that provide access to basic services including credit and savings to create a sustainable affordable job development and vibrant community for america's working families. today the u.s. economy is mired in the worst economic crisis in more than half a century. evaluation issues ran front and center in the financial reform debate. our credit economy has earned its monitors the great recession and this is not an equal opportunity recession. we call on the subcommittee and regulators to act swiftly to enforce the title 11 and embrace the reforms included in the dodd-frank act and implement the following ten recommendations that will help all americans while particularly assist low to moderate-income communities, communities of color and communities impacted by foreclosure crisis while working to realize our sustain the american dream of homeownership. to accomplish this end, we propose the following: first, to develop a more modern appraisal

reporting process and utilize more robust and uniform reporting that can be told to today's needs. the recent changes by the fhfb regarding the uniform appraisal have only had a further confusion to the already inadequate mandated form. the licensed professionals are all residential mortgages on $50,000 regardless of the art originated or insured by the private sector work friday night or the fha. the current limitations associated in the so-called value of a quarter of a million dollars are out of touch with today's reality. third, the relevant act as the appraisal management companies must be critically reviewed by the afc to ensure that they are not negligible affecting but quality. congress should immediately investigate the practice of mortgage originators acquiring that amc or appraisal professionals engaged with

business assume the buyback risk for the secondary market or ensure a claim related to the loan origination. fourth, a prison professionals enhance safety sound as protect the interests of all parties to the mortgage transactions including and especially consumers and they must be appropriately compensated under any customary standards that is developed. fifth, the banking regulators fannie mae, freddie mac and fha should not a ski the appraisals of committees of the nation's safety and soundness review and enforcement. sixth, while automated evaluation model serve as a useful cost competitive an effective check against fraud they should never replace the use of appraisals by the license appraisal for all mortgages that exceed $50,000 is a need for more effective consumer protection transparency and education and putting the dedicated consumer hot lines by

this efp in collaboration for-profit organizations. the inshore and expand housing opportunities as an open society. it is unfortunate today that we still see issues of the age of housing prominent value and use of come parable's coupled with subjective remarks with regards to the quality of housing in america's low-income or minority communities. ninth come inappropriate appraisal under evaluation is equally down to homeowners, communities, the tax base investors and insurers. we are seeing widespread undervaluation to the use of broker opinions and the short sale process and the reluctance to recognize that in some communities the market is beginning to return. and tenth, states must suspend the inappropriate action of redirecting funds intended for the appraisal compliance, professional development licensing and oversight to the general funds.

in conclusion, it is imperative for the members of congress, the cftc, the provincial regulators and the appraisal subcommittee to work in conjunction with one another to ensure that consumers and industry stakeholders benefit from a system of regulation that helps ensure the independent integrity of the process. to accomplish this, we urge you to consider the recommendations that we have made today. thank you. >> thank you so much. u areognized for five minutes. >> thank you very much, the foundation greatly appreciates the opportunity to appear before you today to offer our perspective on the regulation of real estate appraisers by with that of i serve as a senior staff member on the appraisal foundation for the past 22 years and prior to that had the privilege survey tells one of your former colleagues. i should point out why not an appraiser. there are many misperceptions about the appraisal foundation devotees are off by saying what the appraisal foundation is not. it's not a government agency or

a regulatory body. it wasn't created by congress and it's not an appraisal trade association. we have no individual members. what are we? we are a 501c3, not-for-profit educational organization. we were founded by eight national resort of physicians 25 years ago before the enactment. we are in the umbrella organization composed of over 100 organizations and government agencies with an interest in valuation. we have attached a list of those organizations to the testimony. we were created primarily to foster the professionalism and appraising. with the appraisal foundation is is the private sector expertise in the real property appraisal regulatory system under title 11. the foundation does not have any of regulatory authority but we provide the tools to the regulatory community. specifically, we set the experience requirements for someone to become a listed certify a state license to preserve. we are the authors of the national uniform exam that all

55 states and territories use and we are the authors of the generally recognized standards of professional conduct known as the professional present practice. but all state licensing certified appraisers must adhere to. with the work of the board's we understand the very importance of the public trust. in fact the word public trust appear in the mission statements. and we have learned over the years when we to build and maintain public trust is to promote transparency wherever and whenever possible. all of our boards conduct public meetings. the adopt the work product open sessions, the issue exposure drafts often numerous times, and all comment letters we receive for post on the website. in fact the people that serve on the boards we interviewed them in a public setting. in addition as a part of our commitment to promoting the public trust we have worked in several u.s. government agencies at their request. on developing the recommendations to improve the operations to assist them in their investigative work

regarding the valuations in to assist them in developing up policies and procedures. as mr. rodgers pointed out in the previous panel the subcommittee should have very close relationship over the past two years. state investigators training with over 300 state investigators now having been trained were producing several training videos and a time of tight state budgets, state regulators can receive training without having to fly anywhere. and then because all 55 states and territories are using the same documents or enforcement used we appraised something called a voluntary disciplinary action matrix. what that is is it lists specific violations and then recommended disciplinary actions. it also lists at targeting and mitigating circumstances. it is completely voluntary and it is a tool for the states to use. i've been asked to touch on the two internal foundation issues. one of them is the foundation strategic plan. to get the details of the plan they will not be presented to

the board of trustees until next month. it's accepted by the board foundation will publicly expose the draft plan as it did with its current plan to all stakeholders in 90 days. this november the board of trustees will take into account public comments received and make a final determination on approving the strategic plan. it was also asked to comment on the appraisal practices board. there's a lot of misinformation about the newest board the was constituted in july, 2010. this essentially is the board if you will. how likely it could with of a foreclosure property and short sales on things like that. four things i want to mention the number of the appraisal board doesn't have any congressional authority it and used the evidence of strictly voluntary. number two, that doesn't operate with any public funds or any grant money number 38 pp doesn't establish a compilation of existing ones into one place.

last, the apb advisories are available to anyone at no cost. earlier while we heard from the general accounting office and over the past decade of the six candles and disciplinary actions, 2300 were occasions and 1800 suspensions to have been very active. title xi while certainly without its flaws is the glue that holds the 65 jurisdictions together. and it's important to remember without the use any appropriated funds. madame chair, the present condition stands ready to assist in any way you believe the subcommittee can help us. thank you. >> thank you so much. you are recognized for five minutes. >> good morning. thank you german bigger and braking member gutierez. members of the committee for the opportunity to testify on behalf of the national association of realtors about the appraisal and regulatory impact on consumers and businesses. we represent more than 1 million real-estate professionals including approximately 30,000

licensed and certified appraisers. my name is francior. i go by frank and i do not speak french. i'm a realtor but they are living as a real-estate appraiser. my qualifications are fully detailed in my written testimony. our believes of the strong independent appraisal perfection according to consumers and the real-estate industry are vital to restoring faith in the mortgage origination process. appraisals are one of the most current critical for the recovery. there's no question about the importance of the appraisals in real estate and mortgage transactions. the credible television by the confident, licensed certified professionals provide benefits to the lender and borrower and secondary market. public trust in the real estate profession is enhanced. there are obstacles to preventing the realization of these benefits. among the obstacles is the weekend appraiser confidence. despite the good intentions,

