Unlike Citigroup and the Federal Reserve Bank, however, FannieMae hasyet to show any sign of improvement from the collapse of themortgagesecurities markets, which made the testimony all the moresignificantas Congress sets about fixing the GSEs' own house.

Daniel H. Mudd, Fannie Mae chief executive from 2004 to 2008,told thepanel that it was Fannie's conflicting mission--make aprofit butalso increase the supply of affordable housing--thatdrove it toinvest so heavily in subprime mortgages. Also, he said,the depth ofthe financial crisis and its sudden turns, made itimpossible foranyone to foresee how bad things couldget--sentiments also voiced bythe former Citigroup executives theday before.

While Congress is taking a dim view of any financial executivethatfalls back on that explanation, Citigroup has made significantstridesback to health and the government has laid out plans to exitits stakein the bank--at a profit. Fannie Mae, unfortunately, isstillbleeding red ink and it is clear that Congress intends to takesomeaction to reform it.