worse and try to put it back together because it would only hurt people between now and then. >> diane's comments lead into my final question -- but does reform effectively -- does reform effectively makes >> when you go and read about how large they must be, does that effectively force provider concentration, and, in turn, will let force greater insurer concentration. did you have any comments about that? >> i think there is generally a danger of more consolidation. let me also say that some consolidation might not be bad. there are 1300 insurers right now. we do need several hundred. we did not need 1300.

we need more than a couple. i think there are frankly, some predatory-type companies that are not going to be able to make a loss ratios that we are talking about, ultimately, and that might be better for the market, rather than worse. i am not concerned about every type of consolidation. if companies like diane's are taken out, i would be concerned about that. the argument they always use for what -- for why they had to do what they did is that they need leverage against the consolidated delivery system. i think if you look at what we need in this reform, we probably will see, through accountable care organizations, more integrated delivery systems, and generally, and increase the amount of consolidation on that

side. that will give a push for the insurers to consolidate as well. i do think it is a challenge. some consolidation is good, but we have to be careful that it does not becomm too much consolidation. >> cherries, if an insurance company walks into the door -- shares, if an insurance company walks into the door, what kind of reception are they going to get at the justice department? >> they will certainly speak to anyone that wants to talk to us, and we will look at every transaction on its merits. we look at facts. without the markets. everyone knows, health care is a fairly localized market. i agree with your characterization of the blue cross, blue shield of michigan case. i believe that was a case to let folks know she is serious.

it is one to apply across industries, not just in health care. it will result in significant competitive effects. we will move forward, and not hesitate. i think that is the answer. the idea of creating market power to counterbalance other market power has never really gotten anyone very far. >> it is time for questions from the audience. if you could identify where you're from, and give your name when i point yacht. this woman in the black. that is you. >> i am the primary care physician. i am also an attorney. my question has to do with prices. the whole idea of bringing down costs in the new plan depends on price competition between insurers. under the new system, insurers

have a tremendous incentive to avoid sick people because they cannot charge them any more than they can charge regular people. there will be an attempt to make insurance policies more complicated. the most important thing reject the policies now are 70 or 80 pages. it is -- the policies are 70 or 80 pages. it is impossible to compare three policies. they need to put out what they do not cover, what not what they do cover. -- not what they do cover. >> you raised an important point. it is of little bit like pushing in the balloon, and it will pop up somewhere else. when you are constrained in one area, you look at other areas to accomplish some of the same means and the same ends.

i cannot say today that your idea of a kind of foot in the current system where you have a contract that tells you where -- what is covered, is one that we would do or not do, but i think your overall point of been extremely vigilant in understanding the consequences of different rating rules, and how that will play out in terms of successive carrier practice is something that we are very much attuned to, and we believe is an important part of what we're doing now, and what we will do in 2014, in addition to things like simplification and plain language. you raise a good point occurred >> it is an interesting concept. that indeed is what the policies are today. if they covered everything, -- the rest of that policy, is

defining what is not covered. it is very hard to get it, conceptually, to what the right solution is. i'll say one other thing in defense of the industry. as a whole, it is only part of the problem on cost. the cost control issues are properly identified in this bill around the delivery system. we need to have the best available evidence standards. we need to have better well as incentives. there are things on that and they're really cost drivers. the insurance industry is largely a mechanism for financing health care. it does not mean they do not have to do their part, but it is not the central problem. >> all the way in the back. >> thank you. i am with the committee of 10,000. we are watching the development of the high-risk pool.

because we cannot be very faithful about the exchange's right now, and although the high-risk pools require no coverage and no person in heels. there's do that, -- in hemophilia bears to do that, what is the federal response? >> the federal response is that we are working on that, and throwing that out and are prepared to -- and rolling that out, and are prepared to fill the gaps. we are going to do our job. we are prepared to do that, and we will do it well. >> yes. over here, the blond-haired gentleman. >> thank you.

[unintelligible] >> we worked mainly with corporations on employee benefit questions. between now and the exchanges, when they are up and running, there will be subsidies available for lower-income workers. in the meantime, many workers benefit from policies with annual limits, like time limits -- lifetime limits. those are taken away with the authority to the secretary to make exceptions in certain circumstances, waivers for certain annual limits. the question for steve larsen, did you have any guidance for us as to how the secretary might exercise that discretion? >> i am not like to talk about specific guidance, but if you have any suggestions on that, i would be happy to take them. >> very good.

>> the issue is exactly for hemophiliacs is exactly why we are better them. >> my name is warren greenberg, george washington university, formerly with the ftc. do we not see a contradiction here? on one hand we have the department of justice, the spokesperson for the department of justice, saying that the competitive authorities are supposed to effectuate competition, try to instill more competition in the marketplace. on the other part -- on the other hand, we have the department of hhs saying it sure what to look out for premium increases. if we have effective competition, while we're looking out for cost increases, premium increases? i thought competition was

supposed to take care of that? >> i can start on that, if you want. the assistant attorney general spoke yesterday about exemptions. one of the issues that she explored was the way which it can work with regulators. i thing that is what you're saying. you're saying a melding. i do not think this is unusual in any way. i think it is working hand-in hand, knowing there is regulation going on, and knowing that we will work with them on that. >> i do not think he two are mutually exclusive. i heard it when i was a regular, that competition is the best regulator. i think even when there are circumstances of full competition, i do not happen to think that is true. i think it can be effective in

certain areas, but i do not think it is an answer in all cases to issues that consumers might be at risk at. the other thing i would say is i think the idea of wanting to foster insurance competition that does not mean that there is as we sit here today. the individual market is a perfect example. you might have, in a particular state, 10 or 20 licensed carriers to sell individual products. of the 20, there may be 17 that have less than 1% of the market share, and are highly concentrated. is that competition or not? if you look of a number of participants, you could say that this competition, but it really is not competition. there are really only two --

two or three, or sometimes oneone. in any case, we do not have a lot of good competition. i think that is why the exchanges will hopefully really helpless. -- help us. >> i am with the national writers union. our members are mostly freelancers. they do not have employers, but they are not poor enough for medicaid. most states will not sell our members individual insurance policies. there was a time many years ago where we had a contract with the national cancer, -- national insurer, and that company went bankrupt. we ought not found 1 cents were evicted by individual policies. there are some states, but not

most states. and individual freelancer can buy an insurance policy in new york, but not in pennsylvania, or the washington, d.c., virginia, maryland area. will this change? >> you go first. i have spoken to you? . -- i have spoken to you guys. you can buy it individually, and after 2014, there would be no need to buy it collectively because you would go into the large pool of exchange, no discrimination. there would be just straight up purchasing through the exchange, which would be a bigger pool then you could ever have as your own. that is the concept. [unintelligible] >> the directly through the exchange. i would be happy to talk to you

offline about that. we met with you guys. >> one more question. >> yes, this gentleman over here with the yellow tie. >> i am with the center for regulatory effectiveness. i have a question for steve larsen. we applaud your transparency actions, but there's a of -- but there appears to be a couple of actions you have taken that are inconsistent with your idea of transparency, and that is most certainly issuing a number of rules which made it impossible for the public to participate in the roll-making process. i realize there might be conditions that warned that, so my question is two-fold. with respect to the premium increase rules, will they be issued as an nprm, and will they

be subject to the executive order which means that they will not be able to review them before they got rid >> all of them are going through the -- did get out. all of them are going through the omb review. i am not sure i'm ready to comment on what the process will be for issuing them. you mentioned the time frames. we agree with them. a door to get the regulations out, the necessary -- in order to get the regulations out, the necessary issuance has been made clear that some of them might be subject to read visitation. we're happy to get in the comments. >> time for one more question.

is no one from the press that has not had a chance to ask a question? ok. can i have the gentleman in the far corner? >> david, from the afl-cio. we are concerned that the disclosure form does not do, or does it poor job of reducing the opacity that you have been speaking about. similar concerns have been consigned -- have been raised about the delineation for the purposes of the calculation. how much are they willing to challenge the recommendations? >> as we pointed out, several times during the course of this, and certainly, i am committed to this, as his secretary and the president, i think we view the

partnership -- we do the process with the states as a partnership. on the rate review, i think the statute provides that the secretary establishes the standard in consultation with the states, which is different than defining it and then certified. i have reviewed, and we are concerned with the level of disclosure in those forms. we are working with the naic subcommittees. i'm interested in an additional disclosure. i think they have done an extremely good start. in plowing new ground, it takes a little bit of back-and-forth in order to get it right. we are in the middle of that process. we are pleased with the work that the naic is doing.

they have a conference call on something two times a day. we're going to continue to work with them on that issue. some of the points that have been raised are very good, and i am not sure that the naic disagrees. joel ario, do you have anything to add? >> we welcome a continued discussion. i think it is correct that it is a federal law. ultimately, however you said, but they have the final say. >> thank you for being a good audience. we have a paper released today which discusses how competition and consumer protection

enforcers can better work with the new federal regulators. we have a paper coming out in just a couple of weeks that will deal with a lack of adequate state regulation. but thank you to everyone on the panel for today's excellent presentations. [applause] [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> let me say to the american people, this is a change in personnel, but not a change in policy. general petraeus fully participated in our review last fall. he supported and helped design the strategy we have in place. >> learn more about the president proposed choice to head u.s. forces in afghanistan. general david petraeus has been on c-span more than 40 times.

watches appearances on line, any time, at the c-span and video library. it is washington, your way. >> the supreme court confirmation hearings of the elena kagan are set to begin next monday. we are the only network bring you in -- bringing you on and drop the coverage. that is live monday on c-span3, c-span radio, and c-span.org. joini us here is quin hillyer. senior editorial write wear the washington times. we're talking about elana kagan confirmation hearings beginning on monday. in fact the washingtonimes has a two thirds after page editorial this morning. the case against kagan. mr. hillyer, it seems, before we get into the specifics, it seems that not a lot of people have paid attention to this supreme court nominees. that affair statement?

>> i think that's fair with the oil spill in the gulf and everything going on in afghanistan. this just hasn't made it to the top of the news. next week, it will. the hearings start. host: case against kagan. this is what the washington times and i presume you wrote this one. this is what quin hillyer and the washington times wre. kagan is too political, too leftist and too experienced and too disrespectful towards existing law to beconfirmd for the u.s. supreme court. let's take that one-by-one. too political? guest: too political. the memos from both her time with chief justice marshall, and he time at the clinton white house show that she consistently is results oriented where she tries to figure out what political results she wants to

get and then tries to twist the law to get there. rather than starting with the law and saying, okay, what ds the law tell me to do. her legal analysis is not actually really legal but political analysis. she shows that again and again. host: too leftist? guest: you go down a whole list of issues, and her legal analysis doesn't just work toward political ends, but towards leftist political ends. she showed that she actually with held information from president clinton from the american college of gynecologists and obstetricians and that showed the partial birth abortion was not necessary almost any time. she was so dedicated to pushing partial birth abortion she with held information from the

president. she's very leftist on gun control where she's has said she doesn't this is an indivual right and i could go down another whole list of issue. but issue after issue, not just on the liberal side but on the far left. host: too inexperienced? you write? guest: there's not been another justice on the supreme court for 40 years that has never served in any spot before as a judge. now, that doesn't mean you have to have been a judge at some level, but if you haven't, it mean use should have other some significant courtroom experience. until she by came solicit general she had never argueed a single case in a courtroom at the appellate level. that's an extremely thin resume for someone to be in the highest court in the land. host: too disrespectful towards existing law?

guest: i could come up with plenty of examples but the most well-known is when she was dean of harvard law school and tried to keep military recruiters off haard campus and she later knowledged she knew the law applied, but she was going to ignore it unless the pentagon enforced it on her. en she turned around and supported a challenge to the law and that was ridiculous the entire supreme court in a unanimous 8-0 ruling with one person sustaining ruled against her position. host: quin hillyer is our guest. here's their editorial. numbers are on the screen. (202) 737-0001 for publicans.

democracy employ democr (202) 737-0002 for democrats. the kay dpan hearing convened on monday and will be live on c-span. now, recent c-span pole, can you identify the individual named by president obama to serve on the u.s. supreme court. only 19 percent said yes. 81 percent said no. in 09, last time. 42% named son you so to mayer. guest: yes again this has not gotten the attention it deserved. i'm glad you're talking about it this morning. this is one of the lifetime appointments in the land. mrs. kagan can serve on there for another 35 years. host: one other thing before we go to calls. we knowhis is what you writ we know she believes foreign law is highly relevant to u.s. law.

guest: yes, that's growing issue on the court. is whether or not it is appropriate for u.s. justices to site foreign law as being strucktive about how to interpret american law. now most americans would say, wait a minute. what does a law in zimbabwe or englan have to do with what we, of our own devices, have passed the united states? she is what is called, she calls it a trance nationalist. they believe that yes, indeed foreign law especially from international bodies like un should have an effect on how we interpret our own law. now, that is a huge departure only in the last 10 or 15 years and really only explicitly in the last five that's a human departure for only over 200

years of american tradion. host: on our republican line. oklahoma. please go ahead. caller: hi. mr. hillyer. yes. it is a blessing to get on c-span again, one more time. i have two questions for you. why is there a problem with this beautiful woman that graduated from harvard school. why is the question on gun control when i believe guns need to be regulated, and taken out of individual's homes. kids are killing one another. all over the world. - and why does she have to have so much of a background

pertaining to her college education and what she stands for? why does she have to be treated like sotomayer? e former appointed by president barack obama. host: start with gun control. sylvia thinks gun control is appropriate or gun recreation. you write in the editorial. we know she's hostile to gun rights. guest: yes, her memos and other comments show she does not believe the second amendment provides an individual right. i would assume a majority of americans think that just like every other right in the bill of rights this is an individual right. the right to actually own and

bear firearms and she has said, she is not sympathetic to that argument even though it's mostly the accepted argument among the american people. host: think she was going toward the nomination process and why she has to be quote, unquote grilled in front of the committee but will the republicans from what you've learned will the republicans on the judiciary committee go after her? work hard. guess guess i think they're going to ask a lot of tough questions. they're going to be respectful, unlike what happened with judges clarence thomas and works when they were really b put through th ringer. she is, by all accounts, a charming lady. she's somebody who get as long with people. and she, she does have a good

record at harvard law and they're going to respect her. but that doesn't mean they're going to let her off easily. they going to ask her t explain things in the editorial today. host: san antonio, texas. go ahead ryan. caller: i have a question. i want to know what are - what is like - what makes her qualified to be a supreme court justice? guest: what do you mean by that? caller: she has no bench. never been to bench. never bn a judge before. as like sotomayer has. what makes her qualified to be on the ben snch guest: do you thinkhe should not have been nominateed? caller: no. what experience does she have other than legal background? guess guess that's an issue we raise. she's not entirely unqualified.

