>> talking about medicare reform was a third rail of politics. it seems more people were willing to discuss serious ideas about having to save medicare. any serious effort to save medicare needs to first take a hard look at recent reforms and what they tell us about what works and what does not.

obamacare transporters will old last month and it raises the iconic question, are you better off than you were four years ago. the answer for the nation is an unequivocal no. jobs have been lost on our seven cut, employers have been forced to drop coverage and premiums have skyrocketed. millions have lost coverage they were happy with. obamacare has hurt medicare by cutting $156 billion out of medicare damage. this cut was a grave miscalculation. medicare advantage is a shining success story the millions of seniors like my mother relied upon. in short, it's a program that allows you to receive your coverage from a private provider using funding from medicare. and this tax on all kinds of value added services for seniors. one of the reasons my mother picked her current provider is

because in addition to good doctors coming to pick her up in a drive her to her appointments. this sort of competition in the marketplace invariably leads to two very good things. a decrease in prices and an increase in choices. and this is also at the heart of another medicare success story. medicare part d. this market-based program, seniors have at least 28 different prescription drug coverage plans to choose from. and this competition has worked as a powerful cost control mechanism, this has made it a booming success by every conceivable measure. the congressional budget office found that the total cost on track to be 45% or $340 billion less than the initial ten-year projections. average monthly premiums are expected to be $31 and 21 --

2014. 95% of seniors enrolled find it convenient for their needs. what comes to a broad and comprehensive medicare reform plan, let's learn from the mistakes of obamacare and the successes of programs such as medicare advantage and medicare part d. let's dramatically expand health care choices for seniors, spur competition in the marketplace and extend the solvency of the medicare trust fund while making sure that traditional medicaid remains an option. in order to do so i propose that we transition to a premium support system and to give seniors a generous with fixed amount of money with which they can purchase health insurance from your medicare or from a private provider and the choice would be theirs tonight. my friend paul ryan is a leader when it comes to medicare reform and i supported a couple of key proposals to fix the program that were detailed during my 2010 race. since then he has teamed up with

senator wyden to propose a bipartisan plan to institute premium support model. under plans such as these, the government contribution would be part of traditional medicare or whatever it to this. this way the seniors choose the plans that cost more than a benchmark and they would have to pay the difference. but if they choose the cheaper plans they would choose to keep the savings. and this includes traditional medicare but for less money. the cbo predicts that medicare spending under a premium support plan would be 14% less per person than under the current

system. and this extends an impartial hand to all seniors for generations to come and i was standing in the alternative is welcoming our first child home, as these years go by an older i get come in the more i am reminded at how quickly things move and how it's never too late to start planning ahead for the next phase of life. as a citizen and a husband, this means saving for retirement or add it means seeing what it will take to be ready when the time comes. a member of the united states and i'm sure another responsibility. the responsibility to save the time honored institution that has long been that the service of the time-honored among us.

and this includes comfort and peace of mind. the responsibility to aid these programs forms to all who are elected to serve. yet many seem to have forgotten that we are here to pass. not posture politically. they forget that issues such as these are the why of politics. not just optional dirty work. partisan politics in america has always been contentious. but throughout our history, this issue of importance come our leaders have agreed to put aside politics for the sake of our people. if ever there was an issue worthy of the solidarity, and should we fail to address it, history will point its finger at all who stood aside or stood in the way.

today i present an agenda for addressing this crisis head-on and i'm eager to work with anyone, republican or democrat who will work in good faith on these reforms. and ultimately i believe we will solve the retirement challenge before it's too late and we will solve it because rising to challenges is what we have always done. we will solve it, because we must, for the sake of our children and our children's children, we will solve it because once we do the american dream will be brought within reached. and history will continue to shine for many generations to come. >> thank you, senator rubio. [applause] >> what you believe would be the consequences of failure to take

legislative action? >> programs will cease to exist as we know. the longer we wait, the more disruptive the changes will be. that is what i want is to avoid. the moment of truth will write one way or the other. at some point we simply don't have enough money to continue to offer the benefit. and we never want to reach that point. the closer we get to that moment in time from the more disruptive and chaotic it will be. and the longer that we wait in the more disruptive this will be, the more significant reforms will have to be in the deeper the climb will be. if you do this with some foresight you will be able to gradually to bee stings and worried it will not impact the

current beneficiaries and will be somatic for future beneficiaries. >> you believe that social security finance personal savings need to be enacted together or is it sufficient to take these objectives one at a time? >> i don't office processes conducive to doing anything at one time. but i certainly think that they both need to be done. every year that goes by it will get harder to deal with social security and the solutions can be more disruptive and painful. and this includes those that don't offer a retirement savings vehicle and they could go into a financial institution and apply for it.

so you probably neither have the time or the inclination to go to your local financial institution and apply for this even if you make enough money to be able to say. one trying to do is create an additional vehicle that is easy to access that allows those two keep pretax money aside and compounded over the years. and if we'd ever do have a retirement plan, they could roll that into their new employer's plan. but i think it's critical that we create more awareness and access are people to be able to put money aside pretax way for their retirement. >> how would you propose making up for lost revenue putting these dollars into it? >> a couple of points, many people who take advantage of this, their income is at a level where they are not a significant part of her income tax system and they are paying payroll taxes. but many people are not making that much money right now which

is one of the challenges that they have read the other thing is long-term. this is the cost of government that they can absorb one way or the other. if they don't have significant retirement they will have need and we are a nation of compassion that is not going to allow people to of her. we are going to address in one way or another and i think better to allow people to address it for themselves. but it will be significant enough for us to create another option and just because you were to wonder where they don't offer offer a pretax savings plan, were not going to make it easier for you to access this. even if you have the legal right. i think it's important for all americans have the ability to not just know about pretax savings for their retirement, but the ability to do it.

it's good for our country and our long-term finances. >> why does it take so much legislative attention to improve this were seniors? spirit partially because it happens on any level. a part of this is due to the people on both sides of you out to say this is a priority for our country and part of it is we are trying to make this nation from the last century to a new century. and this is also true in the private sector and we have so

many people over the age of 62 who want to continue to work that are still productive and were quite frankly, not only because they need to but in many cases because they want to. >> averages like to hone in on the specific questions. do you think social security and medicare benefits will still be offered when you reach retirement age? >> that is actually a choice. if you want them to be offered, we will have to make some changes due to the way that the program works for my generation. i think that is important to point out. i am discussing changes and it

will look different because we are going to work longer and longer than our parents generation and we are going to have to make that acceptance. and i think my generation is good about her at that. that's a choice we're going to have to make. if we do not make these choices now, all i can tell you is that from the budgetary figures that are available, these programs will not exist. the question is not if medicare will be reformed that they will be reformed one way or the other. the question is whether they are performed in a way that is less disruptive and more productive or in a chaotic emergency way as we have that moment of truth.

