On Sept. 29, 2008, House Speaker Nancy Pelosi, D-CA, praised House Financial Services Committee chairman Barney Frank, D-MA, for his “leadership.” In the next breath, she blamed the sub-prime mortgage meltdown on a supposed lack of Wall Street regulation by right-wing ideologues in the Bush administration. Turns out Pelosi had it exactly wrong. The collapse of government-guaranteed Fannie Mae and Freddie Mac, which helped send the U.S. economy into a nose-dive, was a preventable man-made disaster, according to documents obtained by Judicial Watch under the Freedom of Information Act.
In fact, for at least six years prior, officials at the Federal Housing Finance Agency (FHFA) warned key members of Congress – in letters, congressional testimony and email – that post-Enron financial controls at the two mortgage giants were “inadequate.” They also found that neither Fannie nor Freddie were even filing disclosure documents required of all public companies in a timely fashion. Despite FHFA’s multiple alarms, Congress failed to rein in such illegal and reckless behavior. Prominent among Fannie and Freddie’s congressional defenders was Frank, who said on September 10, 2003 that Fannie and Freddie were “not in crisis.”