WASHINGTON (AP) -- Mortgage giants Fannie Mae and Freddie Mac -- despite their robust cadre of economists and mortgage experts -- failed to heed warnings that the most dramatic housing bubble in U.S. history would burst.The companies -- particularly Freddie Mac -- didn't raise enough cash to reassure Wall Street that they would be able to withstand a severe downturn in U.S. home prices.
As their losses started rising at alarming rates, investors simply lost confidence, forcing the government's historic takeover of the two companies, which could be announced as soon as Sunday.
Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said in an interview Saturday that the companies' financial picture was better than investors assumed, but "it just plainly became clear that elements of the market wouldn't accept that."
Read More