>> earlier this week he rejected scientist assertions that human activity is causing climate change, and how does this work

>> what other conclusions have you done that human activity is not to blame for climate change? >> i have never disputed this and i have pointed out that it never static. but that's not a question before is a policy. the question before me is a policy is we ban all cool in the united states and if we ban all carbon emissions in the united states will it change the dramatic changes in weather impact that we are reading about. anyone who says that we will is not telling the truth. the truth is that the united states is a country. it is a planet. there are things we can do to become more efficient and develop alternative sources of energy and things we can do to be better in the stewards of the resources that we have like natural oil and gas. but for people to say if he passes bill that i'm proposing,

this will somehow lead us to have less tornadoes and hurricanes, that's just not an accurate statement. that's what i take issue with. >> how should the united states prepare itself and its citizens to deal with rising sea levels when the catastrophic one is likely to follow them at. >> as we pointed out earlier, have no problem with the mitigation action as we did in my time as speaker of the house. we were hit by five hurricanes in the summer of 2004 and 2005 and we took steps to encourage people by finding savings and insurance programs to earn their homes against the occurrences of these storms and likewise we would spend an extraordinary amount of money and drainage programs in florida and especially in south florida because much of south florida is built on a former swamp called

the everglades. and we have developed very expensive population centers that are avoidable or natural disasters. whether it earthquakes in the west were tornadoes in the midwest or hurricanes in the southeast or tsunamis in the asia pacific region. the bottom line is that natural catastrophes have always existed and as we build out population centers, we will have to take mitigation action could account for that. >> turn into another subject, a year ago you were a key figure in shaping a bipartisan immigration bill that passed the senate and was installed in the house. what are the chances that immigration will move in the house this year.

>> i'm not a problem encased in business we have in immigration system that is not responsive to the economic realities of today and that needs to be reformed. we have an immigration system that takes our economy and mayor and skills and to mine and quite frankly we propose is in the senate to do this and it shifts our immigration system from one based on family reunification towards one built on merit and skill. and this includes the hiring

here and we have no effective way of tracking visitors to our country and to make sure that someone exits before the visas expire. in the absence of reform, we are going to continue to have an immigration problem and then we have the reality of 12 main human beings that are here legally but they are here. and while we debated this issue there was a lot of opposition to it, not a single member of united states senate filed an amendment that would call for the rounding up the deportation of 12 million people. and the reason why is because as a country we're not going to do that. or also not going to blanket blink at the honesty. somewhere along the line we have to adjust that and there are 12 million people here and we have to ensure that never happens again and we have to deal with that reality and i'm obviously open to those suggestions and that has to help in as well as part of the reform. i think the impediment is that people are concerned that we will only do the aspect of this

legally but never we will you do the reforms to the enforcement programs of what they fear in a decade for now we will have a repeat of this problem as happened after the 1986 reform. so critical is achieving medical reforms on the front and to not just modernize our immigration system but to put in place verifiable enforcement mechanism so that americans have confidence that we are dealing with the problem that we have now and this palm is not going to happen again. this is the impediment that we are facing right now. >> your participation in these negotiations cost you some supporters and conservative republicans of you have any regrets? >> i regret that we did not get more support for it because it's an important issue that we must tackle. i ran for office to make a

difference. i understand politically and i knew about the perils of this issue go in an unfamiliar with its history and the reason why it hasn't passed over a decade and quite frankly, much of the opposition that we faced was legitimate objections of people hot and real concerns that need to be addressed. the flipside, of course, is i came here to do something and i understand that politically easier thing for me to have done is to let someone else the most propose a bill and file a bunch of amendments on how i would do it if i was i was in charge of some of them in and say this is what i would've done and i get that politically that would've been a smart thing to do and i actually want to solve this issue and i came here to make a difference. i didn't come to his sign-on for letters and give speeches. i try to propose ideas and one i have those ideas to move forward. and this is just not a theoretical issue, this impacts my state dramatically and i have

seen every aspect of this issue including the good and the bad and the ugly and i believe that this needs to be solved and needs to have a legal immigration system that allows us to have this for talent. this includes our national security and we did have immigration laws that we can enforce and we need to address the fact that we have 12 main people living in this country illegally and this includes one that is responsible and reasonable and their are some political perils. i made a decision when i got involved in public service that i would do so in order to make a difference come and not something to score points and sometimes that makes you well-liked and sometimes it makes it controversial. but the only thing that makes it worth it. >> i do have a few questions in the area of politics.

>> i wouldn't would just say someone decides to run for president of the united stated, i don't believe you can run effectively for an office of that magnitude and others may disagree and choose a different route, but that's my feeling of someone decides to run for an office about important to do so because that's what you want to do and we are not simply trying to find some kind of project button to get out of it but that is your personal opinion. >> i think that governor bush would be a formidable candidate and i know that he is going through his situation but what

he wants to do. i think when someone contemplates running, you do so based upon this great care to establish yourself in this includes the exact same thing. >> to in your estimation is the strongest democratic candidate for 2016, and why they matter. >> probably harry reid. [applause] [laughter] >> i'm not really an expert on democratic primaries. so i don't know the answer to that question other than to lay that we certainly have our own process. and i think any presidential campaign would be highly competitive in both parties are

well-funded. >> we are also almost out of time. but first we have a couple of housekeeping matters to keep maternity care. i'd like to remind you about our upcoming events and speakers. on may 27 and this includes doctor ben carson, neurosurgeon and author. and next i would like to present our guest with the national press club mug. [applause] >> senator toomey mention this was the first time you've spent at the national press club and we hope that you will be back.

