Executives and employees at the major credit ratings agencies were often aware of problems in the AAA grades awarded to thousands of mortgage-related securities whose downgrades helped plunge the nation into a financial meltdown.

At the same time, according to documents from the big credit ratings agencies presented at a House hearing Wednesday, pressure from bond and securities issuers translated into inflated ratings that put investors at risk. The companies — Standard & Poor, Moody's and Fitch, Inc. — made enormous profits as they evaluated a ballooning number of mortgage-backed bonds, many of which were given top marks as long as housing prices went up.

In a presentation made to the Moody's board of directors a year ago, top executive Raymond McDaniel warned that company employees sometimes "drink the Kool Aid" and gave in to pressure for undeservedly high ratings, even as the weaknesses of the mortgage-backed securities were becoming apparent.

The executive also warned that the issuers of mortgage-related securities awarded business to companies that produced inflated assessments and that other participants in the market wanted them as well.