e proper jurisdiction between them and that is what is going on. >> you have a willingness to engage in this activity. if it is determined the inspector general from treasury is the entity by you, are reassured that the inspector general from treasury would conduct that same on it? >> it is not my determination. it is a question of interpreting what the law requires and provides for. both as to the small business lending fund law as well as t.a.r.p. both the special inspector general's office and the inspector general's office are very excellent operations that have conducted a thorough audits and i would be happy to work with both of them as we have. .. to be resolved. thank you for observation. i did not understand why there would have been any reluctance.

as we look at the larger question, not just where we have been because there is a collage of analysis and information on both sides, much of it credible about the successes of t.a.r.p. there is an issue where we're going. part of the problem is the unintended consequences with the bigger banks getting bigger. a lot of the oversight going toward the institutions that were not the target of this initial effort. what i am concerned about is the perception that now we have rating agencies that are factoring in the likelihood that somebody is going to step in to cover these banks in shoring up their position. i am dramatically concerned about the consequences as ben

bernanke said. it creates a limited market and limits market discipline in this context. how do we check the ability to be assured we are not going to see this again and one of the factors i see you have been looking at has been the idea of the living will. what is going to happen in practice with that living will? are we and forcing this, are we requiring that an effort be made to compel these organizations to explain how they will get out of it? >> absolutely. it is a good question. i was rather surprised by the comment that somehow treasury was opposed to this. it is a requirement of dodd- frank. of limitation of living wills is left to the fdic and the federal reserve. they have until january 2012 to work on it. it was part of the proposal that treasury made and we have backed

the concept the entire time. you are right, that is a critical tool on how -- and how thoroughly it that is enforced and how thorough those plans are will make a critical difference. in terms of the rating agencies, they're watching this closely. they should. again, have made it clear that what they're doing is monitoring it. they are seeing -- >> they are making calculations and the calculation is we're reading the banks and giving them a preferential position with respect to the market based on their confidence that someone else will step in. >> that is correct and they are doing that worldwide. they have said we're closely monitoring the situation to see how these resolution regimes are implemented and to see if there is the political will to ensure the there are no bailouts in the

future. >> what would that take? what should be requiring for them to people to pass the scrutiny of that living well analysis? >> where at this early stage of the implementation. the law was passed eight months ago and to say it is not going to work, it is like saying we passed the securities act in 1933, because they cannot fix our markets within six months, they did not work. we set up the sec and took actions and we have the most vibrant and robust capital markets. it is like saying we passed the civil rights act and it did not end discrimination. there is time needed to implement. we're busy working on it. it involves many agencies, not just treasure. i will come the suggestions if he has suggestions on how to implement it. i have not heard any specifics.

>> thank you. i turned to the gentleman from maryland. >> thank you. let me ask you this. you have heard the testimony earlier. >> i did. >> you talked earlier, you said there would be some retooling. basically if i were to sum up what mr. borowski said, it is late but at least you are aiming in the right direction. he did not seem to have confidence based on the past that your department is going to do very much of anything.

even under the threat of demise of the program. i am wondering what is your reaction to that? >> thank you for the question. my reaction is to be puzzled. i felt like there was strong criticism but i did not hear specifics. sigtarp made recommendations to us. we have implemented 14. the ones we did not would have made it harder for people to get assistance. it would have required us to thumbprint anyone and would have required more documentation about income, comparing their income to when they got their mortgage. other things like that. the last recommendation was in april of last year. lately, he said the program is a failure but we have not seen in

thesanything specific. we are expanding our compliance reporting and we will withhold incentives. on that, what we did from the outset was we had a very strong compliance program to get servicers to fix the problem. there was not -- we only pay money when they enter into the permanent modification. there were not entering which is why we focused on remedial actions. >> there is a lot of frustration on both sides of the aisle. the question is, what can we do pass the conversation to affect more people? is there something we need to do differently? i for one and many of my colleagues voted against the

bill yesterday to and the program. most of us said to ourselves and each other treasury has to do better. this is real. i am wondering, what is going to happen? we cannot keep going down this road to where we're going. there are people suffering and with all that money out there, it gives the opposition more ammunition to not only destroy the program, but also not replace it with anything. that goes against everything that we're trying to accomplish. i want to know what direction is. >> you are right. those people who want to end the program have not offered any alternatives. we continue to look at ways we can improve it. it is a difficult issue. we have a lot of people who