[applause] and one last question, if you do become president, which democrat will you invite to your first summit? >> that is a good question. >> the current president has had a few. >> probably joe biden because he always tells good jokes. >> how about a round of applause? [applause] >> thank you for coming today. i would also like to thank the national press club staff including the journalism

institute and broadcast center for organizing today's event. if you'd like more information about the national press club, please check our website at press.org. thank you and we are adjourned. >> tomorrow ahead of the securities and exchange commission and the commodity and futures trading commission will be on capitol hill to talk about redoing the financial markets like coverage begins tomorrow at c-span.org and on c-span3. >> c-span's newest book is a collection of interviews with some of the nations top storytellers. >> i cannot say what the moment was because i've been living in all my life. my parents migrated from the

south to washington dc and washington is where they met and married and then had me. and i grew up with people from north carolina, south carolina, all around. i'm surrounded by the language and the food and the music in this includes how it's been with me all this time. >> elizabeth wilkerson one of 41 unique voices. sundays at 8:00 p.m. published by public affairs books. >> c-span2 providing live coverage of the u.s. senate were pursued in and key public policy

events. every weekend, booktv. for 15 years the only television network devoted to nonfiction books and authors c-span2 is created by the cable tv industry and brought to you by a public service as your local cable or satellite provider. like us on facebook and follow us on twitter. >> last year the senate passed an immigration bill in a 68 to 32 vote. the president supports the senate bill and today called on congress to use it as a starting point that could lead to a compromise measure. the president discussed immigration to law enforcement officials and he has introduced it by homeland security secretary jay johnson. >> we are here this afternoon with sheriffs and police chiefs from virtually every part of the country in support of

comprehensive immigration reform and we thank you all very much for the work that you have done. i have been part of president barack obama's administration often on from the very beginning and i know his views on supporting law enforcement. my best day of as a public servant was may 1,, 2001, the da we found osama bin laden and my second essay was the following week when the president returned to new york city after we got osama bin laden and i was privileged to be with them. our first stop only dutch manhattan was a firehouse and our second was a rethink of the nypd -- increasing of the nypd in honoring those who died on 9/11. i know the president and his policies and i know that he is a great friend to law enforcement and the organization represented

in this room. please welcome with me my boss, the president of the united states. [applause] [applause] >> thank you, everyone. [applause] >> thank you. some of you have had a chance to get to know working on law enforcement issues in criminal justice issues, but i cannot thank you enough for participating today on an issue that i think is important to our economic future and our cultural future and to our standing in the world and also to our safety and security. and that is the issue of immigration. i am here with some of the

leaders with agencies to recognize that this is not just the right thing to do but also the right thing to do or safety and security in communities all across america. immigration system that we have right now makes it harder not easier for law enforcement agencies to do their jobs. it makes it harder for law enforcement to know when dangerous people cross our borders. it makes it harder for business owners who play by the rules you compete when they are undercut by the who exploit workers in this economy, and it makes it harder for law enforcement do to do their jobs when large segments of the community are afraid to serve as witnesses because they fear the consequences for themselves or their families. system is not fair, it's not fair to workers and it's not fair to businesses who are trying to do the right thing and it's not fair to law enforcement agents these are stretched thin.

the senate has every possibility wide bipartisan majority that would go a long way towards fixing it and it would strengthen our borders and even further them. i'm sure jay has talked about the work that has been done over the last five years. >> we have fewer folks coming in than ever before and the personnel around our borders is well beyond anything we have ever seen. so we take border enforcement seriously. what this package would also do is create a firm but fair pathway to citizenship for those who live in the shadows and as a consequence would give law enforcement a better idea of who is in the country.

it would also help to build trust between local communities and law enforcement and immigrant communities. and this includes those it prey on undocumented immigrants and allow us to focus on our primary mission which is keeping our communities safe. this is some of the reason that it is pushing congress to go ahead and get the job done and do it this year. and i hope all of you keep it up because it's making a difference in public opinion is on our side about this. unfortunately, we have a handful of house republicans right now

who are blocking the legislation from getting to the floor and to their credit i think speaker boehner, they do believe that immigration reform is the right thing and they have good ideas and i'm happy to talk to them. and we are not hell-bent on making sure that every letter of what is in the senate bill is exactly what lands on my desk. but there are stronger border security and we have to make sure that we are dealing with us in this includes the legal process and we have to make sure

we have people to have the ability to burn the new pathway to citizenship. >> yet we put them in this tenuous position and it creates a situation in which the personnel who got to go after getting bringers and need to be going after violent criminals and deal with the whole range of challenges and who have to cooperate with the hs brown are counterterrorism activities, you have to spend time dealing with somebody who is not causing any other trouble and i think that i

just want all of you to know that your voices, it will be critical. especially the next few months there are people who can anticipate that this will be in favor of comprehensive immigration reform and people understand there are a lot of agricultural enterprises to know how important the immigrant workers are to them. and that is a powerful voice.

i think portions of the business community and people may not anticipate know that this is the key to our economic future and it will lower our deficits and/or our economy and bring in some of the most skilled people around the world. we want them to continue to come here and that is part of a competitive advantage to the rest of the world and our population is not aging is some populations are because of constantly replenished with folks who are go-getters. and we have this narrow window in the harder it is to get things done and it is harder and it will be a little bit more dysfunctional.

and your voices are going to be absolute critical to that effort and this includes whether it is dealing with counterterrorism issues and this includes preventing activities like this from happening in the first place or dealing with natural disasters were our first responders are always right there on the scene day in and day out and your personal are doing heroic work and we are very grateful for that. and to think you, everybody.