litigation legislation and regulation has diminished the importance of the appraiser competency test as the criteria for the appraiser selection and retention. the exertion of the appraisal management companies but when the loan originators and appraisers results in its focus on the fee and turnaround time rather than the appraiser confidence and experience. the most common concern expressed by our members, whether they would be a broker or appraiser is knowledge of the local market for a geographic confidence. the uniform standards of the professional appraisal practice requires the appraisers to have confidence or to acquire competency to understand the nuances of the particular market. the current model tend to disregard this necessary focus on competency. prisoner competency may be enhanced with education and communication. communication between appraisers and real-estate agents and their clients is not prohibited and should in fact be encouraged. of course, the efforts to intimidate, bride, or to worsen

an appraiser are and should continue to be prohibited. some amc provide a legitimate services for the reasonable fees but many contribute to problems in the appraisal business. and the overall housing market. contrary to their claims, there is evidence of independence often compromised by the amc. assignment conditions such as unreasonable turnaround times and unrealistic work for a reduced fees interferes with the decision making process necessary for the critical appraisal. experienced appraisers refuse these assignments instead of selecting the best appraiser for the job, it is often awarded to the appraiser whom response first to a mass e-mail colin of the best selection of it. the independent judgment of the appraiser is compromised when amc read your some reasonably question the comparable sales selections mom appraisers even a staff of only a cursory

knowledge of the valuation interfere by insisting that specific information be included or excluded from the appraisal report. the altered business relation exists between the prisoners and their clients, unreasonable completion time requirements diminished fees and interference in the of cruisers and dependent are contribute to the failure to recognize positive movement in the prices and values in many of the market areas. they didn't support the dodd-frank language that regulates amc's on two different tracks. we believe exempting some stevan from steve registration has aggravated the problem. ner believes that all amc should be registered with state regulatory agencies. additional appraisal challenges include limitations of the current standard forms, the reporting format, lagging the market information, discrepancies in the market definitions, privacy concerns, the funding structure of the appraisal program, and the declining number of appraisals.

ner is the only realistic trade association able to speak with authority on the appraisals and alternative dalia ration products. we have long been proactive in ensuring credible valuation of real property for our industry and increase the all encompassing approach. appraisals are certainly the gold standard. there is a role for the broker price opinion comparative market analyses and the added valuation model. for the subsidiary the realties property recent evaluations committee, ner is able to provide comprehensive data set and tools to assist in determining the credible value. thank you for holding this hearing to examine an issue which is fairer to the cover of to restore confidence in the housing market. ner is dedicated to the idea that homeownership matters. it contributes to the nation benefitting individuals, families and communities. our efforts are directed and ensuring that the dream of homeownership is available to the next generation.

we look forward to working with the committee on this issue and i'm anxious to answer your question. you're recognized for 15 minutes. >> thank you madame chair. i'm delighted to be here again. it's good to see you. i believe that you and your staff have hit a home run if you look at panels that have been put together here a tremendous amount of experience. so many of us have known each other in this business for so long and i won't say how long, just to protect the innocent here. and despite some of our disagreements i must say that on behalf of the fair question i will say personally that i loved -- i've been working with appraisers for 40 years, and they are proposing a tremendous

professionalism, and it's been a delight to work with them. my members of appraisers as well because without good appraisers, there would be no appraisal management companies. allow me to summarize my testimony. first, regarding the appraisal management operations, we provide necessary services to financial institutions as well as benefits to appraisers and consumers and of course the mortgage transactions. second, in regard to regulation, we are working proactively with a federal government in the states to implement the regulatory requirements for the dodd-frank act and state legislation. ..

own through the diversity of the lending industry in the competitive marketplace. amc work to matt -- match assignments with qualified local placements. the average appraisal use you look at -- appraiser utilized as 15 years of a experience in typically travels buried when and sees -- they perform quality control functions on behalf of both the appraiser and the lender to ensure delivery of high-quality reports.

member companies rely on competent, qualified appraisers to work and work diligently to ensure quality. as part of the selection criteria our members typically can from the physical location of the appraisers of this. education is what they call gop voted and used to calculate the distance used to properties and other metrics. in addition, objective not to object objective of metrics ared by quality assurance teams who specializes in product development and review. contrary to what has been suggested that directly benefit by having an advocate to a shared appraisal independence to insure no attempt is made to improperly influence the appraisal process. in addition amc provides significant value added services such as quality-control blogger rick , review, marketing, insurance, technical support, and the billing processes.

with loan rate lock-ins' and time sensitive negotiations amc help consumers by reducing the time required for appraisal live free. to my second point regarding regulation, amcs are subject to new regulatory requirements under dodd-frank. prior to the act several states had undergone legislation. we have been actively involved says the inception of these laws and have long supported transparency and an independence in the appraisal process. we believe it is important to work towards consistency and uniformity is to ensure that amcs can effectively operate on a national basis. we believe the present subcommittee and relevant banking hayes sees cancer contribute to ensuring can -- a consistent set of national requirements. when dodd-frank require some that lenders and their agents compensate appraisers that a customary reasonable rate.

we believe the federal reserve board acted appropriately and logically to implement the congressional intent of this provision. recognize that appraisal services are not one-size-fits-all and has created a complex structure for fees that reflect market realities and assures that the appraisal cost borne by consumers will remain competitive and fair. the final rule remains effective without further finalization. we believe the cftc should maintain the criteria articulated by the federal reserve board. to reconsider the issue could result in this confusion and we believe some setting a fixed fee which may not reflect local conditions. since we last met state the been active in establishing registration programs for amcs. by and large states have been diligent with consistently required legislation for a set fee, background checks from employees to maturity bonds, minimum education requirements,

and projections. however, because mortgage lending is national in scope we believe it is important to work toward greater consistency, uniformity in laws and regulations. we are reasonable and appropriate laws as a whole. we also believe the federal banking agencies to provide clarification and guidance for the industry. thank you for the average and its testify and alex towards your questions. >> thank you, mr. kelly. you're recognized for five minutes. >> thank you very much. good morning. members of the subcommittee, i am an appraiser. i have been an appraiser for 32 years. i am karen mann. currently the firm of my -- currently the president of my firm. today i am here to testify on behalf of the american society

of appraisers and the national association of independent see appraisers. the current regulatory structure is a dramatic improvement over what was in place prior to the savings-and-loan debacle. prior to that you could on a clipboard, get a business card, tape measure, go out, and call yourself an appraiser. the problem, it became like the wild west. people thought that they could be an appraiser at any time. thanks to the implementation of title 11, we found that there are rules and regulations that as appraises we had to follow, and it was good. it does not mean that we always wanted to follow rules, but we had to. the role of the appraiser had to recognize that the appraisal industry have changed over the

years. we needed something that was a foundation. now we have a standard of accountability. the standard of accountability was, the basis was to abcaeleven. but the augmentation of the dodd-frank act we will have a fine-tuning of that standard. the appraisal foundation has been and continues to be an indispensable or positive factor in the crook of the appraisal perfection. currently some 65 percent of practicing a freeze to death appraisers are not a part of and professional appraisal organization. the appraisal foundation has been an important element. professional appraisal organizations have been around since the 1930's. however, the presence of approximately 65,000 licensed and certified appraisers relying on some source of a foundation requires that you and the

implementation of the implementation foundation guidance. that foundation decisions involving standards, qualifications, best practices, and qualifications are made in a transparent manner and are open for comment, review, our recommendation by appraisers and stakeholders. improving the current system is currently in process with the proposed implementations of the appraisal portion of the dodd-frank act. the current regulatory system is adequate. however, we recognize, like anything that is being developed one must we get. one must go in and prove it. we agree with the 2012 gao report regarding the need for greater effectiveness at the appraisal subcommittee. we also believe the appraisal subcommittee is showing improvements.