spent time on this and if there was a silver bullet, it is not easy. the program is continuing to help tens of thousands. it is affecting people indirectly through the standards that were setting -- we are setting. >> do we need to raise the standards? >> absolutely. we need national servicing standards and there's a lot of activity going on in that regard through the discussions on the foreclosure problems and otherwise and we will see that coming. we are committed to that. we have met with members of congress about specific things that need to be in those national servicing standards. >> one of the things he said, there are the tools in dodd- frank but he said he does not

believe that the administration has the will to carry it out. i want you to comment on that but on this other issue. if we take funds away from the budget, how would that affect the market perception? % but taking awayrcent tha funds would not be a good thing. we need to make sure we vigorously enforce this. as to the comment, i do not know what specifics he is referring to. the implementation process is an open one. there are a number of rulemaking proceedings going on. if he has comments on those, he can make them. if he thinks certain things are not happening fast enough, he

should point that out. >> thank you. >> thank you. the gentle lady from new york. >> thank you. thank you for being here this morning and a willingness to testify. i am looking at your opening statement. i wondered if we could flush out a couple items that are in your comments. in reference to dodd-frank, you listed three points for us. the first one is dodd-frank gives the government the authority to shut down and broke apart large non-bank financial firms. to what extent, what is the scope of that? should we concern the government has the kind of power they can shut down a private entity? >> it is a good question. there is a process that has to go one. a determination that has to be made by treasury and the vote of

the fdic and the federal reserve and consultation with the president. there are criteria that have to be met to do that in terms of when you can use that authority. those criteria include there is not another way to do with the situation. the firm does pose a threat to our financial stability and there are others. there is rulemaking going on to further explicate that. it is important for there to be clarity as to those rules. >> thank you. the second point for identifying and responding to risk. that would tie back to the first point. there are -- are there benchmarks you are going to look for that will identify someone is in trouble and the government needs to take this aggressive action? >> there are standards that need

to be implemented and fleshed out more. the key thing is that prior to the passage of dodd-frank, we regulated entities based on the type of entity and we did not have a comprehensive way of looking at risk to the system. that is what we have now. that is why this law is so important and why implementation is important. we can take proactive measures to impose provincial standards, whether it's the capital, leveraged, liquidity, which can limit for risky activities and there is a process where you exercise -- you can impose restraints on firms. it gives us a lot of tools but they need to be implemented. >> going along with that gives you the tools. what is the concern of the

government? many feel dodd-frank is an overreach. we want to prevent what happened but we want to maintain free market. at what point does the government step back and say we're not going to get involved? >> there is a balance and congress struck the right balance plan dodd-frank -- in dodd-frank and give us the tools. that is why in has to be implemented thoughtfully overtime. that may change of time as our financial changes. >> one more question regarding your testimony. you talked about dodd-frank, you say "much work needs to be done." can you expand. there are 250 rulemaking that

needs to be done and studies the need to happen. it involves efforts of many agencies, not just treasury or fdic but the federal reserve and the sec and others. that is the work i am referring to. a number of those things, -- have been done or in process. there is a lot more work to be done. >> thank you. i have one last question. the government is a player and referee. do you say a conflict in all of this? >> i do not think we want the government to be a player in the sense of having interest in firms. that is why we're unwinding the program quickly and get out of the business of owning stakes in private companies. we have been successful in doing that quickly. the government needs to stick to

a to roll of regulating risk and monitoring risk and taking action when firms pose risks to the system but clearly, we have to have a system where there is no firm that is too big to fail. and firms fail as a result of the actions they take. >> thank you. i yield back. >> the chair recognizes the gentle lady from new york. >> thank you and welcome to the committee. during the financial crisis, some firms became so risky and interconnected that their failure was a threat to the broader economy. i know congress tried to address that in treasury -- and treasury dodd-frank.-- in can you describe what happened