>> tonight on c-span2, a look at the government oversight of fannie mae and freddie mac and then a senate hearing on economic espionage and senator marco rubio proposes reforms to retirement programs. >> on our next "washington journal", we will look at the role and mission and history of the council on foreign relations which was founded in 1921. we are joined by a senior fellow of the council. the u.s. ambassador at large for the soviet union in 1997 for 2001, we will talk to him about ukraine and u.s. auto relations. one year after publishing classified documents, glenn greenwald will discuss his new book on how he met edward snowden. his book is no place to hide, it is "washington journal" live at

7:00 a.m. eastern. join the conversation on facebook and twitter. >> a lot of times you would say, this is not for attribution, this is background and you can contribute to a white house orser something like that. and you can't say that i'm just giving you this now and this is not for publication. >> did you actually do that? did you break on background from this that the white house. >> let me just give you something on that. >> the fatal mistake that i made, and this is, i did not put the state restriction on this. it was available for use as part of the stories you would produce

because the briefing is not unusual for part of the way that people gather information and put their stories together and test other sources and get other information and put together a comprehensive report and deliver to the consumers of news. >> there were 56 questions on what is universal health care. but what about 97% or 96.5%? and i think 56 questions in one area, you can take this girl out for a beer and get her to ask a question and answer a question. what is universal ultrarich mean? >> the ups and downs of the job and how it's changed over time. sunday at 5:00 p.m. eastern on american history tv this weekend on c-span3. >> mel watt is the director of

the federal housing finance agency which oversees mortgage lenders fannie mae and freddie mac. at the brookings institution he talked about reforms to mortgage lending rules and recent changes intended to make credit more available to homeowners. in this includes analysts discussing proposed reforms to fannie mae and freddie mac. >> good morning, everyone. sdies welcome. i am the vice president and director of economic studies here at the brookings speak institution. i am very pleased today to

introduce today's keynote speaker who is the director of the federal housing finance agency. we are thrilled to have them here today to give his views on housing finance and the direction in which he is taking fha. we are now approaching six years since fannie mae and freddie mac wre placed into conservatorship including the profitability ofay the company including fundamental structure that is unchanged. while congress actively debates whether to have a reform on the housing finance from the decision that directs us are critically important in determining credit availability for the housing market and housing affordability and the degree the taxpayers will be a risk of the mortgage market. and doctor lott has been a , prior r and conservator and of the 12 federal home loan banks. prior to that he is a member of the u.s. house of representatives for over 20

years, representing his home state of north carolina after serving for two years in the state senate. before that he practiced law for over 20 years, specializing in onnority business and economice development. enterprises he served on the subcommittees capital market andredit onhe he government-sponsored enterprises and financial institutions and consumer credit on the house financial services committee.rel also in the house introducing anti-predatory credit lending and i am now going to let him take it away. session and after he speaks he and i w will have a question-and-answer session and then we will have nd another question-and-answer session. and we will have a panel of consumer experts that will be moderated by "the wall street journal"'s panel, they willendii discuss the role of the housing market and the role of fannie[aa and freddie. join me in welcoming theu

director. >> well, good morning. >> thank you. let me start by thanking the folks at brookings for hosting us and thinking ted for his kind introduction. i do understand that a number of you have been waiting to hear from me. and that some of you have been expecting me to say some things sooner than now. in and after all i was sworn in onk january 6. fcept for his speech last week about the federal home loan ban system, i haven't heard a word.

not a peep, not a press interview or a speech and not at word. cngress, and has this guy made it cold turkey transition from members of congress, outspoken to polic? regulators? what is up with this? >> in welcoming here today tobut talk for a little bit.ng and you haven't heard much from me, but it does not mean that we have notfh been working since january, the fhfa has carried out the responsibilities as a regulator of the home loan bank.

and this includes the regulator of fannie mae and freddie mac. many of these decisions and responsibilities are considered routine and they may go unnoticed and they are absolutely critical to the effective and efficient operation of the housing financu market. i can't touch on all of thesemas responsibilities and rum embarks today, but i do want to give you a summary of what fhfa has been working on since i arrived. and i hope that this will provide you some insight into the direction that we will be headed in the future, particularly with reference to fannie mae and freddie mac. inva in addition to overseeing our day-to-day operations, my work has of also involved in an overe

assessment of fhfa and this includes the tenacity and dedication of the employees ofna fannie mae and freddie mac to continue to stay the course during these most difficult and uncertain times. and i would be remiss not to acknowledge and thank the staff for their hard work. this has been a constant urgency since the financial market and it has been a marathon. but this has felt like a sprint to the employees. and the people have continued to excel at every step along thedis

way. and i also want to publicly thank the lifelong career in public service of ed demarco, including the time as acting director of fhfa. in the face of great economic collapse, the biggest one since the great depression, they help prevent an extremely bad situation from getting much wors worse. and it's hard to imagine thingsy being worse given the depth of the housing market collapse, bud i very much believe that ed demarco's leadership prevented a deeper financial collapse by stabilizing fannie mae and at mac.

throughout his time, ed was instrumental in establishing the foundation for all the we will do going forward. so while you may know most of my comments today, certain changese in focus, you should know that i firmly believe that we will be building on a very solidus polic foundation. and we have been very focused on the numerous policy decisions that were and are in the of the pipeline and in making decisions isout the future strategic direction of the conservatorship, the principal that ful we are following is how best to fill in to fill our current obligations under current law.

and this means first andd foremost that we must ensure that fannie and freddie operated at a safe and sound manner. n and we will work to ensure a liquid and national housing a nance market. i thought that fhfa is to balance his obligations and this is something i will come back to in the remarks. another thing will be guiding us is that is focused on how we manage the present. the present conservative ships o and the present housing finance

market and under the present statutory mandate.ddie in th the role of fhfa is to manage fannie and freddie and the resut president on the current maatetory mandate. one topic that has not own the agenda because it's not part ofn our. statutory mandate is housiy finance reform legislation. talk and my guess is that there aregn manyut people who would start talking about gst reform, legislation, the monad that i got to fhfa. i am well aware and it should

never be viewed as a desirable escape. and then housing finance reform is necessary. however, congress and the administration have the important job of deciding on housing finance reform legislation and not fhfa and instead the task is to continue to fulfill our statutory mandate to execute our strategic plan and to manage the present status of fannie and freddie. this includes releasing a newher strategic plan for the conservatorship of fannie and freddie along with their 2014

conservatorship scorecard.tain, both are built around threei wod goals, l maintain, reduce, and build. and i would like to walk through each ofpo these goals and discus how they build upon and in some cases the way they deal with pas conservatorship analogous. strategic goal number one is maintained in a safe and sound manner for closure prevention activities and credit activities for new and refinanced mortgages to foster a liquid efficient competitive brazilian national

housing finance market. standin- in our first strategic goal maintains fannie and freddie to. maintain and carry out and strengthen where possible three aspects of their core operations at first we expect fannie and freddie to take actions that include liquidity in the presenl housing finance market and second, we believe that they should continue to improve servicing standards and a foreclosure prevention actions. and third, we can do they have a critical ongoing role in theily pr multifamily sector, particularly for affordable situations.

