Bloomberg.com: Exclusive

Bloomberg.com: Exclusive: "Spreading Crisis

And in the last two years, as the crisis has spread to the broader financial system, she's been getting out in front of fellow Republicans, including Bernanke and Paulson.

In September 2006 she told a Fannie Mae conference she was concerned that the proliferation of non-traditional mortgages such as option ARMs was a danger to the banking system. In March 2007, she called for ``aggressive'' foreclosure relief.

Two months later, as Paulson declared the housing market crisis more than half over, Bernanke echoed Bair and called on lenders and the government to intensify efforts to prevent home foreclosures.

``She was one of the first to say that you couldn't just do it by interest rates, that you had to reduce the principal and that you couldn't just do it one by one,'' Frank said in an interview. Bair wasn't available for an interview."

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