[unintelligible] number of experts looking at the riskiness of activities. the fsoc will make determinations about which firms opposed those risks based on their interconnectedness, their leverage, the nature of their activities. the work is ongoing. those determinations have not been made yet. there will be made by fsoc, which is comprised of all these agencies. >> thank you. one of the factors that led to the crisis is the evolution of the shutter banking system. trading and sales of derivatives

had grown to be a trillion dollar business but it became evident that people, the treasury, even the companies did not understand the scope, location of the risk of the size -- location of the risk and this size. it became billions oand it was o control or understanding. can you comment on what advances you have made on the derivative market and bring it into the light of day to ensure it can exist without posing a threat to financial stability? " certainly. dodd-frank does provide provisions for greater transparency and regulation of the derivatives market. we did not have those previously. there is a lot of work going on in that regard.

>> can you specify? >> i am not directly involved. that involves treasury. the sec and ftc. i will be happy to arrange that. >> the growth illustrates that federal regulators had failed to keep up with market innovation and development. regulation could not keep up with innovation and dynamic action taking place in the markets. can you ensure that dodd-frank and the regulations will keep pace with the innovations in the financial markets? >> it is a good question. what it does is give us the tools to do that. we have to implement them. previously, we did not have a system where we could look at risk across our entire system.

we regulated banks and had regulation of other entities. we have an entire shuttle banking system developed and we had all this risk being taken on by firms that were not subject to regulation. aig is a classic example. there was no federal regulation of daiichi and it engaged in derivatives that were destructive. we have wound that down and there is the reason they will repay the government every dollar we gave them. >> we heard testimony earlier and one of the points he raised is the act did not reach far enough to address international firms that operate globally. -- are financial

institutions at a disadvantage because we have regulation? many of these other areas do not. they do not have the capital requirements. they do not have the rest restraints, the oversight that american firms will be having. >> thank you for that. the international coordination piece of this is very critical. we are dealing in a global world. we have these large institutions who are not national. they operate worldwide. that is why the coordination is important. it is going on and the federal reserve is involved and treasury. i would be happy to get you more details on what is taking place in that regard. congress could not legislate something that mandates what our foreign counterparts do.

it requires us to engage in coordination and cooperation with them. >> the basel talks, where do they stand? >> that will result in higher capital requirements that will be phased in over time that are badly needed. many of our institutions are better capitalized today than their foreign counterparts. we need to phase in those tougher standards. >> my time has expired. thank you for your service. >> thank you. >> thank you. let me turn to the gentleman from in illinois. >> thank you and thank you for your testimony today. let me ask you a brief question related to the insurance industry. i have heard from people who

expressed concerns with how dodd-frank affects the insurance industry. insurers are heavily regulated, including an industry funded state guaranty system that helps secure policyholders in the event of an insurance company failure. most insurers are not engaged in significant unregulated interconnected off-balance sheet, highly leveraged activities. so designations such as systemically important would appear to be on warranted in this industry. overlapping and conflicting roles between state and federal regulators adds a layer of regulation that would disadvantage these insurers and their customers. as you know in the event of another large financial company failure, companies with assets

over $50 billion could be on the hook to pay for the resolution of these failed firms even though they exhibited no bad behavior of their own. insurance companies who will continue to be resolved in the existing state system are never resolved by the orderly liquidation process and yet have to pay to resolve banks and other bad actors in the financial industry. these costs will inevitably be borne by the consumer. if insurance companies are regulated at the state level, and if it is clear they do not participate in systemically risky behavior, why do they have to bail out other failing financial service companies that do participate in this risky behavior? >> your question raises a number

of important issues. let me try my best. where i would start is we have come out of a time when we did have a very large insurance company that was regulated at the state level but which posed huge risks to our system. it was not regulated beyond that. that was b.i.t.. we did not have the tools to do with it. its failure could have brought down our entire system. that has animated the provisions of dodd-frank that address the insurance industry. i recognize your point. we have to make sure these provisions are implemented in a way that is fair to those companies that do not pose those risks and do not engage in those activities. that is a process that we have to focus on as we go for.