having served as general solicitor of the united states even for one only year is something usually seen as a qualification. dean of harvard law school is nothing to sneeze at and clerking for supreme court is nothing to sneeze at. the question is, is that an enough? this is a courtroom job dealing with the very highest aspts of american law. and she has left courtroom experience that almost anybody else nominated in decades and decades so your question is, is very appropriate. most people would say that because of the harvard law stuff and because she did clerk for supreme court justice. she's on the borderline of being qualified. the question is, you know, is being just borderline enough. do you see this nomination being stopped or see her being

elevated to the supreme court or see it being stoped? guest: the numbers are with her. mainly because she's a democratic appointee and there's 60 democratic senators. i think the act of stopping her would be difficult. i don think it's impossible. the-us in should be on the moderate democrats to explain why somebody with this sort of record should be confirmed to the supremeourt and when the american public sees her record on partial birth a portion and her record on guns and her record on foreign law. i think the poles are going to be against her and the question is, will the senators follow the poles. or will the senators. do what they did with health care and ignore and go ahead and confirm her. ho host seems a lot of

conservative groups that would get active in a nomination bat or hearing have been quiet on this. is that fair? guest: a little it. there's been so much going on with the oil spi and such, but in the last few days they've started speak up. the national right to life organization spoke one the very detailed memo on her position on partial birth abortion. that's not ordinary partial abortion. it's the fairly grew some procedure that fairly most of the nation opposed. you'll have other groups speaking up i believe but they don't see it's a crusade this time. again, because she's done a good job through the years of being polite and being friendly, to everybody, even when she disagrees with them. part of it is personal. people tend to like her personally even if her record is of someone that's well to the

left as an activist. host: serve auzion senior editor for the washington times and senior spectator magazine. memphis, your on the ire. caller: just a couple of questions for you. number one that struck k me. that someone that writes for a conservative newspaper would state she should judge by the poles or congress should go by the poles instead of the law maybe before them or the bill where the supreme court or who sever in an official position should go by the poles. you said that, sir. another thing i'd like to bring up to you is that, on each side, no matter republican president or democratic president that nominates somebody for the highest cou in the land. there's going to be people that are apposed to it. you said earlier she was too

political in the clinton wte house of the that was her job. the job in the clinton white house was a political job. had to make decisions not only based on the law. politics also. i mean that's given. also, actually, was said that only 19 percent of the ammrican people are aware of who she is and who the president has nominated for the supreme court but i bet even less people are aware of other supreme cou justices that did a good job for %-nyears had no courtroom experience. could you please nam a couple of those supreme court justices that had absolutely no courtroom experience? guest: to take the last question, first. i don't know that there were many justices at all tt had no courtroom experience. now, way back in the 50's,

warren had been governor of california, but i think - i think he had significant courtroom experience before that as well. again, she is, kagan has never once until solicitor general had never argueed a case at the appellate level. to talk about your question on poles, i wasn't saying whether the polls should or should not influence i was talking about where they would or would not influence the senators. senators tend to follow the polls that a political reality. the question was would she get confirmed and i was explaining the political situation. it was an, is. host: served as press secretary for bob livingston that presented the north new orleans area. this next call comes from

william in new orleans. caller: good morning. very interesting to me that there's been a great deal of l talk about diversity in the nomination to the supreme court and yet when one looks at mrs. kay fwan. so list or the i think it's very interesting that we find the this kind of feminism in the courtroom but wheres the diversity. there's the ivy league background. deep within the tentacle office supreme court as a clerk. father was a very high powered lawyer. when you look at this. one is really hard pressed to look at the supreme court and talk about diversity. i don't think feminization or simply the placing of two on women on the supreme court counts as diversity or diversity

of life experiences. they all seem to come from the same general ar. guest: the caller makes a very good point. peter, he - he's absolutely right. if she gets on the court, all nine justices will have gone to harvvrd or yale law school. four of them will have been from the new york area. the even the religious diversity that shouldn't matter. where there's diversity or not. you will have six catholics and three jews but no protestants and two from manhattan. you would have everybody coming from the same, everybody but i

believe one from the same northeastern corridor. you have clarence thomas and anthony ennedy from out west of the that's not very diverse at all. to me, diversity doesn't matter as much as qualifications and experience and adjustment. but the left always argues that diversity is important and yet, clearly, she does not me it more diverse. if they want diversity she is not it. and as a matter of fact she hosted a forum at harvard and i watched the video the other day, and they mentioned her. this was about two years ago and they mentioned her as a possible supreme court justice and she even laughed and said i bring the same life experience of the common man and she was laughing because she was making joke on herself because cheerily she doesn't. she's from the east coast can

lon. >> from your editorial times article she's willing t cut first amendment free speech for political purposes. guest: this is crucially important. it's really remarkable when you look at her whole history on first amendment free speech rights. there's only two issues on which she has let herself sort of get out front. one is on how much rights and free speech. sh argued before the supreme court that, just last year, that the first amendments does not protect the right to publish political pam lets in certain circumstances. she was specifically asked, would this law properly ban books and she said, i don't know that the court would uphold that

and she said, probably. and that's astonishing when you consider that two pamphlets were, were the very heart of our founding. thomas painee common sense and the federalist papers and she would say that congress could ban them under certain circumances. she s had said in this. the circumstances would be in if they were funded by a corporation. and there's certain other subsets of corporations but basically, she was saying corporations cannot publish political pamphlets within certain timeframes, et cetera, et cetera. now tell that again, to the people that did the federalist papers were anonymous at the time. they wrote under the different name and the issue in this case

was whether the could be anonymous corporations - charitable corporations that don't reveal donors. well, the right to free speech but anonymous speech is central to the history of the united states. she is actually talked about redistributing expression and about the government. these are her words. redisindustry butting expression. talked about the government doling out free speech rights. not that the rights pre exist government but government doles them out. that's dangerous stuff. >> glendale, wisconsin. bob you're on with quin hillyer of the washington times. caller: yes, good morning. first of all. god bless you both, okay. the first question that i wanted to bri up is why did obama

nominate this person? and who else should be nominated? and i've been listening this entire period here. within the first 25 minutes the first time that m hillyer you mentioned anything about the christian and a portion issue, okay that's very - commemorative there. and then the other thing that i thought, well, while i was sitting here, our forefaer's had no experience in anything either. okay? i think they were justified and today it's what our fundamental values that count and that is what has brought us to the present day and mrs. kay fan is a beautiful person, yes, i agree. but the fundamental principals are missing there. i would like you to comment obstacle that.

guess gues ge gu guest: there are people that are left of center that i don't think would get more than two or three votes against them in the entire senate. walter dillinger was a former solitor general i think. merrill garland othe circuit of appeals. those are two names that spring to mind clearly left of center, but who would engender almost no opposition. the second question, peter, was it about - host: founding father's experience. it was kind of counter intuitive to the argument he was making. seems he was saying they had no experience but the beauties of our system. guest: actually most of them had plenty of experience in the

law or in public affairs, most of the founding father's or the people of the institutional convention were among the leading citizens of their time. most had tremendous educational background. they were very learned men and very accomplished men. of course, they had no experience in american law as america because america hadn't been created yet but they were some of - thomas jefferson was a broad at the time and when he heard who was going to the convention, he wrote back, this sounds like an assembly of demigods. direct quote. they were plenty experienced. lost host from shreveport, louisiana. dwayne? republican line? caller: i don't think she ought to be nominated with a xhaunist president wanting to put her on the bench.

we have the constitution being attacked and as far as i'm concerned she ought not be nominate all i got to say. host: losing our rights left and right? you agree with that? guest: i think it might be slightly overstated but it's easy to argue, and perhaps accurate to argue that rights are being eroded and chiped a way at. when you have a president who is setting salaries for private corporations chief's, that's something that's never been done before. when you have an administration that's unilaterally changing the terms of debt, so that for instance, the bonded stake-holders, suddenly get the value of their holdings cut from

about 5.25% to 20% and the unions go from 25 to 40% with a stroke of a pen without congress passing a law, that erodes operty rights so the man has a point. the question is, how far can this go before the american people say, you know, emergencies are one thing but we do he laws. >> from the washington times editorial we know she believes judges should automatically favor certain classes of peoe and impose their own desires for outcomes. . . .

guest: you will show no favor toward anyone. everyone, rich or poor,, comes to you the same. she would say that certain groups, the extra cost. that is not the american tradition. host: the next call comes from chicago. democrat blind. caller: -- democrats lined. caught -- caller: i listen to this person, and this is an extreme right wing. the most extreme decision made by the right wing, corporate

supreme court was picking our president in 2000. the next extreme decision made by the extreme, all right wing court was the corporate decision. corporations are people. they can buy politicians. they can buy our elections. i mean, they can buy anything they want, and elena kagan is not my choice. i am a liberal. i would rather have diane wood. she is qualified, but she is to the right of sonia sotomayor. i would have rather have a liberal justice to counteract the extreme members of the federalist society they're sitting on this court now. if you that are sitting on this court now. guest: a lot of people believe that. that is a consistent, a liberal

view that our caller just articulated. we have a difference of opinion it -- opinion. i would strongly dispute that i'm anywhere near extreme, right wing, if you saw my history of fighting against david duke and all whole litany of other things. i am hardly where it went. host: confirmation hearing will begin at 1230 eastern time. elena kagan will be introduced. it will be. on one of our many c-span networks and on radio, and on radio and the internet. i don't thi the house is in that day. i'm not sure. but it will be carried all over c-span. so you can't miss it. chandler, arizona. thanks for holding. go ahead, mo. caller: i've been reading in

certain magazines that she's gay. is that what -- understanding is? host: mo, where have you seen that? caller: i forget the magazine but it was body language, there were photographs, the way she was sitting. host: is that important to you? caller: no just asking. host: ok. thanks. guest: i don't know. and i don't think it's any of our business. it's only our business if it directly influences how she rules. if she puts that ahead of the law. but other than that, i don't think it's our business to ask. and i would rather not go there, although it is worth noting the administration has said categorically that she is not. host: helen on our independent line. you're on with quinn hillyer of the washington times.

caller: good morning. thank you for taking my call. i have one comment and one question. christianty played a pivotal role in shaping our -- i feel by electing her there's many fundamentals missing and sense we are not living in socialist, and communist nations, how would the tnsnational law apply to us? i would not support that. and then the other question i have is by having no protstants, i feel that it lax diversity. guest: ok. on thsecond question first, i up to on this ahead of time. i don't think somebody's faith or somebody's regionnal background should make a difference. but if you are going to yell and scream for decades that diversity is important, then

when it comes time to appoint somebody, then you should actually achieve diversity, and clearly she doesn't. but there's noeason why a jew or buddhist or anybody else should not be able to follow the law the same way a protestant or catholic should. it's not about faith. it's about law. that said, the question about transnationalism is very, very important. just last month the court, again, came up with one of these rempses to foreign law that really disturbed a lot of us who think that foreign law has no place in american courts. unless it's specifically having to do with a law pursuant to a treaty. the question was whether a minor, whether somebody under 18 could be given a life

sentence without parole. and even though i think it's 37 u.s. states say they should be if the crime is heinous enough. we're talking about brutal rapists and murderers that happen to be two weeks before their 18th birthday, the court said no. one of the reasons is world opinion is against it. and i think only one other country imposes such a sentence. maybe two or three others allow such a sentence. so to which a lot of legal scolers here say, so what? our american citizens voted on our system of government. the people of zimbabwe or china or london do not vote on our laws. so why should we pay any attention to them when discerning the right judgment

under american law in cases that are specifically american? >> tweeting in, kagan argued governmental motive is the most important factor. she's just another liberal who lovesig oppressive got to the. caller, anne? caller: first of all, mr. hillyer i want to thank you for the washington times. i read it online and i really, really enjoy it. read it err monday through friday. most of my information has come from your editorials. and there are so many things, in fact,, that she has not been a real judge. and her eliteness manifests itself. partial birth abortion really gets to me, just to my heart. i was an r.n. when i was working. i'm retired now. i cannot imagine any nurse or doctor doing this.

so there's so many things. but again, i thank you. and for ing there. bye-bye. guest: thank you, very much. host: what's the status of the washington times currently as far as ownership and everything? guest: i really don't know. we're told everything looks good. and i just go in and do my job and let the business side handle the business side. host: still owned by the same owners? has there been a sale? guest: no. there has not been a sale. host: barbara? caller: thank you for allowing me to speak. we now have the most far right court we have ever had. four of these justices, robert, legal, thomas and ask alya are classified as the most far right we've ever had.

kennedy's number 10. as far as foreign law is concerned, kennedy is one of the ones who most often sites foreign law. host: ok. barbra, where did you get that listing? caller: i don't remember. i pulled it up some time ago. the ones that we have on there who are liberals aren't the most liberal. guest: there's severalays to respond to that. first of all, theeamerican people don't think that. several recent polls have said do you think the court is too liberal or about right or conservative? and the plurality says too liberal. secondly, there have been really thoughtful commentators who have just recently analyzed this. stuart taylor who is as down the middle as it gets wrote a column and said no, this is not an extremely conservative

court. that on legal issue after legal issue, it is moderate to at times leaning slightly left. bause kennedy on some very important issues, the swing justice kennedy actually tends to come down on the liberal side. so i'll go with stuart taylor's analysis, and again, stuart taylor is a centrist. a respected centrist. and he did a big study on it. so i would just stick with him. host: steve, you're the last call. go ahead. caller: hey, mr. hillyer, i'm curious as an editor of the "washington times" what's the dynamics as far as the marching orders you get from the mooney cult? we all know that well, i think a lot of us know that the "times" is owned bythis cult.