more effective and efficient. we have several issues facing appraisers. first and foremost, as an appraiser customary and reasonable fees. the implementation of the anc, we don't disagree that having an amc is appropriate or could be appropriate. experienced appraisers don't forget to work for the a in the -- amc because the fees are so low. typical and customary to publicize that fees for appraisers are approximately $450. the amcs keep between 30 and 40 percent, which means that the remainder goes to the appraisal. the president has a lower fee, and today's business practice having a lower fee when you are expressing the same makes it

very difficult to stay in business. choosing to work for the amc, which is not a good thing for the consumers. may not be getting the most qualified appraiser. i hear this every day from homeowners to contact me and say this person came from fresno and are appraising property in san francisco. that is 400 miles, and that is a long distance, completely different markets. the next item we have to recognize is that the dodd-frank reform has not yet fully been implemented. the fact that it has not been fully implemented, working on the perception that is going to happen, but once it is implemented we anticipate that the improvement to the entire process will be exhilarated immensely. the good-faith estimate and salomon's mortgage disclosure does not disclose that the appraisal fee paid by the

consumer is actually to pieces, one piece is what goes to the anc and the remainder goes to the appraiser. the property owners should know which part goes to waste because they think, when we go out there, well, we paid you $500 for this appraisal. when they find out that the appraiser is only getting $300 of it, the homeowner feels deceived and wonder what is going on with the process. one other factor that has been a bonus is eliminating and reducing the demand in this. currently it means that prop. of value less than 250,000 for residential and a million dollars for commercial properties, does not necessarily meet a -- the typical appraisal and other types evaluation products may be used. we firmly believe that

compromises the system and it compromises the homeowner, the consumer of properties with less than 250,000 which is a considerable amount when you consider the average price of a home in the united states. finally, we have other issues the day-to-day operations that we don't think your subcommittee should worry about, minor and little issues. we will try to endeavor to participate and encourage and to try to develop processes that work and help the committee and each other improve our system so that we have a professional appraiser group, a professional appraisal for every single consumer. thank you for allowing me to represent my organization. >> thank you. ms. stevens, your recognized for five minutes. >> madam chairman, ranking member, my name is sarah w. stevens, and i am president of

the appraisal of institute, the largest association of real-estate -- associations representing 23,000 professionals and more than half of all professionally designated appraisers. in 2007 chief justice roberts writing for a unanimous judge supreme court stated, valuation is not a matter of mathematics. rather, the calculation of its true market value is an applied science, even aircraft. most appraisers estimate market value by employee not one methodology, but accommodation. these various methods to generate arrange a possible market values which the appraiser uses it to arrive at what he considers to be an accurate estimate of market value based on careful scrutiny of all data available. so true are these words. appraisal methods and techniques required judgment by the appraiser. the choice of methods and techniques of the responsibility of the appraiser. for instance, and valuing a

parcel of residential and commercial real estate, appraisers are trained to decide whether or not to use replacement cost. when and how to adjust for sales positions. these decisions by the appraiser are dependent on the actions of the marketplace and should not be mandated. sadly, this tennant is at risk. the a false premise, timely guidance on methods and techniques does not exist. that practice is a board of the appraisal foundation is attempting to assert itself as the authority over present methodology. a move that flies in the face of the decision of the supreme court case. despite having no authorization from congress in this area, proponents of the appraisal process board are attempting to dictate appraisal methodology. in fact, even though the appraisal foundation maintains that the guidance documents are voluntary, the appraisal foundation is now encouraging states to adopt them.

reference them. the latest document edition of the uniform standards of professional practice essentially codify neman to state law. we believe that congress should exercise oversight over this insidious attempt to confuse the public by suddenly abusing existing congressional party. the appraisal process is not aided by more rules. instead the appraisal profession is at risk of having animation curtailed. furthermore, the appraisal institute supports realigning the appraisal regulatory structure with those of other industries in the real-estate mortgage sectors as a model we believe congress could turn to the national mortgage licensing system which was mandated. overseen by the consumer financial connection bureau. this was not a self-regulatory organization but one that is owned and operated by the state

-- state bank regulators. several benefits to realignment, including enhanced communication among regulators and reduced risk for appraisers. operate -- authorizing this body to assist others within the real-estate sector. set to kennedy for appraisers and appraisal regulators. congress also should remaining days on the issues involving appraisal procurement and management companies, including the payment of customary and reasonable fees and consumer disclosure of fees paid to a prison management companies. we often hear from real-estate agents, homeowners, and others that pre performed appraisers are killing deals and holding back economic recovery. appraisers did not make the market, the report the market. the purpose of an appraiser is not to support a contract sales price, but instead is an

integral part of lender risk-management. in the crisis of confidence regarding appraisals is a direct result of the way in which lenders, which are under the oversight of bank regulatory agencies, --. procure appraisals today. often priced in turnaround time, not quality of service or geographic or market competency of the present. the dumbing down of appraisals cannot continue, and we ask congress for its continued oversight. lastly, we know nothing is perfect. the regulatory system that appraisers operate with today is 20 years old. we believe it is time for a fresh look. a phrase it -- appraisers do not need a set of archery rules. as the supreme court has kate -- stated, the forefront of the appraisal process and is essential to maintaining its integrity. we asked for your oversight of these matters. i think you very much for the opportunity to be year, and i will be glad to answer your

questions. >> thank you, ms. stevenson. now proceed to questions from the members of congress. i would start with myself and give myself five minutes. the appraisal subcommittee is in the process of developing the new standards will rules as required by dodd-frank. the dodd-frank was enacted in 2010 to almost two years ago. and this question is for all of you. do you believe the appraisal subcommittee has been affected by taking more than two years and still counting to comply with the dodd-frank act? lets start with you in just go down the line. >> thank you. i think that is a very important question. >> turn your microphone please. >> i'll move closer.

we are anxious for the appraisal subcommittee to move ahead very quickly in this space, particularly with regard to monitoring the activities of the other provincial regulators. we have raised issues such as the quality of appraisal compensation, such as issues with regard to expanded use of automated valuation models to, in fact, result regulators. despite lessons that should have been learned in this crisis, it appears to us working with consumers across the country that the regulators are not acting quickly enough. in so the afc will and should be played a critical role less space as well as, frankly, working with the fha as well. >> thank you. and be brief. i have other questions. >> i think they're doing much better. the appraisal subcommittee today is a far different organization than it was just seven months ago. for the seventh numbers are not

working. i tend to every one of their public meetings. the difference between then and now is night and day. >> thank you. >> the national association of realtors is not have a specific policy related to your question. however, unlike a lot of other federal agencies, the amc operates without an appropriation. an appraiser tax. they don't have the flexibility or the funds to move up in the same way that a lot of federal agencies do. i believe the post of refunding the operation of the appraisals of committee are actualizes densified appraisers. that number of folks is diminishing. >> thank you. mr. kelly. >> thank you. we would like to see the a at sea move a little quicker.

as i testified, states are already proceeding with legislation and other standard developments. and so i believe that the anc could be helpful moving along with their agenda. >> pinky. there is a need for speedy implementation. >> at think you're microphone in. >> i'm sorry. >> there is a pressing need for speedy a plantation these provisions involve in are some important issues. development of quality control standards for automated valuation models, establishment of an appraisal complaint hot line, and this the fpd consideration of whether the banking agencies' existing dollar threshold or the the memphis is adequate. we look forward to this. >> thank you.