fsoc is focused on those issues. we need to do this in a way that imposes standards and restrictions on those funds that pose a significant risk to the system while leveling the playing field for the others. >> you acknowledged with regard to aig, it was not their insurance business that got them in trouble or brought them down. it is a complicated question. there were things going on with their insurance business that did pose some risks. you are correct that aig was involved in a number of activities that went outside the traditional insurance area. and outside of the traditional insurance activities which did not get them in trouble. >> it is a complicated question.

they had derivatives that posed a lot of risks but they were engaged in some activities with the capital through their insurance business that pose the illiquidity challenge and that was one of the reasons they had liquidity problems and had to -- the fed had to step in. >> is there a part of you that thinks it is a bit of a stretch to lump the insurance industry into dodd-frank as well? >> the regulation of large firms that pose a risk to the system is designed to recognize we can achieve our goal. doing that by type of entity or a business line today, we have to have the ability to look across the entire financial industry and determine where are

the risks coming from and take appropriate action. at the same time, we have to make sure that those regulations do not impose unfair burdens on the other companies that are not -- engaged in those activities. >> i would second that and reiterate the fact that the insurance industry did not engage in systemically risky behavior. thank you. >> in your testimony, you say outright that dodd-frank was necessary because of the moral hazard when government provided emergency assistance to private firms. you believe that dodd-frank answered the too big to fail question. >> yes. dodd-frank gives us the tools to

address the too big to fail problem. >> too big to fail is no longer permissible? >> as i said when you are out of -- when you were out of the room, we have to implement the law. the law is not a magic wand. it is like saying when we passed the civil rights act, that did not eliminate discrimination. we have a lot of work to do. >> it is a heck of an analogy. in today's financial times, alan greenspan said, the financial system on which dodd-frank is thing imposed as far more complex than the lawmakers and even most regulators apparently contemplate. we walmost with a number of regulatory

inconsistencies whose consequences cannot readily be anticipated. do you agree? >> no. but i would say is the question is what are we saying would be the alternative? i do not think anyone who would say we would be better off without the tools that we have provided for through dodd-frank to regulate risk to impose higher provincial standards to be able to prevent any firm from threading our entire system. the question is, we have to implemose ly. >> are we doing that? >> i think we are doing that. >> okay. under dodd-frank, to continue with mr. greenspan's piece in today's "financial times," under dodd-frank they are trusted with forecasts and presumably preventing all undesirable

repercussions that might happen when the regulatory conditions are importantly altered. no one has such skill. do you agree or disagree? >> well, i think again we have to try. i don't think any of us want to be in a situation that we were in in the fall of 2008 where because we had a regulatory system that had been outgrown, we had a financial industry where there was a huge amounts of risk taken on without transparency and without adequate regulation, and that's what contributed to the crisis we had. i think because of that we learned the lesson that we need to overhaul our regulatory system. that's the judgment congress has made, and i think the task is now to implement that judgment. >> mr. barofsky and number others testified during the last financial crisis in 2008 the

laws that we had then we could have prevented the crisis. do you agree? >> that's news to me. i'd be happy to discuss that with mr. barofsky. >> basically -- okay. it's your view dodd-frank ended too big to fail. >> as i said, mr. chairman, dodd-frank gives us the tools to address the problem. >> okay. now, moving back to hamp, and i want to give you an opportunity to respond now in the second round here, you know, you made an interesting face when i was saying that, you know, we have 740,000 homeowners who have actively been harmed by this program. do you disagree? >> i do, sir, and i appreciate you -- >> the folks that have fallen out of the program that enter into the program, you know, 1.4

million, is that the number? >> trial modifications. >> now, do you understand when they are entered into a trial modification, they are told verbally that often times they are going to make lower monthly payments going forward. are you aware of that? >> i am, sir. >> okay. now, in a trial modification that is verbal as all these are verbal, when you're paying less than what is contract chewablely obligated by a homeowner, that harms your credit. are you aware of that? >> mr. chairman -- >> are you aware of that, yes or no. >> mr. chairman, if i can say how the trial modification works because des important to have all the facts on the table. the trial modification provides a three month payments in which payments are lowered temporarily, and during that time, we have to determine