host: ok. we got the point. mr. hillier? guest: i have never once gotten a maring order fromnybody in ownership. they are remote owners. they do not come in and mess with the newsroom. that idea has been exploded even by most of the accomplish ment media after the first six or seven years of our existence. most of the establishment media started recognizing that, yes, the ownership might be different. but this is a very serious, solid newsroom. >> quinn >> another local look at the --

c-span is the only network bringing it uninterrupted coverage, live, monday, beginning at 12:30 p.m. eastern on c-span3, c-span3 deal, and at c-span.org. >> this is the grand by you region. we have lived in this region forever. we have seen the changes that

have come into the environment. some of it natural, but the majority of it has been human induced. we have managed to adapt and adjust our wayyof living in order to remain here. we are facing a situation right now, with the gulf disaster, with the oil, and dispersant's use -- dispersant used, we are facing the unknown. we have no idea how this will impact our community, the length of time, how will impact the meeting like that we're dependent on -- the marine life that we are dependent on for are food source and for our revenue. you're looking and watching and waiting for what comes up -- we are looking and watching and waiting for what comes up the by

you. >> what happened here during katrina? >> the village was impacted like many other places. the community was devastated. we are still in recovery right now. we have only managed to get five homes rebuilt. three bombs have been renovated. we have three more -- three homes have been renovated. we have three more in the works. people want to come home. there have been many problems in the recovery and the return effort that we and the making. and now, with the lack of resource -- lack of funding coming into the village, because we cannot go out on the water and it cannot earn money to put that into the community, this will be a problem to the return effort that we've been making to have people come back, and reclaim their lives. katrina was a natural disaster.

we knew how to deal with that, some way, even though it was devastating. it was kind of the norm. storms have always come into the coast. we have been here. we are part of it. loss and recovery -- we are used to that. more or less, we can repair -- prepare for it, recover, and we can feed ourselves in the aftermath. this disaster with the gulf, we cannot do that. our livelihood is threatened to the very point where we cannot even eat our food. our food source is poisoned. we have no idea what to do. >> how many homes were destroyed in katrina? >> all of them, really. we have only managed to have three renovated in place.

it is very hot out here today, i have to tell you. we have three homes renovated in place. everything else has been new builds. everything else coming up will be new builds. all of the homes were compromised beyond the 50% mark as far as destruction. they were not -- it was not possible to renovate those homes. it had to be taken out and something else put into its place. good and bad -- it is lessening the time of recovery, but now the homes are elevated to mitigate floods loss and the structures are really sound -- a lot more than what was there before. they had been impacted from previous storms. the ones that we have now -- they are new, the construction is top notch, and we're out of

the floodwaters. >> [inaudible] >> we had approximately 23 families here. we have nine families here now with three more planning to return. they're waiting for their homes to be completed in the coming year. less than half. this place was very hard hit. the area where the eye wall of katrina made landfall. the the surrounding areas were just a hop, skip, and jump away. this area was just devastated. we took a hard hit. the people are resilient. we are fighters. we're not people who just give up and roll over and say, and i am done. our continued presence here is a testimony to that. but we live in this natural world. we are part of this natural world. how many kids can this environment take before it is no

longer able to recover? being a part of this natural world and part of this environment -- if this environment dies and suppers, then what is in and dyes and suffers. we are part of that suffering. we see our own demise and what is happening to the natural world around us. something needs to happen to change all of this. you know, we can no longer look and natured and see what we can take from it -- look at nature and see what we can take from it without minimizing our impact. we have taken away from it. we need these natural places. this is life. people look at the marshlands and the sea grass. we know, living here, that these habitats,y's, rookeries -- a lot of marine

life, mammals, birds come into this region. these marsh grasses mean life to the fisheries. you cannot just say, it is only going to impact grass. it is impacting the entire ecosystem, of which people are just one component. we need to see to it that we learn lessons from this. this has happened in other places before. this golf disaster. it is sad to say that, you know, today, it is business as usual. look at what happened here. when will it not be enough? when will we stop and say, let's learn from this. let's put in the work. let's put in the safeguards. we need to the under -- we need to diversify. we cannot allow ourselves to be hostage to one source of energy. oil is included in that, but we

should not look only to oil. >what is happening in the gulf right now is a testament. >> [inaudible] >> every day. some people come to get away from it all. >> tell us about the gulf restoration effort and what you are doing here. >> we're a nonprofit environmental advocacy organization. we have been around to run number of and our mental crises that the gulf of mexico has been exposed to. five years ago, we saw hurricane katrina come through, which we thought was quite possibly the worst environmental disaster. i think we are seeing its match, unfortunately. we're the only environmental advocacy organization that exclusively focuses on the gulf of mexico. we have board members in all

sizable states. we have staff and florida, texas, and louisiana. we have been in the bentley monitoring the crisis -- the cleanup and containment -- and working to see in more effective response to help protect the natural resources of the gulf of mexico. one thing to keep in mind as we are coming out here, as we go through the wetlands, we're going to see a lot of pipeline canals, things that have been done to this coastal ecosystem that really benefited the nation. this pipeline did not necessarily make new orleans rich. they made the nation rich pretty oil and gas in that the piercing now from bp -- it is incredibly significant. it is one piece of a larger crisis. louisiana loses 25 miles of coastal wetlands each year. that is unrivaled. since 1930, we lost about 2000 square miles of louisiana marsh that just turned to open water.

half of that reason is because of the oil and gas activity that has been happening in the marsh. they dredged tens of thousands of miles of canals through those systems. you allow so order to gain entry into brackish or freshwater ecosystems. -- allow saltwater to gain entry into brackish or freshwater ecosystems. it can create as small levy system. when a storm comes in with a surge, or there is a really high tide and the wind combined, it does not leave the marshes as quickly as it would otherwise. it stays there. that salt water will kill the plants and dissolve the land. much of this march is plant matter. it is a crisis. this is something that should have been addressed when the oil companies were started on

exploring this area. it is ongoing. we need to see action. unfortunately, the obama administration is getting hammered for their perceived mishandling of this crisis. i will not defend how the resources are being deployed, but i will say that they have been very engaged in the coastal wetlands crisis for quite awhile. in march, the unveil a road map for restoration that actually laid out a vision and a plan. the way to create a sustainable coast is by putting the river and the sediment back into these ecosystems. when we build the levee, we basically do not the coast. in the past 4000 years, all of the land south the baton rouge was built by the flood plain of the mississippi river. it put fresh water and sediment into the system.

there is no bed rock around south louisiana. it is all sinking sediment. it would be combated by the river. when we hemmed in the river with the levees and the jet the system to make sure de rigueur was constantly deep enough -- make sure the river was constantly deep enough to provide shipping for the nation -- when the oil companies came in, we need to fix it. we need to put the river back into the system. we can do sediment piping into a the dredging into pipelines to directly rebuild the sinking wetlands. it is not cheap, nor easy, but a fast and be done. the nation benefits from what comes from down here. the bill is coming due. >> how did you get involved? >> i have been an environmental organizer for about 15 years.

i have worked in d.c. and new orleans. i work to see a better impairment of future for the region. -- a better environmental future for the region. onwe're in grand bayou and our way out to barataria bay. we will look at the oil. >> oil sheen? the heavier packages that you can see there. we have a problem with erosion. this is compounding the problem. the entire coastline is covered in oil, as far as you can look. but we have boom. ok, i hope you got the sarcasm in that.

i mean, how effective was this response? how effective was that? you make the call. i look at that and it makes me sick, because i know what this means. there is more to come, because it is still going on. they have not stopped the flow. all of this time, it has been flowing, and it was allowed to reach year. there is more to come. this is the response. how can we plan the next step when this continues? >> we are right on the coast. >> [inaudible]

we have several acres. >> what would this normally look like? feminize and green -- >> nice and green. i have seen a lot of oil on the ground. it does not look good. it will kill all the oysters. the oysters and against the bay. it there is no way they will survive this. -- there is no way they will survive this. it is devastating. the oil is saturating the marsh. it is on the seafloor.

>> yet taken a picture of an oyster that is dying. -- you have taken a picture of an oyster that is dying. it is a way of life for my husband and a lot of fishermen. you're looking at death. no more fishing. no more trapping. no more oysters. it is death. >> what does your husband do? >> he is a commercial fisherman. >> is this your shrimp boat? could you tell me about the boats? >> i had one before this. i sold it to get me of fiberglass and one that requires less maintenance.

-- of fiberglass one that requires less maintenance. >> what does that do to your business? >> i look forward every year to the season opening. we schrempp all year round. i'm like a kid with the new toy. i cannot see myself not doing it. it is just wonderful to go up there and compete with others. it is just enjoyment. it is something you do it every year. >> is the money pretty good when you are getting a lot? >> id is pretty good. the price of fuel right now is not -- it is pretty good. the price of the shrimp just went up.

it makes it a little bit better than what it has been. you can make a decent living doing it. >> when did you have to stop shrimping? >> we stopped about two or three weeks ago. nwe did not know if the season was over or not. the area at the venice which we go to -- they have also been told. guest: >> how did -- >> who tells you to stop? >> they come out on the news and show you the area. >> have you gotten any help from bp? >> i got one check already. i should be getting one more in the mail. bamut is that helping a lot? >> a little bit, not a whole

bunch. the way we was working with the shrimping, we was doing way better than waiting on $5,000 a month. we normally would make that in a day or a couple of days, you know. it is way down right now. >> what would you expect the federal government to do to help? >> i would expect them to pick up where bp is not -- i mean, they can do better than what they have been. i expect the federal government to pick it up. >> his way of life -- that he has now -- ever since he was little and grew up -- it is gone. what is he going to do next? he cannot take -- you know, he cannot continue to do this.

he has to have income at some point. r.o.c. want to provide? you know, when there is nothing -- everything that he has and has worked for all his life to gain, you know, is all jeopardized. now -- we was in the middle of raising our hands on -- are grandson to learn how to do these things and get familiar with the water and the boats -- and now you may as well throw a fishing rod with no book on it. the fish that he will catch in his future will be contaminated or nonexistent. his generation -- him and his cousins -- they're not going to be able to enjoy the waters as we did.

>> my name is raymond. >> and you said you were a tug boat driver? >> yes. that was about 47 years. now we go and get oil. i still work on the boat, you know. about four miles out. >> you live here? mees. i live right across the bayou -- >> and yes -- >> yes. i live right across he bayou. that is my brothers and sisters -- member cousins. the whole village is related.

>> how has this oil spill affected your community? >> we were commissioner -- commercial fisherman. all of that is done. there is no way to make money. it is really bad. >> how quickly after the accident did you see oil? >> it to about a week to get here. you could imagine what it is like down on the bottom and in the grass. i use a lot of bond soap -- donohawn soap. >> is it one year, five years, 10 years, 20 years? nobody has the answer. we have agencies and we have all of these scientists. they are looking at this according to what they're saying, every day monitoring

conditions. we ask, how long. they always say they do not know. >> can you tell me about the scene of two weeks ago? >> we wanted to check out the oyster beds. my nephew had been out here the day before. i just wanted to see what it looked like in the oyster bed. when i came out here, it was covvred. miles and miles of oil. i picked up a pelican that was covered up an oil. i went in to land and called my brother. that evening, i came back and had about 30 folks skimming, picking up a while. they got right on it. >> was their boom out before?

>> no, they put it out the next day. >> when you called the parish president, did he know that it was out there? >> he called them. >> you called him. he did not know yet? >> no. >> this entire region is imperiled and we do not know. do we plan to hold tight for five years and then see some type of relief? the we have to hang on for 10 years? what kind of planning do we do? worst-case scenario. what is the worst-case scenario? the two decades of our lives and our livelihood may be imperiled by what is going on right now. that is the worst-case scenario. how do we maintain our life. -- how do we maintain our life until that time? where does that come from? we have no idea.

this is karen and maurice's home. my home is right next to it. [inaudible] >> this week, bp hired james lee witt as a consultant. he served as the head of the mud in the clinton administration. here is the hour-long event. >> i am pleased to be part of this very important exhibit. i would like to thank the foundation staff and a library for the work they have done. i also want to thank leona for the support is given the over the years. we're working and our 49th wedding anniversary. -- on our 49th wedding

anniversary. [applause] i told the store one time and she told me never to tell it again, but i am going to tell [laughter] i-- i'm going to tell it. she asked about the longevity of my marriage? on our honeymoon, we took a and will ride down the -- a mule ride down the grand canyon. the mule stumbled, she said, that is once. the second time, she said that is twice. the last time she said, that is once. [laughter] this little lady came up after the speech and said, did you really shoot that mule? i want to thank senator pryor, because i will never forget, when i was the director in

arkansas and we had a flood -- we had some house trailers on the inside of the levee between the river and the loving -- levy and fema was denying assistance. they had me come to washington and had the month there. it was a good cop, bad cop routine -- add that the main -- and they have a fema there. it was a good cop, bad cop routine. senator david pryor chaired my hearing. two other senators introduced bain. the introduction and the stories lasted so long that the hearing -- my part lasted just 15 minutes. that was pretty good. i really enjoyed that hearing. during the eight years that a was director of fema, i cannot

tell you how supportive clinton was. if it affects people and it is in the news, he said, i want to know about it. in arkansas, we given situation reports every morning. when i became the director offema -- of fema, i said that the regions where they would collect information and we would have it in his pile at 7:30 in the morning. we were at a cabinet meeting. this was before we -- before i was elevated to cabinet level. i was one of the staff people that sad against the wall. at the end of the meeting, he said, you know, why do not all of you send information into james lee witt, because he sends me a report every morning. he will collect it and send it into me. after the meeting as a, are you trying to get me killed? [laughter]

he said, the reason i did that -- we had a lot of fun. we saw a lot of devastation during that eight years that we responded to 360 federal disasters. everything for earthquakes to wildfires the hurricanes to tornadoes -- things that were just unbelievable when you saw them. the devastation and the pain and anguish that people were going through. it started in 1993 with the flood on the mississippi river, affecting nine states, and the devastation was just unreal. president clinton and i were talking about it. governor carnahan, missouri, and i said, mr. president, we cannot let people go back into those areas. do you know that he supported -- the senator supported with that

money -- we were able to buy out and relocate people out of a floodplain so that they would never be flooded again. in missouri alone, we bought out over 4000 properties. in missouri, a little town, 18 businesses, 107 residents. when the governor and i went there, how the bamir proudly to bust into city hall and showed us the high water marks with the dates. they kept moving their shelves up to protect the city records. we relocated that entire town, except one small business -- and the mayor's business of a small engine repair shop. we built a new school with seismic resistance. it was also tornado-resistant. it was domed with natural