our overriding objective is to ensure that there is broad liquidity in the housing finance market and to do so in a way that is safe and sound. the main goal is not a new one for the agent he, but we are placing but we are placing an emphasis on that.nd scorecd. we are leaving as the first goal in our strategic plan and scorecard. we have doubled the scorecard 2% from 20% to 40%. and let me rub begin my remarksa about the single-family liquidity byth discussing trigg representation and warranty standards and when these trigger

repurchase demands. and i know that the repurchase risks remain a top concern forto the mortgage industry and lenders believe that there ishei still too much uncertainty in this area for them to ease theie credit and ultimately this underminesss to the goal of improvingafter tenv access for credit worthy er the borrowers. makin th thisg includes lenders lendf over the last couple months and we are making a number of refinements to address some of these concerns.ment for as we authorize their our aowing relaxing payment for representation and warranty welt

believe by allowing twoition. delinquent payments in the first 36 months after acquisition winners will also get own confirmation when mortgages meet performance benchmarks and when they pass a quality controlatics review. the enterprises will alsooan's o eliminate automatic repurchases in a primary mortgage insurance that is rescinded. work in 2014. process worke better for one. we now that more of prevents are needed to provide additional clarity. one area we are proud --

prioritizing is addressing the scope of life of loan exemptions. we know that lenders are concerned about how these exemptions apply to loans that have passed quality control reviews or have met the 36 month as work and we will work toward clarity on this issue. over the course of this year, we will also explore the following. establishing an independent dispute resolution program when lenders believe it repurchase is unwarranted. mechanisms for loan defects rather than relying solely on repurchases and providing additional clarity on fannie and freddie underwriting rules.

there are two other issues i want to comment on that relate to the overall scope of single-family mortgages guaranteed by fannie and freddie. the first one involves loans with debt to income ratios above 30 -- 43%. current fannie and freddie guidelines make some of these loans eligible for purchase when the borrower has other compensating strengths. our ongoing safety and soundness obligations we will of course continue to monitor performance data relating to these factors. the

second issue involves loan limits. as market participants are hfa released a f proposal last year suggesting that the agency might use this conservatorship authority to lower the mortgage amounts eligible for guaranteed by fannie and freddie. many groups and individuals submitted feedback in response to their request for input. i am announcing today that fhfa will not use as -- its authority as conservator to reduce current loan limits. this decision is motivated by concerns about how such a

impacton would adversely the current health of the housing finance market. the next part of our maintain goal involves continuing to he -- and improve service servicing and foreclosure prevention standards. experiences in recent years have revealed serious weaknesses in the servicing industry and in the foreclosure or mention alternatives offered to borrowers. as part of the focus in this stabilizerking to communities hardest hit by the

foreclosure crisis. launching a we are neighborhood stabilization initiative with fannie, freddie, and the national community stabilization trust. phase one of this initiative is a pilot program in detroit, michigan. we are pursuing pre-foreclosure and post-foreclosure strategies that include deeper loan modifications and partnering with nonprofits earlier in the real estate-owned sales process. fhfa believes this will be a win-win for hardest hit communities and for our

conservatorship objectives. we have also received a number of inquiries about changing the eligibility requirements. because the number of borrowers we could add by extending the eligibility date or by changing performance requirements is relatively small, we have decided not to alter eligibility promoters. working to reach our good our outreach efforts to the borrowersely 750,000 who already qualify and would financially benefit from refinancing. we are exploring outreach efforts designed to gain the trust of these in the money

borrowers so they will take action to refinance. it is already in their financial interests to do so. the goal extends to fannie and freddie's multifamily loan businesses. the is a critical part of way 14 strategic land particularly in light of the increasing number of households who are renting and pseudo-phoning in recent years and the fact that the affordability continues to be a significant concern for many households. our way 14y, strategic plan does not require

a reduction in fannie and freddie's multifamily production levels and it provides additional capacity for affordable multifamily projects. consistent with safety and soundness our affordability focus will include multifamily lending for small properties and manufactured housing rental communities, much of which takes place in rural immunities. expect market competition in 2014 to actually result in lower multifamily levels for the fhfa will nott mandate that the enterprises prematurely shrink their multifamily footprint.

i am on to the second goal. [laughter] strategic goal number two. educe taxpayer risk through increasing the role of private capital in the mortgage market. reduce taxpayer risk through increasing the role of private capital in the mortgage market. 's second strategic goal, reduce -- it is focused on ways to bring on additional private capital into the system in order

to reduce taxpayer risk. we have reformulated this goal so that it no longer involves contract thes to enterprise's market presence which could have an adverse impact on liquidity. , the reduced goal focuses on ways to scale back fannie and freddie's overall risk exposure. this approach allows us to meet our mandates of upholding safety and soundness and ensuring broad market liquidity. while fhfa has reformulated the strategic goal, our strategy is to reduce taxpayer risk, build on much of fhfa's past work in

this area. this includes having fannie and freddie conduct additional for theirk transfers single-family guarantee business. these transactions have opened up private capital to share and credit losses which protects taxpayers from bearing all of the potential losses. scorecard requires each enterprise to triple the amount of risk transfers in 2014. fromwill be an increase balanceion of unpaid transfers last year to billion inly $90

2014. on top of increasing the amount of credit risk transferred, the we also expect each enterprise to try new risk transfer structures to assess sustainability in different all of thistions. is consistent with the commitments i made to the senate banking committee during my confirmation process. in addition, we are requiring ongoing reductions in the enterprises retained portfolios. the senior preferred stock purchase agreements with the treasury department require the enterprises to reduce their portfolios to no more than $250 billion each by 2018.