whether or not someone qualifies for a permanent modification. what we did at the outset was we allowed people, allowed servicers to accept people into trial modifications on stated income. you could basically raise your hand saying this is how much i make, i qualify. because it was a terrible crisis -- >> i understand. i read your editorial. the point i'm asking -- okay, and i know you're trying to go through all this. i understand how this works operationally. i want to make sure you understand how this works so when you're given that verbal modification, this temporary modification, does that hurt your credit? >> mr. chairman -- >> you're not answering the question. it does or it doesn't. if it doesn't hurt your credit, i think -- >> i think the answer can't be given as a simple one without, again, looking at what happens

to those people. if i may answer -- can i answer this question in this regard if you'll allow me. you refer to all these 750,000 people being hurt. >> 740240 according to your last report. >> thank you. we actually published statistics on what happened to those people. now, those are based on servicer surveys, but it's in our monthly report, and it shows what happens. the majority of those ended up in alternative modifications or alternative payment plans or are current. very few of them went to foreclosure. >> do you believe that hamp has harmed any borrower? >> i'm sure there are people who were harmed. >> how many? >> i don't know the answer to that. >> i thought you published statistics about what happened?

>> mr. chairman, we publish a lot of statistics, and i'm trying my best to address your concern. i think, i think it's important to remember that whenever you implement a program like this on a massive scale in a crisis, what we are doing is buying time for people. most of those people ended up in better situations. there -- >> how many? >> well, again, based on the servicer surveys, the majority of -- the vast majority of them were clearly in better situations. only a small number went to foreclosure, but the point about those is -- >> how many went to foreclosure? >> about 5%. >> how many? what is the number? >> foreclosure completions is 58,000, but the point is their loan wasn't in connection withed. they owe --

increased. they owed the same amount. >> right. so when the servicer comes back in, when they are not given a permanent modification, they owe those missed payments or the difference between the payment they were making and the payment they were obligated to make. >> that is correct, sir. >> right, and there's penalties and fees associated with that as well as additional interest. >> there may be in some cases. >> so, therefore, that temporary modification has left them worse off than had it not been given originally. >> sir, if again you're talking about a pool of people who are given that breathing room and the majority of them, the vast majority of them end up being in better situations, i still think it was the right policy judgment to make. >> even if this program is actively harming individuals and

leaving them worse off? >> again, it's not that the program is actively harming them, sir. it's that they have a mortgage. they owe the same amount. it should have been explained to them that if they didn't get the permanent modification, they would city owe what was previously due. now, if that wasn't explained to them, that was a mistake, but that should have been explained to them, but the program didn't make them more soft. >> well, the program, and i've got numerous examples from constituents that i could read to you. the program has harmed a large number of individuals, and the treasury department, you know, special inspector general's report on hamp has been out there for quite a while. there's been plenty authority to go in and fix this program. you haven't fibbinged it. -- fixed it, and, you know, sir, your touting some of these statistics, another thing i wanted to ask while you have the

survey there or your statistics there. how many, you have -- you quoted the foreclosure number. how many are in pending foreclosure? do you have a statistic similar to that? >> foreclosure starts, those not acceptable for trial modification is 153,000. now, a lot of those could have been in foreclosure starts before they went into the trial. >> okay, well, look, i wanted to give you an opportunity to respond if you wanted to have anything else, write it down. >> i'd be happy to. again, we faced the worst housing crisis of a generation. we were trying to roll out a program that could help a lot of people, a lot of people were already late for months, # 10 we were -- so we were trying to create breathing room. most of the people are in better situations. those who are not, i think,

again, their mortgage didn't increase because of hamp. they simply weren't accepted into the permanent modifications because we have prudent eligibility criteria so we spend taxpayer dollars wisely. >> thank you. >> thank you. first of all, mr. secretary, if i could -- could i request to have your op-ed, your editorial placed in the record, and i would like to say that -- >> without objection. >> i also would like to say new york is very grateful as are the 35,000 families who were able to stay in their homes because of the hamp program. i would, with all respect say, that it is very easy to throw stones and criticize. it is harder to come up with a program that addressed this crisis which a large part of it