lighting coming into it. in iowa, we bought out i did not know how many residents along the river. what was unique about it was that all the property we bought out -- we put the restrictions on it where no one could ever build there. it could be used for soccer, baseball, recreational purposes, but no buildings. in iowa, they worked with the iowa game and fish department to plant that area back into the natural flowers, natural grass. in just a couple of years, the ecosystem all came back into the area around there. so, we knew then that mitigation and prevention was going to be a huge part of everything we did. not only in disasters, but before disasters. it works extremely well. i will never forget the gao

asking us to a cost-benefit analysis on by all relocation and prevention. -- on by out -- on buyout relocation and prevention. every dollar spent saved $3 too $5 on future losses. it saved people pain and anguish. i'm extremely proud of what president clinton supported and that we could do for the american people in those communities. in 1994, we have the northridge earthquake. in los angeles and pasadena, simi valley, all throughout theire. people were scared to go back into homes. leona came out and volunteered

her time. cnn was always after her to do an interview and she would hide from them. [laughter] it was unbelievable. the first lady, hillary clinton, came out today to agree to this one community that had all historical homes on it. -- came out and we took her to this one community that had all the store opens on it. it was a rolling earthquake. we came down one block. there was one house sitting on another block with no damage. there were still living in their house. the guy came out and mrs. clinton asked him, you have no damage. what did you do? he said, i went down to the library and i checked out a

videotape from fema, and it showed how to retrofit the house for an earthquake. i did it myself. i spent $1,000. the biggest problem we have in this country, particularly for earthquakes and countries, is the fact is we have inherited a traditional stock of buildings that were built before there were building codes and standards, and before they were never enforced. now, it is really critical that we start retrofitting those facilities, particularly hospitals, schools, public buildings, showing people what they can do for themselves in their homes and businesses to protect them. -- to protect them from devastation. president clinton authorized us to go to congress, to support a

program that i wanted to start called project impact. i had this idea, while i was at school, that we might be able to do more in prevention if we created this public-private partneeship concept in the community. we came up with the name project impact. i take it to president clinton. he approved it. when the congress and got a little bit of money. we started with seven pilots communities. deerfield beach florida -- deerfield beach, florida, seattle, washington. it became so popular that we went back to congress and gave us $25 million. it was the first time in the history of the federal government that any federal agency had created a public- private partnership with businesses, corporations,

foundations, to support a local community and minimize the risks. it was really interesting. at the last project impact summit, we had 2500 participants. we had legislators, mayors, council, city council members, individuals, businesses, even nascar as a partner, passing out 62 million pamphlets on prevention. they painted the car at the daytona -- the first daytona in the project's impact colors. he was our spokesman. he got killed in that car wreck in new hampshire. they participated in that summit. they brought their racing teams up there. they brought simulator's up

there. several of the top nascar drivers were up there. it was the fastest-growing public that private partnership prevention program the federal government had ever done. we had to under 50 communities in the program. seattle, washington -- we had 250 communities in the program. seattle, washington -- in the third-year anniversary of seattle -- that night, they had a 7.0 earthquake. the next day, the mayor was on cnn. they said, mayor, you have very little damage. very few injuries. only one death. it was a heart attack. what did you do? he said, project impact. we retrofitted our schools, bridges, hospitals, public buildings. people took it on themselves.

low-income housing and volunteer organizations did all of this. that was the very day the bush administration cut the program. home depot and lowe's were partners in florida. they had one whole aisle in their stores and products that people could use themselves to retrofit their homes for hurricanes. they had training classes every saturday for these individuals to come in and to learn how to do it themselves. it was a very exciting program. a lot of communities are still doing it on their own. we just want to join. they did not want any money. they just wanted to join. they thought this concept was the bass -- the best scene -- the best thing since mom and

apple pie. brought people together. i was excited about that. we have to do more before things happen, to save lives and property. project impact was one way through public and private partnership we thought would work. and it did. hopefully, the wisdom of our administration and congress will put this program back in place. we would provide a little bit of seed money. don't forget west virginia. it was a small county. we went do it. -pwhen we got there, they had a really bad flooding problem. there were five ladies that had a sales, pied suppers, car washes, doing everything they

could do to raise money to help fix a problem in their county. these ladies were just amazing. they sold cookbooks to raise money and fix the flooding problem. what was interesting is that they went to the governor of a gulf of a little bit of money from of stuff about $300,000. they got a million dollars from the governor. they fixed the flooding problem in their county. it had been there for years and years. they did it for $750,000. our first project impact summit -- she won the citizens of the year award. turning was katy. -- her name was katie. she was 84 years old.

she stood up at that podium at night and looked across the audience. she pointed her finger and said, if i can do it, anyone can do it. all her buddies were in their 80's, but they were fired up, i promise you. we face a time in our country -- what they believe in global climate change or global warming -- the different events that are happening today and what is going on . the floods in france recently. the 20 people who lost their lives at a federal park in arkansas recently. the people that lost their lives in haiti. the people that lost their lives with the tsunami in indonesia and thailand and sri lanka.

we notice it all the time. we grew up doing this. right here at home, we have an earthquake zone. it ran the mississippi backwards for three days. it rang bells in the boston church. i will never forget, when i was director in arkansas, i said we need to pass some seismic bill into a decision -- in arkansas. we got the legislature to pass some seismic regulations for eastern arkansas. arkansasr in eastern

when the rebuilding bridges. i came back and said, we need seismic building codes for those new bridges. if those bridges collapsed, how will we get relief supplies to those people wwen something happens? i recommended to the highway commission to talk to california to get their building codes for the highways, bridges, and so forth. they did up and th -- they did that. during the northridge earthquake, fema spent $20 billion in that recovery effort in california. then, in 1995, at oklahoma city bombing. it was caused by an individual.

at the time we were there, we visited with families. we brought in 15 search and rescue teams. it was probably the hardest disaster that i ever had to deal with, because we brought out 168 victims. today, around federal buildings, they have mitigated the risk. we have barriers up. it could not happen. every event that we have, we learn lessons. we learn from our mistakes of the past and hopefully can prevent a lot of them for the future. when you think about, in part reads glaucoma who -- when you think about, in the arkansas, our schools, our hospitals,

communities -- the risks they face and earthquakes, tornadoes -- no hurricanes, hopefully. we lost 13 trees from hurricane katrina. there are certainly damages. we can minimize the risk. this exhibit, when you see it, when you walk around and look that this -- this is real. it lives were lost. lost.ple's lives were i will never forgets out the code appeared there was or tornado -- i will never forget south dakota. there was a tornado. there was no bank,-- no post office, just five houses left in the entire town. i walked around this area and there was an antique store. only thing left was the foundation around it. there were a couple of women there. i said, is this your store?

they said, no, this was our grandmothers. i said, well, is she okay? they said, she was in the store when the tornado hit. i said, and she is okay? visit, she had bruises and cuts, but she is ok. she heard the tornado coming. she opened the door. she had her cane. she said i will whip that tornado. [laughter] there are so many stories. we were in florida after hurricane and tournedos had come through. redound in a county with the sheriff. -- we were out in the county with the share of. i asked him about the damages. he said there was a 3-year-old boy who landed in that tree on a mattress alive.

when we came to georgia, we were flying across the path of it in the black hawk helicopter. the state director told me, see that pond? see that foundation? there was a house on that the foundation. it was gone. you see that just of rorer -- chest of drawers? he said, the father and mother could not find their baby. they looked everywhere, including in the pond. they opened the drawer and the baby was in it. we have heard amazing stories like this. one time we were in california.

i flew out with vice-president gore and senator feinstein. the water surrounded one town. they had volunteers coming from everywhere. we landed on this highway. we started walking up to the volunteers who were piling up sandbags on the levey. there was a big ditch. we were almost up there. one of the reporters came over and said, director, could you get a vice president down in that ditch and throw some sandbags for a photo op? i said, sir, they would like you to get down there and throw some sandbags. he said, ok. he said, i'm going to help you. t-bills doffed -- he bails off

ditch.he san the secret security guys were going crazy. he said, what was the matter with the secret service? i said, well, i just found out all those guys are convicts down in the ditch. [laughter] guyaid, that's why that asked me for a pardon. [laughter] it was so funny. there was a lot of times like that, that humor helped you get through some of those tough times. we had a lot of those moments. i cannot ever thank president clinton enough for what he did

for us and our family. i have to tell you a story. what last october, -- last october, he called me and asked me to meet him in new york. as a, what we need to do? we need toat do do? he said, i wanted to come to haiti with me. he did not realize how difficult it was to get to new york. i got there by 8:00. we flew to haiti. on the way down there i said, you know, mr. president, because you believed in me and gave me an opportunity, i'm still able to help a lot of people in my company and what we do. it is true. i think leona and i contributed

a whole $500 to his campaign. we did not have a whole lot of money. we went a heaping. -- to haiti. we got there and 9:00 at night. we had dinner at the palace with the president and the prime minister. we went to the hotel that you saw on the news -- the one that collapsed. we stay there for three days. -- stayed there for three days. the people of haiti make about $2 per day if you have a job. unemployment is 80%. last year, they got hit by four hurricanes. there were in bad shape before this earthquake, but they're now in terrible shape.3 meeting with the different women's groups, the parliament, a different ngos, volunteers. we went to a plant or they were taking in garbage and separating

the garbage -- where there were taking in the garbage and separating the garbage, the plastic, the paper. they would put the paper in this big -- has anybody ever turned butter? it was like in a big return. they had a big poll. they're putting water in it and pulverizing it. they would put it into a wheelbarrow. they would take it over and start it up in a wheelbarrow. they could put these in the cylinders and compress that paper and punch it out. they would cut it about this thick and make bricks for people to cook food on in their cooking pots, to try to keep them from cutting trees down and making charcoal. i saw all this plastic.

you know, mrr president, we could probably get that company from arkansas to put a washer down here, a shredder, bailer -- something to recycle this plastic in create jobs. he liked the idea so well that he announced it to everybody. [laughter] so, we are very, very close to having that put in place in haiti. it will create jobs. more importantly, we want to build a plant there that will take the recycled plastic and make building materials, so that haiti can become the recycling country for the whole caribbean. [applause] this is pretty exciting.

and then president clinton was -- he was very concerned about this year's hurricane season. this was before all of this stuff happened -- before the earthquake. he was really concerned about it. and said, you know what we could do? over in haiti, the women are the ones best with the family and take care of the kids. the men all run off when something is happening. there are the ones who get injured. -- they are the ones who get injured. i said, we could do a search training program for women to train them to search their communities and they could train other women. we could put the kits together for them. we could put the training into french creole.

he said, this is great. we committed to spend $250,000 supporting this program. it was through the clinton global initiative. it up as a little while to get this all put together and translate it into the kids -- it took us a little while to get this all put together and translated into the kits. my team was ready to go the week of the earthquake. i had a meeting with president clinton in new york. i said, wait till after the meeting, then go. we held off sending the team over there. i was at u.s.a.i.d. meeting with the new administrator on wednesday morning. on wednesday afternoon the big earthquake hit. that changed the whole meeting in new york.

it changed it to our response meeting. president clinton asked me to go with him to haiti after the earthquake, and i did twice. i just want to tell you, with the support of mayor bloomberg in new york and commissioner bruno and the new york city firefighters and emergency management, the team that they volunteered to use to help us do the training -- sean penn has an ngo organization in haiti who was managing a camp of 60,000 people. sean penn volunteered for his organization to support us to train in their camp first. we have just completed the training and a certificate ceremony for 415 asian women in

that one can -- 415 haitian women in that one camp. it was so well-received, they had to turn people away. the wanted to help so bad. we hope that some ngos or organization will pick this up to help us. we wanted trained 20,000 people in the bank in one year. it is more difficult, but we will have to have help to do it/ -- do it. i will close with this, and i know you are very glad. each of us, no matter who you are, you can make a difference in someone's life. you can help a neighbor. you can help yourself and your family. you can help the business you work in. develop a family plan for your family. if you have children or grandchildren in school, if you have -- most families mothers

and fathers are working. if you are at work in your kids are in school and something happens, where will they go? what will they do? haev a p -- have a plan of where you will meet or someone that lives outside of the state -- a relative or friend -- a phone number that they can call and say, i am ok, and everybody knows it. particularly, people with special needs and communities. it is really important that our churches get involved. we need to know who those people are. i know that david and his wife -- they have a special needs list in arkansas. sometimes, not everybody is on the list. local churches, local senior citizens centers, they know these people. make sure the list are up-to-

date. it could make the difference in someone's life. i will close with this. i was at a fund-raiser for the john leland seminary in virginia. there was a baptist minister from argentina. he said, in argentina, we have part ofg, if we're not planting the trees of the future, we did not deserve to stand in the shade of the trees of the past. we need to plant some trees. make sure everyone sees this exhibit. it has valuable lessons in nit of things that have happened and what you can do. it is very important. i am pleased that we are putting this on. i'm very thankful for sta -- all state for their support of

this. let me tell you about all state. [laughter] they have been a huge sponsor of our organization. i want to tell you why. if you look, not only along the eastern arkansas for earthquake insurance, or in california -- do you know how many people in california have earthquake insurance? less than 12%. why? the policies are so high and the deductible is so high that people cannot afford it. we have a vision of creating a catastrophe fund in every state that is funded by the insurance industries. .

>> the other goal which we have legislation in congress right now, in the house, is it to pass a national backstop that would be funded by the industry, that would grow. if a state got overwhelmed from

their fund, they could borrow off the national fund. as the state fund grew back, they would pay that back to the fund. i want to tell you folks -- people along the gulf coast and the east coast all the way to new york, and the middle united states and the west coast, insurance premiums are so expensive. and it is not a bailout. the bailout comes when people do not have insurance and the federal government, through fema, has to go through and pay for their recovery. that is the bailout. so we need to change that. and we are hopeful that hr 2555 will pass, and we just hope that the senate will follow the path. [laughter]

but they have been a very, very strong supporter of us, and i am glad they are sponsoring this because it is very important. ed collins, with the insurance company, has really been a tiger about this. so i will shut up. i know you are glad. i will tell one more story real quick. [laughter] i gave a speech one time like this to an audience may be a bit bigger than this. i was giving the speech and a guy sitting in the front row, in the middle of my speech he gets up and started walking out. i said, "where are you going?" he said, "to get a hair cut." i said, "why didn't you get one before you came here?" he said, "i did not need one." [laughter] i would be happy to take your questions if you have some you would like to ask.