ms. stevens. >> yes. i think one of the biggest problems that we see is that the current structure really a sense that the states are not capable of ministering this entire process of certification an entire process overview. who would like to see that changed. that is one of the reasons you make the suggestion that a good look betaken, the way that our whole entire system set up. >> thank you. two questions that are just a yes or no answer. the first one is, and we will start with you and go the other way. is the appraisal subcommittee affected? >> in my opinion, no. >> i believe it is. >> yes. >> needs improvement. >> another question, yes and no.

should congress consider a complete overhaul and approve it for consumers and businesses alike? >> at think their is a serious need to look at -- >> s are now? >> yes no, their is a need to look at it. >> mr. but mitt. >> no. >> gregory. [inaudible] >> kelly. >> i wish retirees elected. >> improve the existing system. >> thank you. my time has expired. mr. sherman from california is recognized for five minutes. >> thank you, madam chair. the gmc has created this new uniform appraisal database, the uap, which is used of gst appraisals and also for the fha. how is it all working at?

fortunately i have not had to complete one of those reports. however, i have heard from dozens, if not hundreds of appraisers. >> could you be a little closer to the microphone. >> i have heard from dozens, if not hundreds of appraises about their experience, also from consumers. the uad method of reporting was not implemented to enhance the quality or the credibility of an appraisal report. what it does enhance is data gathering. it does not improve and appraisers performance or ability to accurately or credibly estimate an opinion of value. in fact, i believe it makes the appraisal report more confusing and less useful to the consumer. granted, the consumer is not an internet user of an appraisal that is completed for mortgage finance transaction. however, the wording in the form

clearly anticipates that the bar will be placing some credence in that, and the report, according to federal law, is required to be provided to the bar or prior to the closing of the transaction. that you lady does not improve the usefulness of that report to the consumer. >> at the very minimum we need to change us of the consumer can understand is? >> i believe the reforming is not designed to result in a more accurate estimate of value. it is designed for the convenience of the gst. and things that make things more useful to consumers are very often excluded from the report due to the manner in which the report is delivered to the gst. there is also privacy concerns.

it gst are now insisting on a whole slew of interior photographs. the borrower and sigalert and linda don't control. our members are concerned about privacy. >> the only thing i have been told about real-estate is that has a big debut of location and location and location. what can we do to make sure that the appraisers actually understand the neighbor is there are raising? >> alike saw the discussing concerning geographic competency , i don't believe that it is determined solely by the appraisers proximity. geographic currency is

determined by a appraisers knowledge of a particular market our knowledge of a particular neighborhood or but a particular location. it is also determined by the appraisers knowledge of a particular property type. and competency can be -- is not absolutely positively necessary at the time the appraiser accept the assignment as long as the appraiser takes the steps necessary to acquire the competency. but you don't require competency in a matter of minutes or hours. and i believe that appraisers are fully capable of gaming that -- gaining the necessary confidence if there were given the appropriate and necessary time to spend in the market, interviewed the folks necessary to gather market information, given the time necessary to appropriately complete the appraisal report. >> but even a very competent appraiser who is given just one

job in some community does no he has only paid a few hundred dollars, so he can spend hours and hours studying everything. he is only going to do one appraiser in that neighborhood, it's probably going to miss some things. >> i agree. and i think that the uniform professional appraisal practices provides the appraiser guidance as what to do in such circumstances, and that is to decline the assignment. and i believe, that we have to hold appraisers to that standard, they have to know when it is appropriate for them to accept an assignment and when is appropriate for them to decline this time it. >> if i can squeeze in one more question. our prisons and valuations affecting the housing recovery roared we hope to be a housing recovery jack. >> that is a pretty bizarre

broad question. i believe nine of the concern of the national association of realtors is that there is interference in appraisers and dependants to call things the way they see them. i had plenty of anecdotal evidence of appraisers, and i work and appraise and pinellas county florida. it is a county which is not monolithic. there are areas that are improving, some dramatically, come not -- some not so much, and areas that are stable. there are places that have identified improving areas, and as a result of their data and analysis in reaching an opinion in areas improving have reported that the to their clients. ..

>> thank you, madam chairman. i guess this panel doesn't -- we really do you want have a mortgage broker on here. we don't have those dealing with these problems, but the debt of 80% of the appraisals are done with refinances so let's put those in one category. that's someone refinancing the home, whatever. they were so first time at changing the landscape that even though congress came back and said, no, we don't like that,

fha never listened. they are still implementing the concept of h2cc which was a disaster. it was a time like ordering an appraisal when a mortgage broker, now called an originator, could do something. they are excluded from the price processes. a lot of times a realtor has a client, a mortgage broker, they tried to figure out what the house is going to sell for, how the buyer will buy it, and they can do an appraisal, and the lender appraisal is not in the same line, is there an error in the appraisal, different issues to consider here? those are off the table. in dodd-frank, i made sure that language included in there that said appraisal would be portable, but they are not. they are just not, you know, it's not being done. you go to one lender, and they do an in-house appraisal. they are not giving if to the other lender. they pay for two or three

appraisals when it could have been done the first time by understanding what the house is really worth based on somebody cease understanding of what an a-- somebody's understanding of what is an appraisal and who should do an appraisal. geography, should that play a matter? i think it should. if he's two hours away, one appraisal in a neighborhood, that makes it real tough. when you deal with a market place that's tough, is the appraiser likely to say, well, i should forego taking this job when i could go to the computer and come up with something. there's an inherent conflict in the industry when you put that on the individual. it's tough. people try to grow businesses back, but it's not taking place, and the problem i have is, else the industry today you aparade

those, and less on site looking and making sure they know the distress sores. you've got to drive up to the door and look and understand what you're dealing with, and it a applies to new marketplaces today when i don't believe the country, the economy is not coming back until the housing industry comes back. i just don't believe it. when it comes back full swing, and the economy turns around, you got builders in communities buying lots basically because of the market in recent years for less than the costs of the improvements. you got an appraiser value less than it costs to do the improvements today, and by the end of the day, land is supposed to the free, but it's not, and all new requirements placed are there.

it's what fair market value is for the home in today's market. when you have a buyer willing to buy and a seller willing to sell, and the appraiser comes down here, everybody's looking at each other scratching heads saying what do we do? that's where the problem is today. you need to be able to say i think you made some mistakes in your appraisal here, but you can't do that. conflict of interest almost the way they look at it. you have to get back to some realistic approach to the concept of value at market rate and putting a lender together with the buyer and seller in the market place. we are hurting ourselves and the economy by not realistically looking at that, and i guess, when you look at the state of

appraiser selected from individuals assigned based on completed performance of appraisal, knowledge of area, and type of a product, ms. stevens, is that happening? it's not what steps are being taken to make sure the apray ser understands what they are looking at, but saying we restricted it and that we not come full circle in correcting it. >> we're hearing from many appraisers and clients that this is not happening, that we are not sending people into an area who are familiar, and one of the big problems is, again, that most of the function of today's residential lending market is vested in hiring people based on fee and turn around time, not saying that all of amc's out there are not doing a good job, but we are saying there are instances where people are traveling great distances to

work on the residential assignment, and there's qualified professional people in the area who would do that job if the fee was -- >> the problem with traveling that great distance is it's a cost factor for the appraiser. they are traveling. they are not doing something else. it's time lost in a car when they could do two appraisals somewhere else. i think that's inherent conflict in the industry today is nobody wants to turn the job down, and i don't blame them, but there's not adequate compensation based on the impact associated with what they have to do to get the appraisal done, expect a reasonable approach to the process, and i know you are generous, madam chairman, and my time is up, but i have eight more questions. i yield back. thank you very much. >> can i insert into the record a written statement by william kindwell, advisory group,

