOME PERIOD OF TIME. UNFORTUNATELY, I DO NOT REMEMBER.
04:08:59 Sali, William "Bill"U.S. Representative IS THAT SOMETHING YOU CAN PROVIDE IN WRITTEN FORM FOR THE COMMITTEE?
04:09:02 Syron, Richard F.Chairman and CEO YES SIR.
04:09:12 Sali, William "Bill"U.S. Representative MR. CHAIRMAN, WITH THAT, I HAVE ONE QUESTION IN WRITING AND I WANT TO SUBMIT THAT TO THE
04:09:26 Towns, EdolphusU.S. Representative SO ORDERED. LET ME THANK ALL THE WITNESSES FOR YOUR TESTIMONY, WE APPRECIATE THE TIME YOU HAVE SHARED...
04:09:56 Unidentified Speaker THANK YOU, MR. CHAIRMAN. [CAPTIONING PERFORMED BY NATIONAL CAPTIONING INSTITUTE] [CAPTIONS COPYRIGHT...
04:10:11 Towns, EdolphusU.S. Representative WE WILL TAKE A RECESS BEFORE OUR SECOND PANEL.

NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.

RELATED PROGRAMS

PEOPLE GRID LIST

  • Mudd, Daniel H.
  • Raines, Franklin D.
  • Syron, Richard F.
  • Brendsel, Leland C.
  • Garrett, Scott
  • Issa, Darrell
  • Waxman, Henry
  • Mica, John
  • Tierney, John
  • Foxx, Virginia
  • Sali, William "Bill"
  • Braley, Bruce
  • Towns, Edolphus
  • Lynch, Stephen F.
  • Maloney, Carolyn
  • Souder, Mark Edward
  • McHenry, Patrick
  • Kucinich, Dennis
  • Bilbray, Brian P.
  • Kanjorski, Paul E.
  • Shays, Christopher
  • Turner, Michael R.
  • Burton, Danny "Dan" Lee
  • Norton, Eleanor Holmes
  • Cummings, Elijah
  • Sarbanes, John P.
  • Yarmuth, John
  • Speier, Jackie
  • Clay, William Lacy Jr.
  • Westmoreland, Lynn A.
  • Davis, Danny

PURCHASE