>> let's give him a round of applause. [applause] please raise your hand so we can recognize you and then wait for the microphone to get there. first of all, thank you for coming. and you did a great job. would you comment, if you can come on the oil spill and what you see? >> this is probably the largest catastrophic event our country has ever seen. we thought the valdez oil spill was at that time, but this is very, very devastating. we have been in louisiana since katrina and gustav. we know those parishes. we know those people. even before this oil spill, they were losing the marshes and ocean wetlands. they were losing the size of a

football field every day. now this oil has gotten into those marshes, and it has shut down the oysters, shrimp fishing. it is going to devastate the economy down there. and i am really proud that the senate and president obama met with bp and got that when the dollar billion fund set up. that is going to be really important for sustaining some of those businesses and some of those fishing vessels down there right now. this spill is so large. in the thing that concerns us is you see the spill on top of the water. but now they have plumes of spill that go down 1,000 feet out in the gulf. what really concerns us now is we are 18 days into hurricane season, which goes to november. and the ocean is 44% warmer this

year than it was last year during hurricane season. and we have been in what they call, if you are familiar with an el nino season, where the jet stream stays down south, that is what kept the hurricanes away last year. now we are going into a lot minya -- into a la nina season, where the jet stream is moving north. it is like a trough coming through. noaa was talking about a model of what would happen if a major hurricane got in the gulf. in some cases, it could help it a little bit. but if the storm surge is big enough, and if it was a big hurricane, then you could have contamination in land 4 miles. -- inland for miles.

that is what is scary. you do not know and i cannot tell us whether the rigs they have out there, drilling those two wells down to stop this flow -- the cannot tell us whether those rigs will withstand a hurricane of major proportions. so this is going to be with us for a while. and folks down in louisiana are going to be suffering for a while. our hope is the president keeps the pressure on them, that they will at least have a living. i know congress has betting that -- has been putting the pressure on it as well. they have named a new person, bob dudley, who is going to be handling the long term recovery efforts. he works for bp. he is on the board of bp. the indications i have seen from him -- at least he is american. [laughter]

>> all right. let's take questions. wait for the mike, please. >> i am barbara jones, the regional minister for a christian church which covers arkansas, louisiana, and mississippi. we have lots of hurricanes there. my question is -- when you were on the cabinet, we knew where to turn for those disasters. when you were not there and katrina head, it was a mess, and we had difficulty finding help. and we have just now gotten back on our feet. i am talking ngos. and i am talking recovery. and we have had to do it on our own as churches. so we are very afraid of what is coming this season and we have a

conference call coming next week with the new administration. what kinds of organization is there now? where would we turn now, in terms of government agencies? how is it set up now? >> i am not there now, but we had a very strong relationship with volunteer organizations. we work with them very closely in depended on them, particularly for individual assistance and shelters and off, and particularly in longer-term recovery, and even short term. we even had agreements worked out where we would pay if an organization sheltered people. we reimbursed them. we even had the places where cats, and animals people would, bring to the shelter, and would reimburse the cost if they would

come in. they donated all their labor and so forth. people sometimes want to back away because they cannot take their animals to a shelter, which is not good. but i do not know -- we had a whole division that worked with volunteer organizations. i do not know what they have set up now. i know in katrina sylvia matthews of the gates foundation called me. they wanted to send $1 million to the louisiana to help make a difference. they said, "whom should they send that to?" i said send it to the organization on the ground every day. that is what we did. i do not know what they are doing now. i know most states -- most states have within their state plan the volunteer

organizations and exercise with them and everything. i do not know what fema has. i know they support the volunteer organizations, but i am not sure how much. >> please wait for the microphone. >> mr. witt, do you and the people you work with see that there seems to be any greater number of extreme weather events creating disasters, or does it just seemed normal? >> there is. look at what happened yesterday. 32 tornadoes in minnesota, was it? we are having more events and they are more devastating than we have seen in the past. and it would be interesting if one of the institute's would basically, through climate change or whatever, would track

this and report this in a way that people have a better understanding of what is happening in what areas of the country, as well as around the world. the worldwatch institute puts at a book every year called the state of the world. there usually is a chapter in that book on what is happening. you look back from the eight years we were there and today. the events are much more frequent. usually, they are more devastating than we have seen in the past. we have what we call cnn disasters now. the report everything. back other years, we did not have cnn. but i do not think it is just the reporting period, you know? and we always try to keep up

with it and follow at. it has been hit hard. i do not know. it has changed. and we do not have 1 inch rain anymore or half inch frame. it is 3 inches or 10 inches. it is just different. i do not know if i remember it this hot this time of year. [laughter] >> questions right up here. >> sir, the news i have seen on tv and have been reading has given me the impression that the government's response to the oil spill in the gulf has been disorganized to the point of chaos. and i would just like to know -- is that your impression to, or something else? >> i think that the federal response to it has been -- i think it has been good.

it is a difficult response. they have been working very closely, you know, with bp, and trying to stop the oil. and they put as much assets as the federal government has down there. some said they ought to put the military in charge of that. the military do not clean up oil spills. they are good at securing stuff and providing relief and so forth, and protecting our country and around the world. but the coast guard is the right agency to be there are right now to deal with this. you know, i was talking to governor jindal the other day. i said, "maybe you need to ask for a federal disaster declaration, for protective measures." and i think in a lot of cases the states along the gulf -- i think that our kind of reluctant

to ask for stuff like that simply because they want to make bp paid for what damages the half. they do not want the taxpayers to be paying for itt they want bp to pay for it. i do not blame them for that. i think president obama and the federal government has put as much resources as they can possibly put in there to support this effort. has it been perfect? and though. could it have been perfect? i doubt it. it is a very difficult thing to deal with. i do not think we -- i hope we never see something like this again. environmentally, it is catastrophic. there is no doubt. and there will be a lot of lessons learned from this. and there will be a lot of changes not only in the federal government but in the state and local governments around this, from these lessons. it will be interesting to do the critique of the response to this.

i know that will be done. they have done a decent job at it. >> questions. yes, sir. he is coming with the mic. >> i used to work in management with the state and still have my certification. dealing with the situation in mississippi county, i read a lot about the 1927 flood. but also when i worked in that job i met with some people in mississippi county, especially mayors of small towns. they said they could not have development because their terms were in a flood plain, all of it. what did you think of the remapping? what can best serve both parties, with safety being first? >> i have looked at the remapping, and i understand why

they want to do that. if there is a possibility of anyone could be affected by a flood, they would like for them to at least have an opportunity to have insurance. to have that coverage. some people say they are going from a 100-year flood plain 28500-year flood plain because they were behind $23 billion from katrina and want to make that up. i do not think that is true. i think that are trying to manage the flood plains in the sense of people being covered if they have already built there. if you are going to build a 100- year flood plain, you are taking your own risk yourself. that is just not good. but that is the reason i think

they are doing this, is to manage the flood plains in the sense that people cannot have insurance and will be able to purchase insurance. that is the only reason i think they are doing it. when we started -- we started the program back when i was at fema of digitizing all the flood plain maps. you could go on line and you could see where that floodplain was. and i know they have been finishing that program and working on it hard, which is a good thing. i think that is the reason they're doing it. i know in eastern arkansas that it is a major problem right now. and i know that people that have lived in a 500-year flood plain from a river or a creek or a stream that have lived there for 50 years and never seen a flood are not interested in flood insurance. i know that. but if they -- if you live in an

area like that and are going to build a new house and those floodplain maps show a 500-year flood plain and you do not have flood insurance, you are not going to build a house there. >> before i asked the director of the clinton library to give you a preview of this great exhibit, let us give a round of applause to arnkansan james lee witt. [applause] >> another local look now at the aftermath of the bp oil spill, this one focusing on cleanup efforts. this is about 35 minutes. >> >> i am under the weather.

how are you doing? i came in to see the y'all. how are you doing? >> you should not have. >> ms. jackson and i know each other. >> take care of him. so special. >> i have seen you before but we probably have not met. >> i am going to tell you what we are doing. >> i still like my little kids. [laughter] >> i knew i was going to shut down soon. i had not had a day off. >> i am amazed you have gone this long. i was worried about kevin. he is not too young. >> i gained 90 pounds. i know. >> but we are still young. do you know jackie? and danielle, from arnie's

office? we have such beautiful pr people. >> the fund-raiser was all you could do. it was unbelievable. >> were you expecting that many people? it was unbelievable. >> i wanted it to be nice. they need to know what they need. they knew. -- they note i knew. >> we went to hig >> are you feeling better today? >> i still have a fever. i am still dragging. >> we need to get him out of here pretty soon. >> i am not going to stay long.

i want you to understand what we did. early on, right after the accident, we knew we were going to have problems. they kept saying the dispersant was going to make it sink and it was not coming to shore. venice is right here. we knew we had to stop the oil out here. we had asked for jack-up boats that get out of the way of wave action. we kept being told we did not need that on the shore. when the president came down he did not hear about our plan. he said to put those in place. we have a jack-up boat placed here and another on this side. they never did improve -- did approve any more. but these boats would ride the course every morning looking for oil. unfortunately, the first oil to come to shore came in a storm. the next morning at 6:00 it was

there. it was over in this area. three weeks later, it still had not been cleaned up. it killed everything in that march. >> what took so long for people to mobilize? >> they did not have the money. >> why did not people mobilized? whose call was that? as i was saying, everyone was worried about was coming out of the ground. we were worried about what was hitting the ground. isn't that as important as what was coming up as going out? >> offshore, we've seen some tendencies, but most of those can swim away. hear, when it comes in, it blankets and smothers everything. >> and you can get it out of the wetlands. >> it is really heartbreaking to see what is goong into the area that is it for three weeks later, they still did not have a plan. the governor and a lot of local leaders came in, we went out and

suck it out. and we embarrassed them into acting. today at 2:00, i will not be there because i am under the weather, he called last night to find out they will finally put in a machine. unlike what we have which states that everything, his machine takes the oil and water but puts the water back with less than 1% of the oil. >> how many boats of kevin's did they -- >> i think they're doing 20 of the big units. we are asking for 18 of the small units in here, for the smaller boats. the larger units are going out to the barrier islands and try the sake of -- soak up the big stuff. we're losing the battle once again we embarrass them into doing the right thing by putting

these -- >> whoa kevin be here? >> yes, they're going to where they are deploying the first ones. >> i just got a call and they said it where were going to do it today. >> i cannot believe it. p+>> if only eliot ness were he. >> he comes back 25 years later. >> he's hysterical. >> but we've gotten everyone of these blue dots where they've got oil. >> it's staggering. >> the wave and the wind blows it one way or the other. our big fear is that all of florida, we get a hurricane or a small tropical storm, it will

blow it up into the bayou. it devastates the west side and then the east side. >> if they get these machines, does he had 18 machines? >> he's got 30 of the big ones. that is what they're talking about today. and they're going to take them into what they call the blue water. the one that we had asked for, they just tested them for brown water, which is in those tests where they're supposed to give us 18 of them. i think the pressure of bps today shutting them -- the bp yesterday shutting them down. >> you heard about that. shedding non those barges because of life preservers? -- shutting down those barges because of life preeervers? come on. >> and the coast guard agreed with that?

>> i am not after the guy. he is shown no leadership in this whole thing. you get comments like consider, maybe, mike. that is not a leader. let's go do it. you don't and singer -- consider bringing in vessels from other part of the world. >> you just have to do. >> you pull out all the stops and make all the things -- anyone in the world that can pick up this oil should have already been deployed. in a discussion yesterday, they said that it would take two weeks. do we think this is to be gone into weeks? >> what i said when it first happened, if you're the only one on the scene at that time and you are already predicting what could have been done and what should have been done immediately and was coined happened and what they could do to prevent. i said, listen to him.

circle the wagons. i told this to the us secretary of the commerce. i told him again publicly the other night. we told you all to listen to the local parish presidents, don't get every ship you can get your hands on, circle the wagons, get a big circle around the well and don't let it pass there. that is what you do in war, for god's sake. >> in nooth found washington, where are all the boats, where is it? >> every military budget that we young -- every military boat that we own. >> even the numbers ttat they're putting out there, 26,000 people on the ground, i still do not believe that. i have asked them with my guys in a helicopter, start counting what they have coming in.

they said that there are going to do it but it still was not been done. >> they say that it is empty. indeed ne animal preserve, he said people should be put out on the beaches collecting it at 6:00 a.m. and nobody was there. judy when she called me, she was crying because she saw brown pelicans. when she first call me. >> they've got them tried to crawl back up. and what has happened, we had been meeting here yesterday because the person that bp hired to be over the animal thing refused entrance to one person. we were one and ago to the lsu tigers, and i was dropping the chain, and they said, hey how are you doing. in a nice to see. nice to see it. hey, how are you. >> good to see. >> he just said -- they do not want you out here.

it's a contractor talking about the bird flies down the highway. the state and local people met, but to find out that they said it was the federal while white people, it is a contractor of bp. what is happening, they are making up their own rules. right. i was out there with anderson cooper the other night. they let him on the ground. when i knew he was coming, they let us send. it is my land. they cannot stop us. they are making up rules that you can take these pelicans and say, we leave them for five days with the also that they calmed down. show me were that as a role. that is not true. you might one believed them overnight if they're really upset, but five days -- >> that is what this mess is. there are hundreds of people waiting to come and help. wildlife experts waiting to

come to our shores. why are they not here? >> one group from australia was told to come. they walked up there and they said, we don't need you, you can go back home. from australia. and the guy came to see me, and here is what they're doing -- they are expanding because they need to. we asked them to add another bird place because you can transfer the board -- transcript the birds within 40 minutes. i think they're trying to keep their mouths of work spread out. like, we will get an area inundated with 100 birds. if they clean it up with volunteers as quickly as possible, they are out of work for three or four days. or they do not want to work them long hours. they will keep them up for a week, that is on excusable. and that is what they're doing.

if that -- you can see the pelicans that have not -- should and covered with goals for days -- >> covered with oil for days? who made that decision? that is a bp decision. that is not a wildlife expert. what about the young man on the national show, i cannot remember his name, but he was saying that there were plenty of people waiting. >> there putting the state and federal wildlife over. >> you remember this. we have one of our best experts, they were performing better than most of the state probably put more into their hands when it was mixed at mobilize them. -- miche that mobilized them. >> the problem as.