aimmad. >> without objection. >> thank you. >> also, mr. miller, i have a few more questions, so if you'd like to -- >> [inaudible] >> all right. >> appraisers is one of the most -- i know i said that, but what can be done, in your opinion, to fix the problem? >> [inaudible] >> she gave you the time, go for it. >> i just got an e-mail forwarded to me from a tallahassee appraiser. this appraiser is in tallahassee and wanted to let me know about an assignment he was given yesterday. a nationwide appraisal management company that has the channel 4 appraisal for a purchase located in cairo, georgia. it's in georgia, not florida. if you're interested in working

with us on this and future appraisals, please rely to the e-mail with your estimated turn time and fee. this appraiser is certified in florida, not georgia. that is an example. i don't know how many other appraisers in florida received the same e-mail. that's the driver of who gets the assignment. the turn time and fee. no question whether or not he's certified in georgia or what the qualifications are, whether or not he's a designated appraiser. the problem with that, and i do like appraisers. >> i'm not impugning anybody. don't mischaracterizing what i'm saying. everybody's shopping for business today, when a lender receives an estimate from this appraiser saying we'll do it for this amount of money, and the appraiser says it's a good deal. i'll let y'all continue.

thank you. >> first of all, if i believed that consumers should be entitled to an appraisal report that is commensurate with the fee that consumer pays with the report. they are not getting that now. they get only a fraction of what they are paying for because the fee goes to a party other than those completing the assignment. the bulk of the fee is going to an organization or company that adds no value to the transaction. they are strictly a broker, strictly a middle map, and despite all the claim of the quality control and adherence to qualifications, in most cases, it is not. it is simply a means of siphoning off money. very often, the appraisal company is associated with or affiliated with the lender. it's the means for the lender --

>> on a contract basis? on a contract basis? >> yeah. we have to think that the consumer needs to get what they pay for, and if the servicerments to use a management company to bloker the value services, the mc claims they operate an agent for the lender. well, by golly, let the lender pay for that service. don't make the appraiser pay for it or don't make the stiewrm pay for it. the lender is the one who gets the benefit, make the lender pay for that benefit. >> i agree. i guess i'm admitting i'm getting old, but i've been in the real estate and building industry for 40 # years. i have tremendous respect for appraisers, especially when i made applications to a bing to build a subdivision, in-house appraiser to get a fair value, and they took the risk in giving me the money. they did a fair market appraisal. they did a good job.

when we buy or sell a house, they praise the individual house, and they appraised the house on a block away and appraised the house a mile down the road and understood the area. what we do with hpcc was overturned the apple cart to such a degree nobody's figured out, although we directed them how to put it back the way it was, government doesn't change rapidly. for some reason they did with this, but coming back the other way, it's not done a good job, but a misservice to those in the industry, it's hurt them, created a situation where the lenders are no longer having appraisals to compare with theirs and can't deal with issues of errors like in the past. appriser paid for it, and it's propriority. there's a situation where they bid on a bulk basis, whoever gets the best price gets all of

them irrespective of the letter on geography. i took notes on what you said earlier talking about geography. you talked about fully capable and talked about guidance. every one of them was followed with an "if," and proximity doesn't matter if, fully capable if, provide guidance if. the problem is finding if. i don't know what the definition of is is, but if opens up a huge problem we started, and we have to correct. now, the realtors are out trying to provide to a mortgage and seller, and the appraisals are trying to provide service too everybody putting them in a difficult situation that it's just not working, and we put them in a situation where, i believe, it's stifling the ability of the economy to recover because we have decimated value in homes out

there with this downturn in the economy, and we are not doing what is necessary to build it back up or let it come back on a natural basis. we're stepping it or stopping it there because we mandated things that don't work. now i hope somebody's listening that, hey, we're not happy with what we did. we messed up. we're also not happy with you not listening to us wanting to correct what we did wrong, and that's the problem today. we got to fix it. it's got to be done, and somebody needs to listen and, madam chairman, you have been more than generous. i would yield back my time twice. thank you. >> thank goodness. [laughter] >> madam chair? just quickly. i appreciate your description of the plight and agree with what you said, however, i don't

believe we should legislate on the basis of anomalies or here say. i've heard stories about appraisers. >> i didn't mean to do that. >> i know you wouldn't, and i appreciate that. there's 350 of them in the country. are they all the best and good? no. are there good and great ones? there are. they do, indeed, provide real value to the process, and the rep piewtble protect appraiser, but they allow for the types of transactions that you're talking about to be facilitated. we mentioned in our testimony earlier that abms a enother

methodologies are utilized to check appraisals or give a sense what the trend is in any given neighborhood and property, and those tools are available and in use in today's world. i was delighted to see my friend using an ipad to give the testimony today, and as you know from your real estate experience, the big technologies of the day, back in our day, was the memory code or card in a electric typewriter. things have changed. things are available to help go to the issues. >> sure. ms. stevens, what's your opinion on what he just said to? >> there's a couple of things incumbent on all of us and that we need to make sure change, and one of those is that lenders are held accountable for these appraisals and for the opinions and for their actions, but we also need to make sure that people who are regulating this

industry, who are the regulators, who come in, are well versed, and that we have a sufficient staff to take care of the problems that are coming, and to make sure that what's happening in the appraisal business is well-maintained and understood as they try to do their job. >> madam chair, one second? i kind of agree -- not disagreeing with what you said, but what i was saying is we all make mistakes. we did. congress did. we came back and tried to correct that, but what we did was exclude everybody from being able to be involved in participating in the appraisal process. use matching appraisals with errors that may have been made. they happen. they just do. they happen in every business, but we've taken and excluded that ability to be competitive, comparative, and being able to deal with mistakes that just occur, and that's where we have

messed up. it's not impugning any appraiser anywhere. it's saying let's get back to a system of accountability and affordability and reliability. that's all i said. if anybody in any way took any statement impugning anybody. it was never intended to be that way. i say "we" goofed up, and other people messed up too. let's correct the mistakes and come up with something good for everybody. thank you, madam chairwoman. >> thank you. in that, i'll recognize myself for five minutes. in that line of thinking, you oured an alternative regulatory structure. how would this structure defer from the one we have today? >> let me start by emphasizing that what the appraisal institute is thinking about and what we are preparing is not a

self-regulatory organization. like some mentioned. self-regulatory involve industry whereas this is own and operated by bank regulators, in this case, state bank supervisors. the fundamental of the state appraiser and certification and license and uniform and standards of professional practices would remain unchanged. at a high level as i eluded to before, the current regulatory structure assumes states are not capable of administering a system of certification, creating a specific agency to intervene with the process. the licensing system assumes that a state can assume the responsibility and administer state certification maintaining the federal presence out of the last report. for many years, congress and others have found a way to vansz

regulator communication, and this mortgage licensing system has developed a solution. we understand they over the system to state regulators outside the mortgage loan business, and as there are common problems that all state regulators face, but would not be e lite for regulators to participate in this system. thank you. >> i thank you, and then just one last question. on page 2 of the testimony, you call stunning and completely inappropriate, a federal reserve rule on customary and reasonable fees as required by dodd-frank, and you also mentioned the rule creates a loophole. would you expound on these points? >> let me catch up with you here. >> page two. >> yeah. creatings a loophole whereas the amcs were allowed to go out and

