The House Committee on Oversight and Government Reform is interviewing several overpaid CEOs today to find out what the relationship is between outlandish executive pay and the subprime mortgage meltdown.

Among 10 witnesses scheduled to appear are CEOs from the mortgage industry, including Mr. Fake-tan Face-lift himself Angelo Mozilo, CEO of the nation's largest mortgage lender Countrywide. Bank of America, the nation's largest bank, agreed to purchase troubled Countrywide. That's not only a disaster in the making for real estate consumers, but Mozilo was about to jump out with a golden parachute worth $115 million. He graciously refused about $37.5 million.

But those are the kind of paydays that have Congress concerned. How can you run a company into the ground and get rewarded like that? To find out the committee has subpoenaed the chairmen of the compensation committees responsible for the huge paydays.

To it's credit, the committee is also hauling in some Wall Streeters, responsible for passing along bad mortgage packages overburdened with subprime mortgages to investors, including Merrill Lynch's CEO Stanley O'Neal.

After all, it was greedy investment banks that created the shaky mortgage bond investment packages (CDOs) by convincing investors that they were buying insured AAA to A packages. This artificially kept mortgage interest rates low for years, because the investors didn't have a clue, even against evidence of rising inflation.

When interest rates started to rise, many of these loans went bad in a hurry, because housing sales slowed down and homeowners with risky loans found themselves unable to dump their homes at the magnificent profit that they had hoped for.

As the defaults rose, the CDOs became worthless. Hello, mortgage crisis.

But back to outlandish CEO pay ... . According to the AFLCIO, the CEOs of Standard & Poor's top 500 companies received compensation of about $15 million apiece in 2006, a collective 38 percent pay raise over 2005. With the DOW losing 2000 points in 08 so far, they should do really well in 2009 their golden parachutes.

Let's hope the House committee does more than just ask questions.

And the public can do something about it, too. Stop investing in companies with overpaid CEOs. If you're willing to hold back against home sellers, hold back against corporate greed and maybe there will be a little more in your bank account to buy homes with.

Published: February 28, 2008

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.