>> bp is controlling it. >> they are not trusting them. and there's nobody on the ground with bp saying, no, that is the wrong way. we're going to do it this way. >> how you actually get someone to finally move bp out of the way. >> yesterday's with the meeting with state wildlife, we got them control.ze that they are not in >> can all of us make that official, that bp no longer has control of your parish? >> is the coast guard supposed to be in control right now. i will love to be sitting around the table working for every issue with them. i would much rather be cleaning up the old been yelling and screaming. and i have done that for a couple of weeks in between, and just like right now, and there are a lot of coast guard people

here and local bp people are great, but we have got to get to a point where when something needs to be done, i can grab that person by the arm and say, let's fix it. and it is not to that point right now. >> you got four states being affected directly right now. why is there not a single point person with coast guard, bp, for each of the four states so that when you as a parish their resident -- as a paris president has an issue, there's one single person that can clear all of this. whether a wildlife issue or a boat issue, or clean up the issue, anything that we're dealing with. it doesn't seem to be that difficult the process to create. >> i appreciate -- is sam here today? sam is a great guy. but you sing, sam could pick up the phone and call, let me check with that. sam does not have the card is on

that -- sam does not have the authority that thad allen says that he does. it sends up the chain of authority and never gets an answer back. i think a lot of the bp people on the ground do not have the experience or rely on contractors that to me are more interested in putting bodies out there to make money than they are cleaning up the oil. >> from the bp and coast guard standpoint, whoever is local, state wide not only needs to be named but have authority and decision making power so that they can make some calls so that you do not have to go to that person and they have to wait for coast guard and bp. there needs to be more of a controlled decision making process created here to get things moving faster. >> last saturday, we said this

is alan is to be done, pull every ship in the war will -- in the world with a separate group, we need vacuum trucks along the edge, skimmers on the outer edge, and a crew on that beach. when the oil comes up, when it comes up, you better get it or it goes back out the city. people stationed on the beach 24/7, and it s covering the territory. the skimmers are not going to do it. 500 ft. of boom, you boomlets' slowly and it goes back and forth that cover the whole bay. it can be done with four or five teams in a day's time. you circle it a lot. but you have to do it first light, late in the evening when the water is calm.

you skim along the edge, you get the heavy march out, and the last part of that team is going to be -- and it better be doing it now -- one of three things. something to spray 1 marks to give it a chance to come back,%- secondly, something to get the sticky blackness of, for third to absorb all like peat moss and blowing in there. they need to test all three, but once we get all the oil out, we need to be ready to spray. i am not an expert, i don't know which is the best, but someone should be testing something so that when it is time to do that, we can have the best chance of saving the marsh. all those teams need to be deployed by area. if he is in charge of this area, and we see that there, we call a month, he brings the team there. >> exactly.

>> if this team has no oil, they can come over and help this team. we know more is coming. we know the wind and the waves are going to pick where it goes. we best start having attained, like, i start with one team and i took to others out. so that they know what to do. they go out and do it. today, we're not supposed to, but we started looking up the oil boom because it is not getting picked up. we brought 20 garbage cans with bags, put them in and tied them up. we went and got a shot back and pick up 110 gallons in 15 minutes. we've got some word about the electrical components. we got an air compressor run in the vacuum so that it is going

out today. tomorrow, if it works, we bring in four teams. >> engineering. >> if bp does not put the votes out to circle all, we will then put three teams together to do that and then go out with these machines. >> those are ready to go back up. we know we had that delay in jefferson, but they are back and ready to go now? >> are they not out? [inaudible] >> if i am not in my boat and the coast guard pulls up, they want to know if i'd been drinking, if i have my life jacket on, my registration, and many of those, they write me a ticket or they take me in. they do not shut me down that is what i did not understand. i have been on offshore

vessels, where they pull up and get on board and they go through whole vessel, and then they get off and leave. why would they shut them down? [inaudible] it is frustrating. it is hard. >> they have a book that they go by. if it deviates from the plan, it is not on the book. they do not know how to do it. >> if they are not flexible, then you need someone out there who is flexible. >> a lot of people are out there watching i was glad the president approve that when he came down the first time. we would like to add additional boats to be more on top of it. we had eight boats on standby.

the president thought it was a pretty good idea. and i have done emergency response. >> i think obama should make you in charge of everything. >> no. >> i think you should be running it. >> he knows you much. >> is a lot of simple things that can be put in place. >> i know patricia was saying that in jest, i think, but to take that point, why not if it is not been done, why not have a daily capt. meeting, two or three times a day a cabinet meeting where you and chris roberts and some of the other leaders from all of the affected parishes -- the mayors, all on the phone, at least once or twice a day, directly with washington so that they can make those calls right there in that

conference room. >> we were in a conference call with the white house, but it is pretty much, we will take that under consideration and mbeki. >> i'm talking to someone literally right under the president that can make the call. >> wherever the command centers are, the person -- there should be one coast guard, one bp, sitting there and i should be able to go down and get an answer. >> you should be in charge. people elected you. you know your areas. we had a resolution yesterday that said it emulated the regional planning commissiin that said that for every parish, the president is in charge. do was the president needs. if it is a berm, if it is a rock side, if it is a barge, don't question. we got a resolution saying give you all the power.

you know your area, you know what is best, and it will be different in the sherry. why they trying to figure it out globally? that is not going to work. >> just like the berms. some of the naysayers have been because they did not want to spend the money to do it. the question was not -- you know if you get something out here, is going to catch the 00. the one and the governor changed from the coastal plan, if you go look at the oil, it is this that that is washed up on the beach. it is kept out of the marshland. just that 15000-foot area. >> and when we brought this resolution of, one of our council members was a word about the scientific criticism of the berms. she weighed in on that but i came right back, we both came right back and made the statement that, that is not true for every area. the berms will work somewhere. that criticism has been because

they are doing everything globally. it will work somewhere. >> when the president said we're going to have a roundtable discussion in the next three days, hancock and within 24 hours i will give you my answer. i said, that is fine, mr. president. what we heard was a bunch of naysayers halfway through. i one up and said, this is a dog and pony show. i am one to call the white house. i left the meeting and went outside and had an interview with somebody. i went back and, he called interrission, he said, we're going to give the parish presidents and the governor a chance to speak right after this hearing so that we can hear their side. i said, i am ok with that. we all spoke. at the end of that, the secretary stood up and she is giving her points of view, and i said, let me cut to the chase. are you for or against the berms? she said, well.

no, i'm ok with them. i will take that as a yes. now to the rest of the panel, you of all ledger of his -- you% have all had your peace. are you for or against them? everybody against it, raise your hand. you're all for it. we need to go back to the president say we're in favor of ending could ago. no one here is against it. and i was on conference call for weeks leading up to this. they all had the water flowing over there 20 years ago, we had an islander. it did not look so bad then. let's put the island back. at the end of the call, and i asked everybody, anybody on their wants to say don't do the berms, because the alternative is oil in march. nobody would say no. but they would say why we should not do it all along, but at the end of the call, to this day, i cannot find one person that will

say in a yes or no question, note, do not do it. >> i said that they are not scientifically unacceptable. there were scientifically not preferred, but that was in a perfect world. the alternative to oil in the marshes brings a whole different picture. and that is what they are not taking into consideration >> fimian the governor flew over yesterday. the land is actually coming out of the marshall rig. i got goosebumps flying over it. the federal wildlife said, if you don't know what you've done done. we would never live to see those islands bill back. and they should be billed back. we will lead to this as we go forward. but because of the challenges of naysayers, and this of the

federal wildlife people that have that taken care of, we have been trying for 20 years to add dirt out there. when we hear from the ocean current experts and florida, it is going to take more beach awful florida beaches. wait a minute. they were there 20 years ago. now that they are there, adding to them will not be as difficult. so this will be something historical for the whole region. as long as we can get through this hurricane season, we're going to on them. we've already started a foundation for people who have donated money to help on them. we will put in trees that will keep them growing in salt water. >> i go back 16 years. from family different. -- 60 years, blue water fishing.

he is simple water. >> i caught a king mackerel. it weighed more than i did. >> we know you're talking about. we saw those island. we watched him disappear with the layman's eye. whatever you can do to restore them is where we have to go. it is where we had to go before katrina and before that oil spill. it is worse now. >> you kill two birds with one stone here. this is almost a no-brainer because you were helping the oil spill but you are helping -- especially we get past this year and on them -- your help in for years to come. that was one of the most encouraging thing about the president's speech. he started really focusing on the coast restoration which we have all been working on but now there is more and national spotlight. >> we have to be a very aware of this.

i had a hundred or oystermen going crazy with a national people talking about, we let the levees go and that's what we need to do. there's a $200 million diversion being looked at with moral growth started many years and in the planning stages. my thought has always been, our coastal plant is putting a berm on the levee to protect the parish, then to come out and build a natural riches the way they were before, pump them up 6 feet with trees, and in the barrier islands. in total, it would add 15-18 feet to our parish. the important thing and all that every time we get a 10- m.p.h. wind, it comes out here. if we had this, this, this, and

this, that salt water is not going to get there. it is going to come here. then all of this is going to grow. we do not need a better one. we're going to show, and we're workinggon a locally with the scientist, we are going to show green arrows coming out of there, and salt water pushing it back up. then we will put our model here and show that those green areas come to hear. with the present version. after the barrier islands and all of our ridges and islands we reestablished, if we determined we do not walsall water up here, and we want to increase the diversions, that is the time to increase it. but let's spend our money keeping the salt water out. because you're never going to fight mother nature. making a diversion without restoring out here, it is a fight that we're not going to win. we've put more water out, a strong wind will blow it back again. that is why our focus, and

sitting on the governor's board, they're letting too many scientists have their input into the plans. in needs to be more practical plan. a plant that is going to get the most bang for the buck. [inaudible] i started the foundation years ago. i gave them catering free and was emboldened to clean up the lake. it has turned into one of the most extreme groups. they were against the berms. i ask for a statement saying that and it would not do that. they said that everything is bad for the empowerment. they are to diversions, don't build nothing. right now, our pompous about as high as 4 feet. i had mitigation since i was building on the airport which is absolutely ridiculous. >> from pure scientific

statement, we have no maritime industry. how practical is that? there has to be a compromise and a balance. i don't know why -- again, the local parish presidents are the ones who are the boots on the ground and understand what is best for your area. i -- they do not understand the salt water -- that is not figured in when they talk about berms. they don't realize what it is preventing. they only talk about the perfect world. >> we agreed to go to half the barrier island out. the back side, you can have neeting and that is great and we will protect them. but it this island was not held within a year or two, those islands are continually -- so those pelicans move further and to other islands. the nesting grounds are all but gone anyway. this berm will give us protection that we need now to

allow them to start to nest out there again. >> go back to that point. driven you want to get down to see someone? in this weather, the boats that we have, it would be risky. beacon still go out on our planned trip. but if you wanted to see kevin, we would need to leave and we need to get a bigger boat or drive. one of the other. >> i just wanted to go out. >> then we will go for with our plan. [unintelligible] >> let me tell you. i am sure he is coming back to new orleans tonight. i will check to see where he is going to be.

>> i will track and down later. >> ok. and it is stormy out there right now. >> when i shut down, i shut down. i haven't eaten since yesterday it. if i go three more days without eating, i will be all right. >> we're ready to just boat today. where are we looking here? >> we haven't figured that one out. >> we will look there first. all right back row. >> there we go. >> all right, wonderful. >> thank you.

>> the supreme court confirmation hearings of elena kagan are set to begin next monday. c-span is the only network bringing you uninterrupted coverage from the senate judiciary committee. that is live monday, beginning at 12:30 eastern c-span 3, c- span radio and c-span.org. >> international leaders are meeting in canada at the g-8 and g-20 summit. they are meeting today to discuss several initiatives, including how to alleviate global poverty, dealing with nuclear standoffs with iran and north korea, and later holding outreach sessions with leaders of seven african nations. saturday and continuing on sunday, talks move to toronto for the g-20 summit, which includes china, brazil, and

india. c-span will bring you the closing summit of each this weekend.

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[inaudible] . . the prayer will be offered by our chaplain, father coughlin.

chaplain coughlin: let us keep only to truth and work for justice and the aspirations we hold on to elude the promises you have made and the words you have spoken. you rule over our actions now and forever, amen. the speaker pro tempore: the chair has examined the journal of the last day's proceedings and announces to the house his approval thereof. pursuant to clause 1 of rule 1rk the journal stands approved. if you can please rise and face the flag and join me in the pledge of allegiance to the

flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, madam, pursuant to clause 2h of rule 2, we received the following communication from the secretary of senate, h.r. 5136, signed, sincerely, lorraine c. miller, clerk of the house. the speaker pro tempore: the chair lays before the house, the following enrolled bill.

the clerk: h.r. 2194, an act to amend the iran sanctions act of 1996, to aid diplomatic efforts with respect to iran to have economic sanctions against iran. the speaker pro tempore: economic sanctions against iran. the speaker pro tempore: without objection, the house stands adjourned until 12:30 >> members may debate the bill next week. lawmakers are hoping to have it on president obama's desk before the july 4 holiday. see live coverage of the house here on c-span.

now a house hearing on mortgage foreclosure prevention. edophus towns chairs the oversight in government reform committee. >> good morning and thank you for coming. the banks and the financial system are now stabilizing. in fact, the major banks are even beginning toomake money again. unfortunately, the same cannot be said for millions of people who are unemployed, or who are in danger of losing their homes.

the threat of foreclosure is still at an all-time high. more than 3.1 million americans are delinquent on their mortgage by 60 days or more. a letter from the bank or a phone call from the mortgage company is still keeping many homeowners awake at night agonizing over the potential loss of their home. for these people, the economic crisis is far from over. as i have said before, to its great credit, the obama administration recognized early on that an important part of the nation's economic recovery is keeping as many people as possible in their homes. this makes sense from both an economic standpoint and a public policy standpoint. i salute him for that.