was the housing crisis, and for every person who stayed in their home, not only did it help that person, it helped their community because vacant homes bring down -- they cost -- the value of housing for their neighbors. it helped their communities. it helped their city, and it helped with the overall financial stability of our country. mark zandy and other economists testified that housing is roughly 25% of our economy, so if we do not stabilize housing and grow in housing, we're not going to stabilize out of this great recession. now, i am very concerned that the republican majority in the past three weeks have eliminated four critical housing programs that helped people stay in their home, and i would say that it is

very, very dishonest to criticize a program for not helping people that had no help to begin with, and they didn't get in the program because they did not meet the high criteria that the program had that tax dollars would not be spent unless people had a job, had a credit record, and were believed to be able to meet that commitment going forward, so i want to congratulate the treasury department and really the obama administration for not just criticizing and saying we have a problem, but getting out there and doing something, like fdr. when fdr had a problem, he just didn't look at it, he started working on it, and granted not every program works, but have ideas of how to make it better, but to criticize a program when you have no ideas of your own, when you haven't come forward with a program, when you haven't done anything to help the

people, and i would say the overall economy, so i want to congratulate you on the work that you've done. i support the hamp program. i hope that president obama has a lot of veto ink in his pen, and if the republican bill gets to his desk, it is my hope that he vetoes it, and i respectfully ask the majority if they can have a hearing to bring in hpd directors from across the country, people on the front line working with our government to help people stay in their home. in the city that i represent, the officials that do this every day, the non-for-profits that are committed, and the brainings that voluntarily stepped up to the plate to help said this program works, so instead of just being critical, come up with ways to improve it if you think there is a problem, but to criticize because people didn't get into the program because the

criteria was so high, and i agree with the proposal from treasury to keep that criteria in a way that protects taxpayers' money. now, i would like to move on to the t.a.r.p. workout, and i really want to quote from an article that was written recently, october 20th, 2010 in bloomberg, one of our big papers and media experts there, and they testified, and i'd like your response to this that t.a.r.p. investments have actually provided taxpayers with an, and i quote, "higher returns on yields paid than 30 year treasury bonds, enough money to fund the securities for the exchange commission for the next two decades." the article also states, and i quote, "the government earned $22.5 billion on its investment

in banks and insurance companies, and 8.2% return over two years. " now that beat out u.s. treasury's high yield savings accounts, money market funds, and certificate of deposits, am i correct? >> congressman, you are correct we've had good returns on the program. i'm not familiar with those numbers, but the bank program is making a profit. >> could i ask, could you describe generally the ways in which treasury is seeking to maximize taxpayers investment under t.a.r.p. and ensure that our country and taxpayers are made whole. >> certainly, congresswoman. let me first just say the purpose of t.a.r.p. was to stabilize the system, not to make money, but it is terrific that this program will not cost the taxpayers very much, and we are looking to maximize the returns on the various

programs. as i say, we earned about -- we estimate we'll earn about $20 billion on the bank investments, aig right now is at a profit, some loss on the autos. let me note one thing going back to hamp. i apologize to the chairman, i misquoted the numbers. in terms of those in trials and didn't make permanent mods were half of what i said. it's 28,000, and the starts are 84,000. >> thank you. the time expired. i give the gentle lady six minutes and the ranking member six minutes here. i'll give the ranking member, i'm sorry, mr. cummings six minutes now. >> thank you very much. i do want to associate myself with every sill billion that --

sill la bill that ms. maloney just said. i think you're well aware of this, we want more people to be helped because there's so many people suffering. >> absolutely. >> i guess the reason for the criteria was the dilemma that people didn't want a program, i mean, a congressman didn't want a program that would be so low that there would be a lot of people failing. is that part of the reason? >> well, i think it's a few things. you know, we did have what we felt were criewnt criteria. we don't provide modifications for vacation homes, vacant homes or provide stance for people who can afford a mortgage without it or provide assistance for those

who need to move on to another situation, and we make sure the mortgage modification is economically making sense, and as a result of that, the pool of people eligible as you probably know is about 1.4 million today. that's a pool of families. we reached a lot of them, we want to reach more of them, but it's a very difficult program. we had a lot of people looking at whether there's other ways to do this, the authorities to implement new programs as you know expired. we did take funds and reallocate them to the states so that the states can come up particularly those states hardest hit by these problems so those states can innovate with programs that address the needs of the unemployed and the problem of falling house prices. >> now, do you -- early on, much has been made with regard to the whole issue of that it was