fannie and freddie must develop plans to meet this target even under adverse market conditions. we are also requiring them to prioritize selling their less liquid assets to reduce risk and take advantage of current investor interests. as their portfolios continued to effect is to transfer interest rate risks and liquidity risks from these portfolios to the private sector. multifamily purchases we are requiring the enterprises to continue sharing risks with the private sector which freddie mac does through a capital market fannie mae does through risksharing model. both approaches transfer a

significant risk to a private rocket and have had strong through theeven economic crisis. we expect these models to continue. reductionother risk priority in 2014 involves insurancertgage counterparties. this work will strengthen master policies and eligibility standards for private mortgage insurers. mortgage insurance is a critical source of private capital in the mortgage finance market. however, as we all know, the crisis reveals severe weaknesses in the system. ensure thate is to

private mortgage insurer counterparties to fannie and freddie are able to provide adequate credit loss projection in times of market stress. onto strategic goal number three. strategic goal number three. build the new single-family securitization infrastructure for use by the end prizes and adaptable for use by other process appends in the secondary market in the future. single-family securitization infrastructure for use by the enterprises and

adaptable for use by other participants in the secondary market in the future. 's final strategic goal is to build a new infrastructure for the enterprises securitization functions. of this effort is the common securitization platform and i want to talk about two aspects of this today. first, after extensive and theon within fhfa enterprises we have clarified that the agency's top objective for the common securitization that it is to make sure works for the benefit of fannie and freddie.

over the last four months we have identified the risk involved in transitioning to a common securitization platform and reviewed how to manage those risks. cause of the the many variables involved, the csp effort to the would be preserving too many objectives at the same time. waye any stumbles along the could have ripple effects in the $10 trillion housing finance stake, there is a lot at in getting this right. as a result, our decision has been to de-risk this project. moving forward, we will focus our efforts on creating a common securitization platform that can

undertake fannie and freddie's current securitization outcomens. a successful would be a seamless transition from the current in-house systems that issue new securities for each enterprise to a future joint venture owned by fannie and freddie and operates one system with updated technology. defining the scope in this way building a cspat for a future housing finance system that is not yet defined is extremely risky and could add needless cost. this scope does not mean that oddssp effort would be at

with the future -- future housing finance system or that our process will take place in a vacuum. to the contrary, we are requiring that the csp leverage the systems, software, and standards used in the private sector whenever possible. this will ensure that the csp will be adaptable for use by other secondary market actors including private label securities issuers when the future state is more defined. our second objective for the common securitization form is to singleterprises toward a common security which we believe will improve the quiddity in the housing finance markets.

it would also reduce costs to the enterprises gingerly freddie security hasddie's historically drew -- traded at a this is compared to fannie mae. adding a common single security willnent to the csp scope and the enterprises partners security along with shared contractual and disclosure acquirements. along with fannie and freddie have made great progress on developing the common securitization platform. but all the components of the cst including the common single security will require a

multiyear effort before final and -- implementation. defined the parameters of -- as i have described today we are well-positioned to move forward. throughout this process we will provide opportunities for decisionsr input our along the way. and releasing the 2014 strategic plan my goal today has been to provide a clear sense of direction for the enterprises ongoing conservatorships. implementing these objectives will require ongoing analysis, evaluation, and input. will proceed with these

steps in a transparent way that correlates the feedback of the public and stakeholder groups wherever possible. one example of this approach is our upcoming request for input on the guarantee peace -- fees charged by fannie and freddie which we will release very soon. as many of you know on my second day as director, i issued a directive to fannie and freddie that they delay the increase announced in december of last year. in our quest for input we will pose a number of questions the agency is considering and we solicit and encourage your

feedback. we will review your responses and we will announce a decision later this year that is consistent with the goals that we have outlined in our strategic plan. .e this concludes my remarks i want to thank you for your time today. i look forward to working with all of you as we implement our strategic plan and is fannie and freddie and fhfa implement the 2014 scorecard. thank you. [applause]

>> thank you again. that was a true fix each and -- there.ots in their by, you do not want to talk about housing finance legislation which i can understand. there is something that intrigued me after that. conservatorship should never be it is permanent. i guess my question is i think increasingly likely we might not have a housing legislation or at least not for a number of years and so then my question is, what happens to conservatorship where we are approaching six years, you say it should not be permanent.

do you have the authority to and conservatorship and if so what does that look like, at what point do we say it is over and what conditions have to be met? >> we have the authority to and the conservatorship. the statute gave us the authority to start it. and i think it goes with that. the authority to end it but the alternatives would not be will --e so i think i our role and the reason we worked so hard is to make sure we have a solid plan for continuing the operations of fannie and freddie and the soeral home loan mortgage that there will be liquidity and efficiency in the housing market we continue to operate as we have operated without

interrupting housing finance in this country because housing finance is such a critical part or standonomy to stop in place is simply not an option. we will continue it and our goals are consistent with continuing the operation of fannie and freddie in the here and the now. we will do that until there is legislation passed. be have answered this. the end of conservatorship, you can see the different things being debated on the hill. is they getomes wound down and the other is they

get -- exist as they currently are. that final outcome, you do not do you?he end of, >> all of my focus for the last four months has been in the present and doing what we are doing in the short term letting theress run its course and we will see what happens after that. >> there is a lot in your speech. there is one thing you did not mention. that is principal reduction in principal reductions, the benefit was too small. is stillomething that

considering. this past. know we have evaluated in the short term and found other things that we need to focus on at the present. we continue to study not only that issue but a number of other issues that i did not talk about in today's speech. i told one of their reporters earlier that it would be interesting if all of the things we talked about today, the focus would be on the things we did not talk about. i keep this running list of issues that i call my water hose issues. they started out coming at me as one big fire hose and we have separated them into individual water hoses. there are a bunch of them on a

list that i did not talk about today. principled rejection is one of those. that doesn't mean that we are not considering it. it means that we are not ready this point.t it at and that is the same category that a lot of other issues fall into. chris lovett -- let me take this back to the multifamily caps. i would like to get your sense of it seems to me like you started your speech by acknowledging your predecessor and mentioning a shift in focus or maybe priorities. does this substitute one of the shifts in focus? lowering the cap and giving additional flexibility, if so, what is your thinking on the role that fannie and freddie play in affordable housing? >> i have not thought about this whole focus issue. good,e tried to make

reasoned decisions create we tried to understand the history of how every decision was made and why it was made. i'm not focusing on whether we did not shift focus. everything that has taken place in the past has created the foundation that allows us the flexibility to make good decisions in the present. we actually think that competition in the multifamily sector will decrease the role of fannie and freddie. mean they willl not reach the caps this year. the more important part of it is there seems to be a lot less

