The House Oversight committee held hearings today on the role of Fannie Mae and Freddie Mac in the housing crisis and financial meltdown. And, no surprise, committee members didn't exactly heap praise on the troubled mortgage giants.

Committee chair Henry Waxman: "The CEOs of Fannie and Freddie made reckless bets that led to the downfall of their companies. Their actions could cost taxpayers hundreds of billions of dollars."

GOP Rep. Darrell Issa: "Outright fraud and greed wasn't isolated to just Wall Street. Fannie and Freddie shared in this disgrace as it drove much of the poor decision making that have led us to where we are today."

From the Wall Street Journal:

Lawmakers cited thousands of documents collected by the committee that Waxman said "show that the companies made irresponsible investments" that destabilized the firms and forced the government to put the companies in conservatorship in September.

Specifically, the panel released a June 2005 presentation made by former Fannie CEO Daniel Mudd that suggested the firm should move away from the traditional mortgage market in order to take advantage of the growing subprime and non-prime loan businesses.

"If we do not seriously invest in these 'underground' type efforts and the market changes prove to be secular, we risk: becoming a niche player; becoming less of a market leader; becoming less relevant to the secondary market," the presentation slides say.

Fannie, the slides continue, could "meet the market where the market is" by accepting higher risk and more volatile earnings

Daniel Mudd, CEO of Fannie Mae, offered this defense to the committee: "We couldn't afford to make the bet that the changes were not going to be permanent," he said.