projected by the president that more people would be helped by hamp than was. is there something that happened along the way that you can look at this thing and say, wait a minute, maybe we cannot accomplish those numbers that we really want to accomplish, and if so, what was that? >> we recognize that number one, the eligibility pool wasn't as big as we thought it might be. it was very hard to know when the program was launched, and, again, we were in a crisis. people had no sort of historical basis to say, well, you know, this is what -- how you should do it. that was number one. number two was servicers were not e quipped to deal with the crisis. their service model was set up to collect payments on

performance loans. it was difficult to implement. we tried to take a lot of actions to improve that as we discussed earlier. we need more. we need national servicing standards. there's a lot of work going on on a lot of fronts to address it, and number three was it is hard to reach people sometimes. people don't necessarily want to talk on the phone when they get a call from their mortgage servicer or want to hear what it's about. it was hard to reach people. >> and so going back to this issue of the trial modification to have a clear picture so you're saying -- and this is a very important point -- that a lot of the people who did not end up with permanent modifications were able to resolve their problems in other ways; is that right? >> that's absolutely true, and it's important to remember that before we launched our program, there were no -- there were very, very few modifications

getting zone by the -- done by the industry, and many of those that were getting done increased people's payments. hamp set standards that the industry then largely adopted in its proprietary programs, called the affordability standard, in terms of the ratio to one's payment and one's income. as a result of that and other modifications put in place, hamp's effectiveness was indirect in helping 2 million people. there's modifications done outside of hamp since we launched the program, and i think our standards helped cause that. we put in, as you know, a number of protections that now the industry is following in terms of prohibitions on dual track where someone who is in the process of being considered for a modification could otherwise be foreclosured upon. other appeal processes for those

who were rejected. we require the servicers not only evaluate someone for hamp, but then require them to then look at other types of assistance to make sure that person can't qualify for something else before -- i assume you have some type of access to information or maybe you're a part of these negotiations with the attorney general. are you a part of that. not you -- but -- >> i'm aware of what's going on, yes. >> i'm not trying to get into confidently, but do you -- might hamp be affected by anything that comes out of that? >> well, it's certainly will be. you know, what's going on in that, and, again, i appreciate the question as you know, i can't comment on the details of it because it is an enforcement matter, but clearly this is

another example of the fact that this industry is broken. it didn't have the standards that we needed, and it didn't have the ability to cope with the crisis, and we saw that through hamp, # saw that through foreclosures which was outside of hamp, and i think what's emerging from this is clearly a push to get national servicing standards, and, yes, those will have an effect across the whole industry, and that's what we need. >> thank you very much, mr. chairman. >> i appreciate the ranking member's questions and especially the last question is of interest. it's a push for national servicing standards. what i said is what we need this is evident by what foreclosures are and we do need national servicing standards, and what comes out --

>> okay -- go ahead, finish your sentence. >> as to what exactly is in a settlement, i wasn't commenting on that >> thank you for your testimony. at this time i ask unanimous concept to submit for the record to have three written testimonies of what would have been a panel today, a testimony by joshua rosner, a testimony by the indidn't community -- independent community bankers, and timely testimony by anthony b. sanders. i ask unanimous concept they are submitted to the record. without objection, so ordered. today's hearing was certainly interesting. we had two often times dramatically different views of the facts, the lay of the land, but certainly stimulating and interesting for us to inform

congress' thinking on how the implementation of dodd-frank is progressing. the impact of the t.a.r.p. program and the bailouts and whether or not bailouts continue . he refers to hamp to a process and poorly designed and executed. the main stream goals were not followed through with, and finally he testified what he said was resolution authority was a joke, and that dwoaz to the heart of really what many of us here in terms of congress believe is one the lasting impact of dodd frank is that

we've codified the bailouts in terms of calls it resolution authority. now, that was testimony, and he did an able job of defending the administration's actions in particular hamp, we disagree on the impact it has with terms of those who its hurting. we appreciate your willingness to be here. thank you, and this meeting is ajohned. adjourned. >> thank you. [inaudible conversations] [inaudible conversations] [inaudible conversations]

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