In early March 2008, congress held hearings to dig into the relationship between high CEO compensation (like 161 Million to the fired CEO of Merrill Lynch) and the melt down in the US mortgage business.

As usual, Democrats on the committee wanted to somehow link the two factors together but failed.

Most of the criticism was directed at Angelo Mozilo, founder and CEO of Country Wide Financial. Of course, since his company is the largest and most successful (until recently) mortage lending business in the history of the world, he was the one the Democrats went after.

Mozilo defended himself mostly by just saying that he had no interest in making bad loans; " When bad loans are made, nobody wins...not the borrower, the lender or the community" according to Mozilo.

Actually, he is only partially accurate. There are a few people that make money when bad loans are made. Not necessarily because they are "bad " loans , but because a transaction was initiated and closed (funded).

The primary person that makes money under these circumstances is the mortgage broker. It's doubtful that Country Wide employees made "bad" loans. But it is pretty clear that a lot of these loans made it to the books of Country Wide through independent brokers that submitted loan packages to CountryWide.

The question is this...Did this occur enough to throw the entire mortgage business off balance in a market that eventually became overcrowded with inventory.

The FBI is getting close to looking into this. Just announced is the fact that the FBI has launched an investigation against Country Wide.

I'm confident that they will discover no problem with Country Wide or its employees, but some of those independent brokers are about to be in the cross hairs of the Feds and may have to face the music.