competition in the affordable incentivize want to fannie and freddie to continue to play that role in the affordable space because people need housing and they have played the role successfully and with minimal risk through a very difficult time in the economy. it is not as if there increasing risk but for us to arbitrarily decrease your footprint without knowing that somebody is stepping into this space was not we thought was a prudent thing to do. >> in your strategic land newly out a lot of your statutory responsibilities and there are many. so do not envy the task. one of them is you are

responsible to insure that fannie and freddie maintain adequate capital. that is a little bit of a challenge. i am curious what your thoughts on that is, is that something you spoke to treasury about or will this be current policy and how do they build their capital space? >> i cannot control that i do is think. the taxpayer providing significant capital. so capital has not been an issue that we have had to focus on for some time. it was a major issue because fannie and freddie were making draws. their financial conditions have stabilized and while a lot of

their income in the last two or aree years has been recoveries, financial recoveries, tax adjustments that will not be sustainable in the future to my we want them to continue to operate in a sound that.d we are focused on we do not spend time fixing .bout things we cannot control i am sure i would think that treasury would feel the same way but i have not had any discussions about that. me, ither thing intrigued will get the quote correct or close enough. you said that your goal is to reduce taxpayer risk through increasing the role of private

capital. but after that you rejected the goal of contracting the enterprise's market presence. to increase the role of capital. i am figuring out how you square those two. and then you said this is a decision to come so i know that you're are not going to announce it now. in my view you can look at an increase in the guarantees fees as either of those, contracting of the market presence or entering private capital. how does that fit in those criteria? >> we are balancing in a number of instances sometimes what appeared to be contradictory mandates. think it is the role to contract the footprint of fannie and freddie. maintain anto

efficient credit market. as private capital demonstrates it will come into this market and it will be clear that fannie and freddie will step out. that thearily say footprint should be reduced without assuring that there is a responsible way to make the to private capital stepping in for the space. it would do serious damage potentially to the housing finance part of our economy. i think that would be irresponsible. doing something that is irresponsible. i hope everybody picked that up from my comments this morning.

market presence contracts in a revitalized private sector that is fine. said.ctly what i we did not arbitrarily contract them but we think this year the private sector will step into the multifamily space at least none affordable multifamily space. they're already doing it. there is no reason for us to think that they will stop. there are some things that we could do arbitrarily that i we are not intending to do. i will take questions from the crowd. i will take questions from the crowd. what about in the back corner. wait for the mike.

state your name and affiliation and keep it to a question. >> following up a little on the fhfa.sion of the role of how does the fact that fannie mae and freddie mac are posting record profits factor into your thinking about how much they should be helping troubled borrowers undertaking initiatives to stabilize the mortgage market, is that something that is getting some of your policy decisions now? >> i have not looked on -- a lot at profits as the -- a driving force in any of our decisions think as i have indicated already, the record level of profits that you have seen are not sustainable.

they made substantial tax adjustments and releasing those now and we have had substantial litigationeries and that will not be repeated over time. nearing the end of those kinds of recoveries, i do not think we should let profits drive decisions that we make. we are trying to make responsible decisions. we are trying to increase the availability of credit to credit worthy bars. we are trying to do it in a safe and sound way and not be and i do not think

looking at the bottom line is a productive way to try to evaluate how we proceed. back here.the wait for the mike again. rex thank you so much for the small rental properties because that is the 90% of the market that fannie and freddie have not been present in. i wanted to follow-up on one thing you did not talk about. 2008 thataws in enabled the conservatorship also tried to focus fannie and freddie on affordable rental housing in a meaningful way. that has not happened whether it is fannie mae trying to count the blanket loan on the dakota west,ty on central park the ago no property as affordable housing or other devices they have developed.

i would like you to speak to how you better enforce the mission related part of how the -- of the economic recovery act. >> the first step i just heard this morning is changing our focus to pay some more attention to it. the affordable housing goals we're looking at aggressively. they are in place for 2014. issuingbeen issuing -- new goals for 2015. there is a lot of focus on that and it is part of the statutory mandate and the charter mandates in fannie and freddie. seriouslyose mandates and obviously we think that

congress took them seriously. otherwise they would not have written them into the law. we're going to treat them as seriously as we treat every other aspect of fannie and fhfa's's and statutory mandates. i had a question about servicing, one of the issues we hear a lot about contraction of credit is not only on ortiz when you sell the loan but also when you service the loan. ceo jimmypmorgan's dimon said he would not want to serve -- service a defaulted loan. we have seen a lot of servicing transfers, out of any and freddie over to non-bank servicers and in recent months we have seen a lot of scrutiny on those servicers.

i was wondering if you could comment on some of those transfers. what we might be able to expect in terms of regulation on those non-bank servicers and what can be done to give originators and servicers some certainty that if the loan to faults they will properly serve that nonprofit. issues has been a topical because there are multiple things that are at play here. jamie dimon is right when he says it is difficult to service a defaulted mortgage. to -- all it is is collecting and remitting. when somebody defaults a gets to be a lot more complicated and there is a growing industry that some of whomround have more expertise in this area

than the lenders themselves who tend to focus more on the lending side than on the servicing side. and basel three has taken a lot of the capital requirements that may be led to some of the lenders wanting to get out of this space. servicers are not regulated by fhfa. fpby are regulated by c but not on the capital basis so there is a shortcoming there. we can control their relationships with fannie and freddie, right? that is the space in which we operate.

we have looked very carefully, in some cases much longer and more carefully than a lot of people would like for us to look at evaluating when these are madefor transfers to see if -- are these people responsible, to whom are the companies responsible, to whom the transferring servicing rights are being transferred. what is their expertise, what is their history in the space. what kind of capital do they bad,if things start going what kind of backup will the lender provide to take the servicing back if necessary if the service does not. all those factors and we look at

them very carefully in making our evaluations. and then sometimes there are short-term versus long-term competing considerations. the service or might do the servicing better. the longer-term concerns you are worried about, can they sustain it over a long time and we have to balance those. we have been responsible in that space and we are doing a lot of standardsy to develop so it is clear to fannie and when itwhat we expect comes to transferring servicing and they can communicate that to the lenders that they are dealing with so that they to expect when you are transferring.