check customary fees, but within the scope of their investigation, they used amc fees as part of the equation, as part of the array. we feel that customary fees should be outside of the amc realm, and it should be from the general market place. for instance, the da, fha, appraisals done for other purposes whether it be for disillusion or for a state work. get idea what the customary fee is for an independent appraiser in the field trying to make a living in their small business. >> okay. mr. kelly, do you have a response to that? >> oh, yes, i do. we believe that appraisers should be paid appropriately. fees for appraisers,

compensation for appraisers has been set by the market. it's a supply and demand equation, quite frankly. appraisers, indeed, deserve reasonable customary fee to be paid for the services that they provide. the notion that amcs are somehow driving down fees for appraisers, i think, is really mistaken. we don't set fees for appraisers. we work for lenders where the agents of the lender were doing the risk assessment pieces of what the lenders have traditionally done. we provide, as i indicated in our testimony, services for lenders and for appraisers. one of the things that i've been told in all years i was with the appraisal institute that one of the largest costs for appraisers

was marketing. that and in addition tots risk, you know insurance and warranties and those types of things are real costs for appraisers in retail assignments. many, if not all of that, has been offloaded to the amcs, and so there is a share of that compensation. risk and those duties are no longer done by that traditional appraiser and will you do this assignment on 104 maple, and what is your fee? it's $300, whatever it might be, and you strike an agreement. there may be anomalies op that like we talked about on traveling, but they are truly anomalies as far as i can tell. i have not seen evidence of that.

>> okay. thank you. anyone else want to comment on that? >> thank you very much. i think it's important to distinguish what happened over the past eight years. at the height of the market, 60% of mortgages were originated by brokers, the majority of whom were professional lenders, however, and exclusively with companies with bromers, and they overvalued properties. the intent of the code of conduct was to ensure arms length transactions, we agree it should be changed, but the reality today jumping forward to today is some of the unintended consequences of efforts to improve performance in the market place. appraisers tell us, when we ask them about evaluations given to consumers with regard to accuracy issues, in the past, they had a day to produce, or more, to produce an appraisal

for a lender. today, afcs expect two to three in the same time period. the fact of the matter is appraisers leave the practice and profession in droves because they can't make ends meet. that's not a product of quality. appraisers are committed to providing quality products, but it's a product, unfortunately, of a changing marketplace, and what we are not seeing, and i hope we do see back to the purpose of the hearing, is that we do see, in fact, the subcommittee working with the cfpd, the regulators to ensure safety and soundness and the return of robust lending. thank you. >> thank you. i'd like to thank all the witnesses today, and before i dismiss you, i just have to add into the record, unanimous consent to insert the following material into the record, the 2012 statement from the national association of home builders, june 28th, 2012 statement from

the american enterprise institute, june 28, 2012 statement from the american guild of enterprise appraisers, and june 28, 2012, statement from the mortgage bankers association. june 28, 2012 statement for the dallas fort worth association of mortgage brokers,. june 28, 2012, statement from the leading builders of america. with that, the chair notes that some members may have additional questions for the panel if they may wish to summit in writing. without objection, the record will be open for questions and witnesses to answer the questions in the record. thank you, and thank you for the expertise you brought this panel and to help us as we move forward, and so i thank you all for being here, and -- >> thank you. >> with that, this hearing is adjourned.

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> the purchasing power is the weight, for example, of any currency was constant for a period of four centuries. >> it seems the record of the gold standard, in some, is a

record by large of growth and of personal accountability. >> this weekends on american history tv, louis larman and james grant look at the departures and arguments for returning to the gold standard saturday evening past 7 eastern. >> harry truman goes to the white house, and says to eleanor roosevelt, may i pray for you? she says, no, we need to pray for you.

>> their campaigns -- >> there are a lot of promises made. they said they would have to have a large call, larger than this one to get all the people that was promised that year. >> and their ideals. >> calvin coolidge may have been the last jeffersonian who believed in federal power to resist the temptation to extend it. >> this sunday on booktv, questions and comments for david live at noon eastern on in-depth. also this sunday, middle east expert on the obama administration's response to the arab spring and the peace process. that's sunt night at night, part of booktv this weekend on c-span2. >> at the conclusion of the 2-day european union summit in brussels, the president of the european council and european commission spoke to reporters about solutions to resolve the

european debt crisis. leaders from the 27 member states agreed on bailout funds for spain and creating a single supervise ri banking union for the eurozone countries by the end of the year. this is 25 minutes. >> good afternoon, ladies and gentlemen, welcome to the conference after the european counsel. without any delay, i give the floor to the president of the european counsel. >> thank you. good morning, good afternoon. i lost all time sensitivity. the european counsel was about combining short term action to stimulate growth and to stabilize the markets. together, with a long term vision on the way forward to strengthen our economic and monetary union. the key short term challenge

across europe is to revive growth building on yesterday's discussion, we decided, today, on a compact for growth and jobs. it will mobilize 120 billion euro for immediate investment boosting the economy and help create jobs. in the current situation establishing longer term perspective for the euro area is a pressing priority. indeed, as has been pointed out, if you want investors to invest, understandably, they'd like to know where the eurozone stands in 10 years time. yesterday, we discussed the report on the future of the economic and monetary union. i presented earlier this week at the request of the heads of state of government and i made this report in close corporation

with the president of the european commission, the euro group, and the ruer peen cementer bank. as you know, the report outlines and ark architecture based on integrated frame works for the financial center, fiscal matters, and economic policy. there's steps forwards in these three areas that must be accompanied by increased democratic legitimacy and accountability. this are the four building blocks. let me start with the financial sector here beyond general agreement on the longer term view that we already achieve a hugely important first result. last night, we agree that an under the circumstances, and under certain conditions, esn could recapitalize bank's diet, and the biggest and most important condition is setting up a single supervisory mechanism for banks, and

eurozone leaders asked counsel to work in a very speedy way so that we can have results by the end of the year. it's a major breakthrough this night. it is a first step for also to break the vicious circle between banks and sovereignty, and it is a first result of our common report. we said last week that the building block of banking declaration is the most important one in the sense that we can achieve results in a short time frame, and in the banking framework that surveils the european organization surveillance, and we are delivering already a few hours after that we presented our report. on the second and third building blocks of the report, fiscal matters and economic policies, we all share the same analogies.

economic and monetary monetary n only function if each and every monetary function are sustainable. this is the founding contract with common currency. we also took another important position yesterday night in the euro zone discussion opening countries complying with common rules, recommendations, and timetables to make use of the existing esf, esm instruments to reensure and ablizes markets. in addition to spain will be provided for the financing provided by the esf. their european counsel agreed on methods to take forward work on those four building blocks. president of the counsel, i have been invited to develop specific

time when it began in close corporation with the commission, the euro group, and the central bank. member states will be closely involved. they will also be consultations with the european parliament to present a final report before the end of the year will a first report in october. i'm happy to announce another breakthrough and historic one after 30 years of the discussion we reached agreement on the last outstanding issue the steat of the unified court, the compromise, and let's explain this achievement to the prime minister of denmark and discussed this morning for a affairs in foreign policy, and the counsel strongly condemns the brutal violence in syria calling for actions on two

points. first, the present regime to end the bloodshed, and sec, support the political solution for the crisis. on iran's nuclear program, we urged the iran to engage constructively and welcome the entry into this sunday of the e.u. oil embargo. we have good news from the european counsel that endorsed the decision to open negotiations this very afternoon. to conclude, even if fighting the crisis has been european counsel's stop concerns over two years now, and would remain so in the near future, we must not lose sight of the power we had and keep setting orientations for the future. since this happens to be the first summit of my second mandate, i shared with colleagues, and until the end of 2014, this program also foresees

time to focus on specific themes like innovation, industrial competitiveness, trade, an also defense. it was a difficult european counsel summit of the eurozone, but it was a fruitful one. we agreed on the fiscal compact treaty, and we are achieving the first results of our emu report, and we had historical breakthrough of the european pact. the start of my second mandate was a difficult one, but if you can be happy in politics, a hand of upcoming powers, not more than that, a happy man. [laughter] >> thank you. prime minister, you have the floor. >> thank you very much, and just a few -- would like to highlight a few points of the agenda.