the home affordable modification program, better known as hamp, is a central piece of the treasury department's effort to carry out that objective. hamp had a troubled start, but it appears that some significant improvements have recently been made. more than 1.2 million homeowners have now started a hamp trial modification. 346,000 have obtained a permit modification. the median savings to these home owners is a little bit over $500 per month. the number of permanent modifications has more than doubled in the last three months. there are still major problems with hamp. the chief complaint is a slow pace at which servicers are

modifying troubled mortgages. there are still considerable concerns over confusing and conflicting communication from loan servicers and borrowers. while more modifications are being made, few were delinquent borrowers appeared to be qualifying for hamp. most important, many of the borrowers who obtained a trial modification dropped out of the program later. it appears that a majority of the mortgage modifications obtained under hamp may not be successful. a separate and deeply troubling issue is raised by a new study by the center for responsible lending, which found that minority communities continued to experience significantly higher foreclosure rates that whites, regardless of their

income levels. this confirms similar findings reported by the national community reinvestment corporation in the last hearing of hamp. a day of like to hear from the banks exactly how this disparity can be addressed. we need to do a lot better than we have done in the past. this is not just about hamp. the mortgage banking industry has got to recognize that hamp cannot be the only solution to the foreclosure crisis. some of the banks appearing today have begun to save homes from foreclosures with principal reductions, second lein loa modifications, and other help for the unemployed. these sound like a good first steps, but i want to hear more. i want to see broad participation throughout

the industry. foreclosure is a losing proposition for everyone involved. the homeowner loses a house. the bank loses a big chunk of its investment. the community loses a family with a stake in the community. what i'm asking the banks to do is to help us find an effective way to stop these foreclosures. i want to thank our witnesses today for appearing and i look forward to your testimony. i now yield five minutes to the committee ranking member. let me just say this before we move on. we are going to get five additional minutes on each side. after york opening statement, 5 minutes on the democratic side and five minutes on the republican side. that can be split up as many

ways as you want to. you have five minutes. mr. jordan. >> thank you, mr. chairman. thank you for holding today's hearing for examining the administration's continuing failure to respond to the foreclosure crisis. the committee will not hear from the treasury today. since the last hearing on hamp three months ago, treasury has continued the pattern of secrecy, dishonesty,. and. -- dishonesty, and failure. it misrepresents the original goals of the program. most importantly, the obama administration's tinkering in the housing markets has failed the american people. just this week, we learned treasury has kicked more people out of the hamp program than have received sustainable modifications. "the wall street journal" reported that many of these people are actually worse off.

i look forward from hearing from the industry today. in fighting the implement terms of the program while ignoring the designers of the program and the people responsible for the waste of $75 billion of taxpayer money is simply a failure of oversight. i am also disappointed that gao was disinvited from today's hearing. they published a report this morning to coincide with their expected testimony at this hearing. their perspective would have been valuable for this committee to hear. we have a joint responsibility to the american people to hold this administration accountable, regardless of political affiliations. the servicers we hear from today have worked to comply with eight hundred hamp rules issued, and

over 1500 different sets of guidelines. not surprisingly, they've offered more modifications privately held side of hamp tahn han within it. the best mortgage modification is a job. the implications are filled by former homeowners across this country. thank you, mr. chairman. i yield back. >> thank you. we did have treasury, gao, and six talks. we can only have so many today. the gentleman from maryland. >> thank you, mr. chairman. i am concerned about the claims -- first, thank you for holding the hearing. i am concerned about the claims published in "the washington

post" that a growing number of borrowers are failing to move from hamp's initial stage to a permanent loan modification to be more than 100,000 borrowers lost aid in may. about half of those dropped from the federal program received another modification from their banks, according to the government data. housing counselors have complained that the loan modifications are typically not as generous as what the government program offers, and often comes with upfront fees. i'm interested to see how these options have been communicated with the borrowers. getting started and understanding the process can be one of the toughest steps. over the last 15 months, i have held four foreclosure prevention workshops in my district. the key is that we have to have

effective and efficient programs. it's one thing to talk about them, but it's another thing to carry them out. hopefully the people testifying before us today can help us get better insight as to helpfullhon keep people in their homes. the house is the no. 1 investment in most instances. i think we need to be doing more and more to help the people retain their homes so they can have the stability so they can keep their families stable, and also so we can keep neighborhoods stable. with that, i yield back. >> i now recognize mr. turner. >> yes. can you clarify how the time is? there are five minutes over

there and five minutes over here. >> yes, he yields back, so we still have three minutes on this side. >> mr. chairman, you the acknowledged the request by the ranking member for a representative from treasury to reduce said we can only do so much in one day. we are hard-working committee. >> will the gentleman yield for a second? we have had treasury. >> you have not had them since monday when they had the report issued the said the program is failing. i have serious questions. just yesterday, the treasury secretary appeared before the congressional oversight panel. he was asked a question about hamp. he said this program was not designed to prevent foreclosures. it was not designed to sustain home ownership at a level that

would be unachievable. he goes on to say, "i think you are describing exactly the objectives that have shaped this program." in response, the chair said, "i was surprised and frustrated by the notion that the secretary seemed to be saying that a program that helps only a tiny handful of families is successful, when, in effect, the rest deserve to lose their homes." she found that shocking. i find that shocking. i find it inconsistent with the chairman's opening statement. i find this inconsistent with what the president told the american people this program was going to do. we have an absolute crisis. this is not over. i'm from montgomery county, ohio, and the foreclosure rate

is staggering. this needs to be addressed, not only by treasury addressing this program and givvng people real answers, but also for the financial institutions. we cannot lose focus here that the financial institutions got us in this mess by their lending practices that were not sound business decisions. the concern that i have, as i looked at treasury and then to the financial institutions, is the decisions are being made curtly that do not protect capital. every member of congress can tell you that the realtors in their community tell them is impossible to get loan servicers, banks, and financial institutions to work with a home buyer, to get a short sale to do things that would avoid foreclosure. this is what i do not understand. the hamp program is supposed to

preserve capital for the banks. apparently, it's not a program that even the banks are pursuing. when you look at the market, any time that we can avoid foreclosure, you make more, you preserve your capital, and the market's sustained more. when a home goes into foreclosure, prices in the neighborhood drop. i'm interested in why this program is not working. why isn't treasury here? also, from you, why are you not operating in what we would believe a market standard of capital preservation, because we are continuing to proceed toward foreclosure at rates -- deals and offers would have a higher return than foreclosure does. i'm interested in some of those questions today. >> i now recognize mr. kucinich.

>> thank you, mr. chairman. >> you have three minutes. >> i will take 1 minute. we know that the state of ohio received another $172 million so people can be counseling individuals on how to stay in their homes. i'm grateful of the administration for that. servicers have been referring eligible borrowers to foreclosure. treasury had to intervene to try to put a stop to that practice. we know that bank of america has 13% permanent modifications. j.p. morgan chase, 20%. wells fargo, 22%. citimortgage, 23%. this whole program is about keeping people in their homes. we're finding that the

servicers apparently are not stepping up in a way that can encourage more and more people to stay in. we know that people are not givinen understandable reasons y their home affordable modification program is denied. it is sketchy help people appeal denial. these are all things that this hearing is going to get into. we're glad you're doing what you're doing, but is not enough. >> the one minute is up. >> thank you. the gentleman from virginia has two minutes left. >> thank you, mr. chairman. i appreciate this the fed sine

steadfastness of our friends on the other side of the aisle. it's important to remember they're the same ones who stood by for no or loose regulation that created the subprime bubble in the first place. not one person in america would have been helped if their votes had been the majority vote when we looked at the recovery and reinvestment act. >> will the gentleman yield? >> i will not yield. they're not succeeding to the fullest extent. there are some among us who would have helped not at all. thank you, mr. chairman. i yield back. >> the gentleman from north carolina has two minutes. one iminute.

>> thank you, mr. chairman. my colleague on the left is flat wrong. that is not the case. we want a workable program that will help homeowners, not a failed program that is expensive to the taxpayers and does not help homeowners. it has been a failure. gao reports -- if you talk to people, they will tell you it is not working. i've been front and center trying to help homeowners. it was the party over there that would do nothing about fannie mae and freddie mac, which added fuel to the fire. rather than blaming bush, let's move forward and try to do something reasonable for homeowners. we want to fix this problem, not

simply throw money at it. we do not want empty rhetoric. >> time is expired. >> thank you. >> let me just say to all of the members of the committee, there's enough blame to go around. we have just put things in the proper context. we have had the the treasury department and the gao testified at the first hearing on this issue. treasury was questioned by the committee for more than three hours on the performance of hamp at the first hearing. now it is the banks turn. we're going to hear from them today. more importantly, hamp is not the only way to address this problem. hamp is just a part of the solution, but not the whole solution.

we need the wholehearted cooperation of everybody across the board, even this committee. on that note, there is ooe minute for the gentlewoman from california. >> thank you, mr. chairman. i think the american homeowners who are grieving right now and pleading for some kind of modification -- they do not care if it is hamp or something organized by the bank. they just want relief. the one critical issue we have to look at is the conflict of interest that exists where there is a mortgage and a second an interest in the second mortgage, and therefore will not negotiate a modification with the first mortgage. that is a serious issue and one

we should address today. i yield back. >> all time has now expired three we turn to our panel of witnesses. it is committee policy that all witnesses are sworn in. if you would stand and raise your right hand. do you solemnly swear to tell the truth, the whole truth, and nothing but the truth? you may be seated. but the record reflect that all witnesses answered in the affirmative. -- let the record reflect that all witnesses answered in the affirmative. mr. das is the chief executive officer of citimortgage. mr. desoer is the president of bank of america home loans, the nation's largest home mortgage servicer.

mr. david friedman is the chief executive officer of american home mortgage servicing. welcome, mr. friedman. mr. heid is the co-president of wells fargo home mortgage, which services and one out of every six mortgages in the nation. mr. david lowman is the chief executive officer of chase home finance. welcome. and a real-estate financial services consultant, welcome and we're happy to have you here. at this time, i will ask the witnesses to deliver their statements. let me explain. there's a light that comes on. it is green.

after four minutes, it becomes caution. and then it will turn red. red means stop. i just want to remind you how that works. mr. das, widely start with you and go right down the line? >> thank you. thank you for the opportunity to discuss citi's efforts, and describe our process in implementing the home affordable modification program, hamp. in the ceo of citimortgage, and i'm honored to be speaking with you today. as ceo pandit has said, we owe a debt of gratitude to the american taxpayer and the government.

we believe it is our responsibility to help american families in financial distress, and to help families stay in their homes. as one recent example, just last week, citi became the first major lender to announce a 90- day moratorium on mortgage foreclosures in the gulf coast region. our goal is to help families who have been hard hit by the devastating oil spill. at citi, we are focused on two key priorities. working hard to make the hamp as successful as possible, and providing solutions for distressed borrowers that do not qualify for or have fallen out of the hamp process. the focus has produced significant results. is consistent citi week ranked among the top performing servicers. since 2007, we assisted more than 900,000 families in their

efforts to avoid foreclosure. we know the hamp process can be somewhat complicated. we've hired a special people o focus solely on the hamp program 3 we've added more than 1400 employees to support our efforts. we have invested in the processing systems so that applicants can now view their application status and documents on line. customers are also notified electronically when they meet key milestones in the application process. we have learned that borrowers can be reluctant to work directly with servicers. we increasingly work with third parties mortage modification l reach. also, even as in face-to-face meetings with borrowers who need help.

our goal is to give every distressed borrower the opportunity to reach us for assistance. we have designed procedures to ensure the fair standards for all applicants. despite these initiatives, challenges remain. for example, hamp has been revised multiple times since march 2009. with each change, additional training is required, which impacts the program deficiencies. factors beyond our control often prohibits customers from moving from a trial modification to a permanent hamp modification 3 in the majority of these cases, the required documents are not submitted. since the program does not fit every borrowers needs,

infrastrciti is providing solutions. as part of this effort, we offered a number of supplemental modification programs. these solutions are tailored to the homeowners unique circumstances and deliver an outcome that is affordable and lasting. our own proprietary program assist customers with a variety of solutions addressing challenges such as unemployment an imminent risk of default, and utilizing a variety of strategies. these solutions are described in the appendix in more detail. we believe the issue of affordability is the most important consideration in modification. we do not believe there's a one- size-fits-all approach to affordability.

for those borrowers who face severe hardships, infrastructu citi offered a numf customizable solutions. we are participating in programs as they become available. these programs enable borrowers to avoid foreclosure. i'm understand there's much more work to be done. citi remains focused in achieving affordability. thank you for the opportunity to speak before this committee. i'm happy to answer any questions you might have. >> thank you very much. mr>> thank you for holding a hearing on this very important issue. since january 2008, bank of america has completed more than 630,000 loan modifications, and we continue to innovate.

with the acquisition of countrywide in july 2008, bank of america's servicing portfolio changed dramatically, both in loan type and volume, more than tripling to nearly 14 billion customer loans. we have undertaken a massive retooling of the organization to address the needs of distressed home owners. we have build a new default management capability, new processes, new technology, and a 60% increase in staff and more than 18,000. bank of america has participated in more than 300 community outreach events, opened assistance centers come and gone door-to-door to help customers understand their options. we are also participating in the hope now program so housing counselors can directly submit

completed customer applications. there have been rough spots. customers have experienced a service that is very inconsistent with our standards. we continue to learn and improve as we work through these difficult times, never losing sight of the impact of that foreclosure has on the individual or the community. since hamp launched in march of 2009, bank of america has build momentum in the program. for the past three months, we have led servicers in the number of completed modifications. bank of america came the first major servicer to begin implementing the second lein program on april 13 we took this step to provide customers a more affordable combined monthly payment. this march, we announced a principal reduction program for qualifying customers who 0 significantly more than their homes are worth. we began mailing offers on may 17 to provide immediate relief to those in the most imminent

danger of foreclosure. treasury announced a similar principle reduction program that will be effective later this year. we are working to align our own programs with theirs. as we execute the programs, it's vital to understand the current eligibility of delinquent customers. many customers do not and will not qualify for hamp. within bank of america's servicing portfolio, 1.4 million first mortgage customers are more than 60 days delinquent on their mortgage payment. of those customers, treasury estimates that 470,000 are potentially eligible for a modification through hamp. as of the end of may, bank of america has mailed more than 1 million solicitations, made trial offers to over 400,000 customers, started active trials with over 300,000 customers, and

we have 70,000 permanant modifications under hamp. hamp has been largely successful in making offers to customers. however, getting customers to accept the offers and complete the requirements required to obtain a permanant modification has been a challenge. in april, bank of america began hamp process changes that will require documentation up front before the trial period starts. we believe this will improve . still, a considerable amount of customers will not be able to afford their homes. in these cases, we invite customers to consider short sales. we inform customers about the options as part of the hamp decline process.

