FM Watch: Where They Are Now.(Mortgage Scene)

Byline: Paul Muolo

So, how's the old "anti" Fannie/Freddie gang holding up these days? Funny, you should ask. Formed in 1999 or thereabouts, FM Watch was a lobbying group whose sole mission in life - at least early on - was to block and thwart the then-expansionist tendencies of Congressionally chartered mortgage behemoths Fannie Mae and Freddie Mac. Lobbyists who worked for FMW liked to argue with me that they didn't really want the GSEs destroyed - they just wanted the two put in their place so they wouldn't hurt the profitability of their companies.

Well, guess what? The FMW crowd got its way. Fannie and Freddie (as we all know) crashed and burned as private sector companies and are now the wards of Uncle Sam because (take your pick) they were too big and powerful (politically speaking); no regulatory body in Washington had the power to truly regulate them; their specific investments were hidden from public view; politicians took their money, did their bidding and protected them; and they screwed up in a major way by investing $600 billion or so of their combined assets in subprime, alt-A and other asset classes that are now in the tank.

Readers know the story pretty well so there's no sense in going down that road again. But what about the old gang from FM Watch? Two years ago the group disbanded, slapping each other on the back, and popping champagne for a "mission accomplished" moment. They moved onto bigger and better things in financial life. Or did they?

So, let's take a closer look at the "good guys" - those firms that can say, "We made a difference by standing up to Fannie and Freddie, and Leland Brendsel and Franklin Raines." ...