i'm pleased that we now have a decided on compact for growth and jobs. there's no doubt we are not leaving the crisis behind us with this compact, but nevertheless, this decision provides us with hope, directions, and tangible results in order to move europe forward in creating new growth and used jobs, and i think that the, on top of that, we have the statement that came this morning, and that at one point, concluding a meeting that's been difficult, yes, but also decisive in terms of where we go next. secondly, i'd like to point out that after 30 years of gorks, we have an agreement of -- negotiations, we have an agreement of european patents, and businesses experience, when we have it finalized, that instead of applying for patents,

they with apply one place. that's something good for growth and business in europe. the agreement is as follows. they may seek asession in paris, the first instance from the member state hosting this central division we have decided to create two sections, one in london, and another one in the main seat to be in paris. i'm very happy with this, and i want to use this opportunity to say that no one can do anything alone, and i want to appreciate the work that we've been doing for the commission, with the polish presidency, and, of course, also because this is a very good, and working together,

and we can manage to have this kind of agreement. this is also marking the end of the presidency and everyone knows this is one of the biggest problems we have with youth unemployment. we pushed reforms of the single market. we pushed green jobs with the potential of creating thousands of new jobs in europe, and we established a basis on the future negotiations of the e.u. budget. we have worked hard in a time of crisis that e.u. is capable of producing tangible results and making decision in a crisis. i look forward to the presidency and want to use the opportunity to thank you very much for the cooperation we have had over the last six months.

it has been excellent, and i think we have truly lived up ho tow you can -- how you can organize decisions, list the treaties, and how you can work together. thank you very much. >> thank you. >> ladies and gentlemen, let me begin with a word of thanks, and the excellent team. they have put an enormous amount of work into the presidency which is being shown as a result that they achieved. i want to thank her for the extremely good situation personally and also our team. i knew that many people was skeptical about the prospects of the summit. i hope they were pleasantly surprised when they heard the news this morning because this european counsel and the summit have delivered what our citizens, our international partners, and investors have been asking for. it has delivered a rebust set of answers that strengthens

confidence in europe's financial stability. let's see how. we have agreed short term measures to support countries and the market pressure. following the presentation of the emu reports, we have now clear commitment to a single banking supervisory mechanisms for the area. we have a clear commitment that when this advisory mechanisms for the eurorow area is established, it's possible to direct organizational banks by esm and strict conditions. we have an agreement to waive seniority of loans for spain's financial sector for recapitalization and the esm. again, we have decisions that were unthinkable just a month ago. commission -- it set up the

levers for mobilizing funds. i was making the case for many of the ideas when it was unfathomable to do so. boosting the landing capacity of the banks, lunching the first project bonds, directing funds, and we now have full agreement on this. we have also recognition among the government we cannot separate on growth or debate on this we have a convincing

vision, and the report presented to the counsel on the e. -- emu. we have a clear commitment to simplify what i can call a banking union. ..

to match our growing dependence and need for financial stability. i'd like particularly to highlight the agreement of the european council as a whole, supporting the statement of the area i can reach conclusions because they are extremely important. following the report presented by the president's council and corporation of the present convention, the group as specific and time bound math for the achievement of the monetary union, he is now being considered, which will include and now i am quoting, which will

include concrete proposals on preserving unity and integrity of the financial services, which will take into account in or out your intention of commission to bring forth the proposal is an article xxxvii of the treaty. it will examine what can be done within the current treaties and which measures that required to change and ensure the member states will be closely associated to the reflection and there will also be consultations so this is extremely important to understand what they are just agreed because in fact it is possible to agree on a single financial supervisory mechanism for the area that will be of course proposals that the commission proposing the ecb to take this stability at the same time there would be a

consideration for all the european union, the current seven-member state, the full respect of sincerity at the single market and in conclusion of the european council, the european council welcomes the statement on the 29th of june, 2012. said very good progress. very, very important steps were taken today and yesterday. >> thank you. time for some questions. please identify yourselves. >> and from the german press agency. to question. overnight, mr. yunker said that today will be a decision announced on the euro per presidency. so if you have any news about this. effectively what has been

described by a lot of media, commentators have some kind of defeat for angela merkel, the shared assessment. thank you. >> just on the nominations, the appointment, we were not complete as the euro zone's done it avms of our meeting at noon. at the german council had to leave the debate in the court decides that we couldn't take a decision because we have to be on the 17th to take decision appointments. but it is highly likely that we can take decisions in the beginning of the month of july. for the defeat and who is the winner and who is the loser, we are not entering into that.

because that is always based on presumptions. that is a broad understanding of route what was it she nhs negotiations that took hours i certainly yesterday. and you can summarize this in winners and losers. we have -- and i say this not for the sake of the argument. we have a common task, common mission to stabilize the year is on and in order to stabilize the euro zone, we have been some way to support under market pressure. but those countries have also to deliver. and so in some way they are receiving some support, it is always under conditionality, even under strict conditionality

peered whom you speak about free capitalizing at the banks, then we say we can only do this really interact capitalization if there is a new supervisory agency when we have a centralized european surveillance of the banks. and this is absolutely key. so there is nothing for free and there's conditionality is absolutely key when we speak about support. it's always responsibility and solidarity. so the two branches of our approach and that's for the last two and half years. it is not agreement, not only in spain, put out the rest is balanced because it is negotiated not only with two or three, but with 17 and 27. >> thank you your next question.

>> john o'donnell with rutgers. >> wave c. of direct assistance from the asn. can you clarify whether this thinking fashion that is liable for the assistance. and if it is the bank, you mention mentioned supervision is the prerequisite. supervisors are typically administered to a finish of the money is returned to taxpayers. i do envision this this will work? >> look, i am not going on to detail. i cannot now go into detail. i can tell you the commission will come at the very soon based on article cxxvii, paragraph 6 for a single supervisory mechanism. and of course we know that it's not the supervisory mechanism that is going to do the rest of the work, but that will consider what the great financial supervision, this is a condition for going on with the idea of

the sharpton position of banks because it's important with full confidence that all systems. and this direct bank will be done for full conditionality but it's also very clear in the conclusions. so, this has a very ambitious timetable. the member states have agreed in the bureau area to consider this proposal as a matter of urgency by the end of this year. so it is not going for, let's say, the long-term future, but yes, we need to agree in the euro area a single supervisory mechanism because it's necessary confidence for further measures, regarding the direct

utilization. i think it's extremely important and ambitious conclusion. and then afterwards we can brief you my people and the people from the council can give you a full technical briefing implications of this. some of these matters you will have a clearer matter idea when the commission we try to expect to happen very soon will prevent this proposal according to article cxxvii, paragraph 6. >> the direct recapitalization of the banks went on but we have it from the ninth of july at the third of july at or from the beginning of next year? >> to my knowledge that is a mission that will be as quick as

possible, but we have to wait first for the results. >> once again, this was not automatically guaranteed and it was an agreement yesterday in a euro summit is that the financial assistance to the banking sector of spain will be provided by the dl sm becomes available and then be transferred without gaining the market that is extremely important. we have not yet set in place. it is through the fsf does she have the support through the financial effect during spain. we are now urging the rapid conclusion, which is attached to this financial support to spain and as soon as it is done, we can in fact provide spain

without gaining the state. and it's impractical and banks. as i said before, we have to wait for the great provider of mechanisms at the european union. >> thank you for the final answer and for your attention. [inaudible conversations] >> this is a conversation with me to have in this country that no one is willing to have. what role should the government into play in housing finance.

