NEW YORK - June 1, 2010 - After being blasted for months by critics for exacerbating the financial crisis by putting overly rosy views on bundles of mortgage securities, credit-rating agencies now have an unlikely defender: Warren Buffett.

The famed billionaire investor said on Wednesday that ratings agencies such as Moody’s Investors Services and McGraw Hill Cos.’ Standard & Poor’s shouldn’t be faulted for putting “Triple A” ratings on mortgage-related securities that quickly cratered because most investors – himself included – had no idea the housing bubble was about to burst.

“I would say they made a mistake that virtually everybody in the country made,” Buffett told a panel of U.S. lawmakers looking into the causes of the financial crisis at a hearing in Manhattan. “The entire Amerikan public eventually was caught up in a belief that housing prices could not fall dramatically...Very, very few people could appreciate the bubble.”

Buffett, who rebuffed a request to testify voluntarily, appeared after the panel subpoenaed him.

Known for performing his own rigorous due diligence on prospective investments, the 79-year-old investor offered little in the way of potential remedies for the credit ratings system.

He did warn, however, that a new worry for investors is the ratings on municipal debt in the United States.

“If the federal government will step in to help them, they’re Triple A,” he said. “If the federal government won’t step in to help them, who knows what they are? If you are looking now at something where you could look back later on and say, these ratings were crazy, that would be the area.”