i think you will find that we will be doing a lot of work going forward in that area. trying to refine what the expectations and standards are. to piggyback a quick question off of that. seems -- and these seem like significant changes. what impact will it have on credit overlays? >> i hope that it will substantially reduce credit overlays and that lenders will start operating more inside the credit box that fannie and freddie have said they will purchase loans in or guaranteed loans in that space. and based on conversations that we have had with industry participants emma my hope is a

positive hope. i do not know when you transfer from hope to an expectation. some of them have assured me that if we can smooth out some of these uncertainties that exist in their space, it would translate into reduction and overlays and it would translate into more availability of credit to people who can afford to repay the loans. and that is what we are very much interested in having happened. haveth me and the crown lot more questions we would like to ask we are past their limit. have everyone join in thanking you want again for coming to join us today. [applause] everyone to remain

in their seat while the director exit the auditorium, we will have the other panel set up while he is doing so. >> thank you all so much. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] [inaudible conversations] asked >> pleased to get into this panel. starting at far stage right, the university of maryland, works of the treasury department, the

georgia of the bush administration. next and we have mike molloy, an executive in mortgage from bankamerica. mike callahan, president of the center for responsible lending and so from credit union. finally mark fleming is chief economist. i'm sure they're very familiar faces of you in a strong. with that, we will go ahead and get started. the changes that were announced late yesterday. to you think those changes and representations and warranties are going to make a winter like bank of america anymore comfortable in removing creditor list? >> what we do on credit, or still reviewing. i think it's a very positive step.

two things. three specific items under in the announcement gist of it from fannie and freddie. as a very positive for steps. he also announced that it will continue working on the things that have been. particularly among the exceptions as well as resolutions. those are also very important steps. i think of it, and i think the directors said these of the for steps toward this issue. the continuing to work on a commitment from the director to read a very, very positive step. different policymakers of the fed and loan officers said that credit overlays werke as a contributor to tighten lending standards. would you agree or disagree with that preface right now? >> of bank of america we focus on making sustainable loans to creditworthy borrowers. reroute their doing that in the

market today. that's what we focus on. i think we talk about that, that will looking at. sustainable home ownership, that's where we're looking today that is so we focus landing on customers, making a sustainable. i think as we moved down this path, you know, mark would be better to talk to the data on this and i would. we are all out there in the market with all the while loan officers making good loans to creditworthy borrowers today, and we will continue doing that. >> i will ask you, some people will hear make credit easier and here it, you know, coming from someone like director what it was, you know, on one liberal member of congress. rick going back. this is terrible. should we -- is that the long-awaited think about this? how you walk through that

balancing act, the policymakers of racing. >> all starts by saying at to start with the joke. on the one hand and on the of the. we evaluate the credit. we have to be a little careful. we're looking at the loans that actually got originated. we evaluate the credit along a number of dimensions. the problem is creditworthiness is defined by the three c's, collateral, capacity, and credit worthiness. we look at collateral and capacity and actually the dti calculation and the ltv calculation is at or beyond what we would consider one normal. if anyone says relative to 2006 ron. we clearly know it was too loose . what i can say is we look across the early 2000 ltv's were more

lax. the market really moves. put it back in ratio well below. that's actually the least handed it's in the press corps. that's where things over the time. in the air in the 2000's 12 percent of all our origination mom's hackers scores of six claman's. today it's. 3%. defined by the dread that betty -- ready in fannie. and not doing very much london. the reason gets back to what we started with. this is uncertainty about repurchased wears one the best

ways to avoid a repurchases to avoid a default. or the best ways to avoid a default is make sure you have a credit or the bar or. the natural tension or all realize. the removal of uncertainty will create more comfort to delve further down that credit curve. we have to be careful in terms of knowing what is and is not a level. there we go. they want to try their reaches the market.

you know, have a feeling you're going to say that the long-awaited think about this. so for people who have not had that much contact with director what before, what you saw today was vintage. people don't remember as much, withdrew the time in congress, your first real involvement with housing was trying to tighten it was roundly criticized or aquifer constricting credit too much. he was the first sponsor of legislation, for example, to oppose predatory lending standards of some of the practices ultimately led the crisis. sustainable access. he very much believes that high

rates of foreclosure are disaster for families, communities, and the overall economy. the middle-of-the-road approach. but i think you nailed it. the problem right now is it's hard to make economic sense from lenders to make loans that have a substantial risk of default who answers not only the uncertainty combined the practices of the gst is to be quite frankly overly aggressive. there were sold lots of junk that very much correctly was put back to the crisis. let's distinguish between those. mortgage underwriting is challenging. at times they have publicly taken the position that loan

file with any defect whatsoever regardless of whether an impact at all on the performance of the loan is a legal basis for them to put the loan back on hollander and force them to eat the whole cost of a default. particularly its it hedge. if you making hundred loans and have to raise the three or four of them can come back to you and you read avalon and not be lost the entire profitability. it is inappropriate place for him to focus at the outset. it wasn't one of the maine bottle necks. i'm very pleased to see them and just that today. >> one of the ashes of an interesting, i took that build and maintain and contract brown

worked at the fha and have before and present it, but kind of changed. instead of contracting we're reducing the tax pair risk. what do you think of that move given that over the past five years to really have not seen any kind of resurgence of private -- either private mortgage backed securities with the jumbo mortgage. >> i thought symbolically the most important thing you said was the change. there's a sense in which the regulator was pushing the enterprises and a certain direction to get them ready for the future system in a variety of ways. we saw that either slow down. shifting from fourth gear the first year. maybe rivers. certainly the multifamily reversed -- not reversed, but

closed with symbolically that's what we're seeing, much more of an emphasis. you can see that in the common securitization platform. the benefit of fannie and freddie, which of course makes sense as a joint venture. setting the stage with competition and entry. and the second part, the resurgent of private will securitization our balance sheet lending goes very well with the credit box issue that everyone has discussed. until there is the certainty on, you know, the warranties and then the fair housing, lawsuits and the sort of state attorney generals from of a variety of factors that is in ending the resurgence of private lending is going to be tough to restart. and it is necessary to have a better system. ..