>> if you want to subsidize housing in this country and we want to talk about it as the populace agrees that it's something we should subsidize and put it on the balance sheet and make it clear and make it evident to make everyone aware. through these third-party enterprises, if prettyman thank you three public company and can distract the very good way of subsidizing homeownership. i think we have seen that in 2008.

>> earlier this week on the middle east institute hosted a third annual contest on turkey. the centerpiece presidential politics and changes to the country's constitution. it's about an hour and 20 minutes. [inaudible conversations] >> welcome back, everybody. if we could be seated as soon as possible and filling up roads.

my name is the name should be and not be half of myself and the institute i would like to welcome you back again. where in a very tight schedule and some of you have been coming up to us, myself and saying this is so aptly timed. i assure you neither dr. torre had anything to do at the time that these events and were happy to have so many view coming to participate. my job and this is minimal, so i will not keep you for long. i would like to introduce one person, the moderator, dr. michael wirth, a senior fellow at the center for american progress and has kindly agreed to moderate this panel. and he, just to briefly introduce him, he is at the -- at the center for american progress has worked as a national security team, focuses on the next visit climate change

can especially turkey, mexico and brazil. he has been a transatlantic fellow at the german marshall fund of ours were focused on transatlantic foreign policy and european union. dr. werz has published several books with a wide range of scholarly and policy issues including race, ethnicity in the 20th century the western social and intellectual history minorities in europe and the united states. he's also currently an adjunct professor at georgetown university bmw center for german and european studies. dr. werz. >> thank you rematch for the opulent introduction and for putting together such a great conference. we are going to talk about a number of issues right now better at the forefront of debate within turkey. in the country, as all of you know has had an interesting conversion point. you have to a certain degree cumulative challenges are crazies. there is a question about a setup of a presidential system

and the future of the political structures in the country. there is obviously still the lingering conflict which has flared up recently with the fact that the kurdish opening date d. akp engaged early in the tenure has slowed down considerably and also discussion and press freedom. and on top of that capacity in all of these discussions about the new constitution which brings together all those debates. that's an interesting point in time because it's a city issue he government has been elected with the 50% after 10 years in power doesn't seem to be able to move as quickly as some of us would like it to see moving. at the same time turkey is

ongoing internal transformation. turkey is one of the countries. middle-class people making more money or stability rule of law, better education and a voice, a political voice to be part of a political discussion that affects them individual and collective ways. i'm glad we have a panel to shed a little light on all of these aspects of the ongoing internal discussions. hopefully being able to bring them together and come up with a better notion of what is happening in turkey today and maybe even some ideas and suggestions as to where the country in turkish society might be heading. let me briefly introduce or three panelists. i'd also refer you to the printed to her face.

rusen cakir will start us with the political situation in the country. we would then have a statement by michael gunter. he is a professor at the tennessee technological university. he will focus on the perennial question of the kurdish minority rights and the current political situation. and then lastly, levent koker, law school professor at university and gravel wrap it up and talk about the constitutional debate as i mentioned before brings together issues that are so important to understand what is happening in turkey. and they just finished the introduction by saying that often in the united states and other countries there is a lack of understanding the domestic transformations to the domestic dominican turkey and for that reason if we want to give foreign policy right and strategic u.s. turkish partnership which has the potential to become one of the top three or four or five

partnerships for the united states, i think a meticulous differentiated understanding what is happening inside turkey is important. if it is only tunic sure we don't have a shortsighted and abbreviated notions of turkey shifting from one to the other, but totally understanding turkish society is modernizing at the rapid pace is driving developments not only fascinating but also potentially to transform the entire beach and baking it not only an important regional player, but only stability and partner for the united states work with. without further ado, i would ask rusen to begin. >> for the first time in my life, i am here as a panelist and i am very, very happy.

very much thanks to the middle east institute. i know that we are talking about turkey. from the middle east institute asked me to talk about turkey, so i might be softer than others questions, but this information that is happening would be very useful in two years for everybody who is really interested in what's happening in turkey. we case two years later for the first time in turkey history, it'll be a lack to to secure the commerce for the person who would be a lack that. the first president of the public alike they. today's perspective, we have two

major candidates. first one was the lack of it by the turkish 2007 and the second one, prime minister is a prime minister in 2003. they regard each other not just as france, but also as brothers. they began for many years and started in that year and 1990 and side-by-side with the foundation of the justice party.

they ponder the party. the prime minister of the government because in 2002 -- october 2002 was banned by not alike as deputy. but in 2003, he had the chance to be elected and gave the prime minister he and became the vice prime minister of relation. we should look at this -- he's president for five years and he is not used his power to challenge -- to challenge the

government. they are altogether the prime minister to act on the parliament that dominated the party. annette can't observe what hundred%. but more cautious observers like guys, journalists, we can't state that tried to sit stand from the government, especially regarding the issues of fundamental rights and freedom, especially press freedom issues that senator mccain referred to during his speech. is there really is a grave question of actually a journal?

it is a very big problem. and in this problem, for example, some differences more than are between. the question is here that there's a problem within these two are conference between these two brothers. there is an analysis in turkey that the government of party that the question is. and i'll turn that to a party that will come out because all of the opposition parties improve that person. people are looking for an alternative.

so this equation can observe, can discuss the relationship. and don't forget that he wanted to be elected at princeton in 2007. but he changed his idea, but we know that he wants to be president at the republican turkey. and this time the vb observers agreed that he really was this time to be elected at president of the republic.

but more than that he preferred the financial system. he is not satisfied with the factual rights and responsibilities and authorities said the president of the republic. he wants more. he wants to establish the national system. according to the discussion -- according to this debate, we can say that he's much more interested in the financial system like in france that deserves the system in the united states. and he proposed the presidents. until now, in turkey, all president of the public should have political parties and

engagement of the president in turkey as anti-constitution. but wants to change the constitutional principle and he wants to establish a system that a president would keep his or her relationship -- his or her political party that controlled. that so many people came out and they do not agree with him. this discussion that the this discussion that the ms. purdy about five years ago proposed a national system for

debating an actual member to openly, publicly criticized the proposition and the second time , the difference here to get them up to do. , we can estimate that they are not back. so another good question is the stem and opposition the party from that president have republic.

not the biggest question of turkey maybe it's the lack of opposition. there is the may not position of party. we call it stand to the left, but i know that i am not sure about it being to the left or not. but chb and mhp, turkish national party a really good friend 2002, beginning of the government are still losing. so we cannot look at an alternative within this positional party. it is coming from the political moment. we will talk about this, but i can say some about this.

only the political movement led by pkk can challenge this moment, can challenge the government and because of this reality, every people or circle of power who want to challenge our party or our government have one alternative to invade it. but the question here is that the kurdish political movement can challenge this government and can collide the country economically, politically, but they cannot be an alternative because then you look at the democratic of turkey and we know also that all kurds