they receive letters that clearly states the reason for in eligibility. more than 40% of the declines we have mailed are because of missed payments in the trial period. bank of america provides a dedicated toll free number for customers to appeal the decisions, provide updated financial information, or discuss other options. we will not complete a foreclosure sale until the appeal period has expired create innovative solutions have been created to help customers sustain home ownership and bank of america is committed to executing those programs. all of us at bank of america, including the thousands of associates who worked on these issues every day, take seriously our role in helping people through this difficult cycle. thank you. i will be pleased to take questions. >> thank you. mr. friedman. >> we at american home

appreciate the committee's consideration of the complex issues surrounding servicers to implement hamp. this is a non prime servicer, that does not own or have interest in any of the loans that we service. our focus is on keeping borrowers in their homes while balancing our continued cash flow to investors. contrary to popular opinion, servicers do not make money on foreclosures. they benefit no one. there undertaken only as a last result when other foreclosure solutions are not available. we aggressively pursue any modification possibility in early intervention. all troubled loans are routinely reviewed for hamp.

although we have made it through solicitation efforts of our portfolio, we are again in the process of we soliciting every borrower that has potential for hamp eligibility. to assist borrowers in avoiding foreclosure, we have established a dedicating team of counselors and call center associates. we have invested in the development of improved proprietary information systems , build relationships with housing agencies, counseling agencies, and housing alliances, participated in outreach events, considered borrowers for proprietary modifications in situations where we are unable to offer a hamp modification. we have offered other foreclosure alternative

solutions. several barriers remain, despite significant process by the industry. even with the relaxed standards, the required underwriting documents are too burdensome. many borrowers are unable to provide these documents, or they simply choose not to do so. servicers who experience re- default rates of less than industry averages should be allowed to rely on their less prudent requirements. others are confused by program enhancements that are prematurely announced. frequent program changes have overtaxed servicer systems. the newly announced program has increased the number of so- called strategic the falters -- defaulters who purposely stop

paying their mortgages to get hamp assistance. the hamp program has experienced significant issues in converting trial period plans to permanant modifications. many failed to make the original payment and are now permanently ineligible for hamp. the complexities of the hamp reporting system have made it difficult to officially report many permanant modifications. not all borrowers qualify for hamp modifications to the top three factors for denials are the property is not the borrower's primary residence, or the documents restrict modifications, and the

borrower failed to provide a complete underwriting package. we have developed an appeal process. borrowers that do not qualify for hamp modifications are reviewed to determine if other options will prevent foreclosure. we maintain a robust tracking of resolution process that is dedicated to handling borrower complaints 3 take our responsibilities under the of we have been audited twice. there were no major findings or enforcement actions. burdens on servicers -- while performance is improving, the challenges persist even as the program matures. in conclusion, we are firmly

committed to hamp and to its goals and standards. we're anxious to see the program succeed. we look forward to working with the treasury and congress to implement any needed improvements. thank you for your time. >> thank you very much. mr. heid. >> i am mike heid. thank you for the opportunity to share the results wells fargo has achieved. because of the choices we have made, are disciplined underwriting, and the manner in which we approach foreclosure prevention, delinquency and foreclosure rates were 3/4 the industry average. just a few examples of the actions we have undertaken to achieve these results since the january 2009 through may 2010. we have helped more than two 0.2

million homeowners with new loans, either to purchase a home or refinance existing mortgages. we've existed a half a million loan customers with trial or completed modifications. 1/5 of those are through the hamp program. we assisted more than 100,000 unemployed customers with short- term modifications. starting in january 2009, we lead the industry by permanently for giving more than $3 billion in principal for more than 55,000 customers, which amounts to more than $50,000 per loan. we have begun offering home payment relief to customers affected by the oil spill. with respect to loan modification efforts, while difficult to achieve, we believe we must continue to balance the needs and interests of homeowners in financial distress with those who have remained diligent in making payments. much focused, deservedly, is directed to consumers behind on their payments, we cannot lose sight of the fact that 92% of wells fargo customers are

current in their home payments as of the first quarter of 2010. hamp is a good option for people who meet certain criteria. by the treasury department's own april 2010 estimates, only three out of every 10 customers are potential candidates for hamp. as a result, servicers and investors have additional programs for customers not eligible for likely will not qualify for hamp. taking all of these programs into account, about 2/3 of wells fargo's customers more than 60 days behind on payments are provided an option to prevent foreclosure. finally, with the plan, it is clear the industry was not prepared for the customers facing financial verge of as the economy became more challenging. wells fargo is not always consistent in providing the level of service we expect to deliver. we have committed tremendous

resources over the past year. we believe we've come a long way in improving our service. we have hired more than 10,000 people, for a total of over 17,000 jobs. by the end of this month, we will complete the process of assigning one person to manage one loan modification from beginning to end. our customers will know exactly who they're working with from start to finish. we continue to work with other industry participants. we have this done with 27 home preservation centers in six states where we have concentrations of @ risk customers. we all give wells fargo customers a short sale decision. we continue to have a dedicated phone line for your staff to

use in the event one of your constituents, our customer, has an event. we will continue to assist homeowners freed we believe very strongly and feel very deeply about our responsibility to help homeowners in a balanced and fair way. we believe our actions demonstrate our commitment to achieving this goal. thank you for your time today. >> thank you very much, mr. heid. mr. lowman. >> thank you for the opportunity to appear before you today. i am the chief executive officer of home lending at j.p. morgan chase. j.p. morgan chase shares your commitment to helping homeowners and stabilizing the housing market in our country. we're working to help families stay in their homes by aking their payments affordable. we have helped prevent hundreds of thousands of foreclosures

through our own proprietary modification program, hamp, and other programs. we have refinanced $21 billion of loans under harp. hamp modification performance has been strong. we are completing more than 10,000 permanant modifications per month. on average, home owners see their monthly payments reduced by more than $530, 28%. we are adopting an implementing the federal government's second lein modification program to help more borrowers. actively use temporary forbearance agreements, similar to the program recently announced by the administration. you asked us to focus our testimony on how we can make foreclosure prevention initiatives more effective for borrowers. from the beginning of 2009 to the end of may 2010, chase offered almost eight hundred

50,000 modifications to struggling to homeowners and made 172,000 permanent under hamp and other programs. chase has offered hamp trials to nearly 260,000 borrowers. of these, over 80,000 are in active trials, and 48,000 have converted to permanant modifications. hamp loans with a meaningful reduction in monthly payment perform very well. once borrowers have successfully completed the three-month trial period, they are completed faster than even we expected. we conduct extensive outreach and have made significant investments in people, technology, and infrastructure. we have developed a more creative approaches to reach borrowers in ways that work for them. we have opened 51 chase home

ownership centers in 15 states and the district of columbia where 88,000 borrowers have met with our counselors. on top of that, we've launched a national out reached fo tour. the events last four to five days, and our staff on the weekend, where we can help borrowers. the response has been very positive. half of our entire staff in chase are dedicated to helping homeowners. 700,000 deal with only loan modifications for borrowers in financial difficulty. there are several challenges of implementing hamp the. biggest challenge is that it was designed to help a specific population of borrowers. as illustrated in the department of treasury's recent report, only certain borrowers are

eligible for hamp. now that certain documentation is required up front, we expect the conversion rate to increase substantially. failure to make the required payments should be the primary reason that someone does not convert from the trial plan to a permanant modification. another challenge has been the continuing evolution of hamp. we have had to adjust our systems and we train our people as the program changes. the evolution of the program has expanded opportunities to keep people in their homes. we do not want to miss a chance to help borrowers stay in their homes, so we individual review each case, and we will extend the trial period. where borrowers are making their payments in hamp trial modifications, but may not qualify for a permanent

modification, we believe we are able to qualify those borrowers for other programs. similar to our loan origination business, chase is committed to full compliance with the letter and spirit of all their lending laws. regardless of race, national origin, religion, age, gender, or any other prohibited bias. we are pleased to have this opportunity to share our progress. we are looking forward to working with members of congress, the administration, banking regulators, and community leaders in implementing these initiatives and help stabilize communities. >> thank you very much. >> thank you for the opportunity to testify today. in discussing hamp, it's useful to recall the original goals. those were to help as many as four million financially struggling homeowners avoid foreclosure by modifying loans

to a level that is affordable for borrowers now and sustainable over the long term. second, to provide consistent loan modification guidelines, third to determine eligibility upfront. i testified last february before the subcommittee of this committee and advised that rather than avoiding four million four closures, hamp at that juncture would likely help just 250,000 home owners stay in their homes. it appears that my estimate from february was close to the mark. the success rate is so low, due to government initiatives mandating looser standards -- its this legacy of government mandates for weak loans that makes it difficult to achieve successful modifications. i expect a 40% -- i expect 40%

of permanant modifications will re-default. there are only two words to describe hamp's guidelines -- numbing complexity. at last count, there were eight hundred requirements. treasury also promised that a borrower's eligibility will be determined up front. recently in "the wall street journal" -- it has led to many crushed hopes. instead of a quick yes or no, homeowners are placed in limbo. pn february, i indicated that the january pipeline of hamp would likely yield only 250,000 holders that would avoid foreclosure under hamp, only 6% of the announced goal.

it has slowed in the last months. the number of new permanant modifications last month was 30% below april. as of may 31, 2010, there were 340,000 active permanant modifications,,assuming a 40% default rate, only 200,000 will be successful over the long term. 468,000 trial modifications -- of these, only 75,000 will become successful, long-term permanant modifications. the current pipeline will yield about 275,000 successful long- term permanant modifications, with perhaps another 100,000 successes' resulting from future trial modifications. there have been other

repercussions freed interest strategic defaults, homeowners willing to default. -- other repercussions. it encouraged strategic defaults. researchers at northwestern university found the percentage of foreclosures perceived to be strategic was 31% in march 2010. that is up dramatically from 22% in march 2009, when hamp started, with more borrowers believing that -- there's a risk that a growing number will walk away, even if they can afford the monthly payments. hamp has slowed down the foreclosure process. it is likely extending the time until the market corrects. perhaps the greatest shortcoming of hamp is that it has the world efforts of the private sector. the office of comptroller of the

currency -- the report that is produced quarterly. one chart demonstrates the private sector had been rapidly ramping up modification efforts in 2008 and 2009. when hamp started, those efforts were derailed. chart two indicates the private sector was having greater success with threducing the re- default rate on loans outside of the hamp program. chart three demonstrates the slowdown of the hamp program as new trial modifications have fallen off precipitously. now the number of permanant modifications has also started dropping 3 the committee should ask the treasury department, where are the modifications the private sector was on track to produce? this committee deserves an honest assessment as to hamp's

future. thank you. >> thank you very much. thank you all for your testimony. i guess the question is, why have there not been more permanant modifications? what is the problem? mr. das, why do think there has not been more? is t the lack of money? what is the problem? >> as we all mention, we put an enormous amount of resources to open this up to as many trial modifications as possible. we opened the door to as many people as we could. >> how long should it take for the trial modification? how long should that take? >> it takes about four months,

which happens to be the fastest in the industry. we have three trial payments. that converts to a permanant modification after that 3 to answer your question, i believe the reason the permanant modifications are not as high as expected, i believe that is because, in many cases, the documents that, and do not match with what was stated at the time of the trial modification. many borrowers are not able to make the payments. those are the two principal reasons. >> under the hamp program, 40% of the borrowers who have been in a trial modification have failed to make a payment. i think that is reflective of the ongoing stress of the economy on those borrowers. i think it is important to look at the number of permanant modifications holistic pally.

hamp is a small number of a much larger total of the 630,000 modifications. . >> we are so limited by this income tax and that in our book of business the borrower must occupy the property as their principal place of residence. and then also the documentation

issue. we initially, up front, had done all this verification and requested documents up front. so once we have got a borrower into a plan we have a very high conversion rate. but again, a lot of this is on the borrower's side as well, or the complexities of the program itself. >> i would like to add i think context is important here. think about the half a million mod's wells fargo has done. a lot of those are outside of the hamp, and a lot of them are on their way to becoming permanent. inside the hamp program, inside the 20%, the income are the same as in the report -- lack of documentation because of last summer. that has since changed. what documents are received -- customers are not eligible for

the program and go to a consolation -- a consultation -- a cancellation face. the three primary hamp factors -- i would encourage you to keep focus on the fact that the vast majority of mods getting done are happening outside the hamp program itself. >> just echoing the same thing that my compatriots here have spoken about, missed payments and no documents returned from borrowers are the major reasons modifications do not get completed. about a third of those that do get -- that do give us documents and do in fact make the payments, a third of the total population ultimately end up in a mod. >> when you say you do not get documents is a lack of communication? >> we have made extensive

refinements in our process, including communicating with our hours, writing them letters, knocking them on doors, and what have you. at the beginning of the program, then may have been the case. now, we are equipped to adequately communicate with our hours. >> this communication problem? very quickly, could you sort of tell me? "i think the issue is as to sort of analyze the contact rates it seems to us that at the late stage of delinquency a lot of customers have a very low contact rate, primarily because they may have checked out from the process. so this needs -- early intervention is really critical. >> is there anything that we need to do? there are people losing their homes. and i cannot see, if somebody is

losing his or her house, there will not cooperate with documentation. that is their house. that is the part i do not quite understand. >> a couple of examples might help. there are a lot of customers in fear of losing their home. we are doing everything we can to make sure that does not happen. documents that are troublesome -- the hamp program does require a tax return. that conjures up fears that it will trigger an irs audit. those fears are real. the hamp modification agreement itself is an intimidating- looking piece of paper. it is five pages, single spaced, and intimidating process that people are reluctant or fearful of what else might happen here. i do not think it is the communication between servers are an homeowner that is at issue. i do not think there are additional things you should and can do. this is a matter of working very

diligently and very hard with every single customer to make sure that disclosure -- that foreclosure does not happen. >> hamp has not only failed to help people. it has harmed families in two ways. one is the comments the "wall street journal" had, related to my opening statement. people were never qualified in the financial implications of going through that process. i think the point mr. pinto raised -- he thought it drilled private-sector efforts to help. i think in two ways it has not only been a failure to help but has potentially cause harm to the families we're trying to get help to come up prey -- trying to provide help to. the numbers you gave -- i have 900,000 for city, 600,000 for bank of america, 500,000 for

wells fargo, and 846,004 jpmorgan. what number of the modifications you have made our hamp modifications? i took those as being the big number? >> since 2007, we have had 900,000 homeowners. we additionally extended hamp to 150,000 homeowners, and 38,000 have taken hamp. >> 630,000 permanent modifications since 2008. 70,000 of them are hamp. >> we have reported out about 8800. we have about 16,000 currently in trial periods. >> for permanent? >> the 88 is reported out as permanent. >> 88,000? >> 8800. >> we have 500,000 mines.

38 percent of them are inside of hamp. there are probably 45,000 of those in permanent. >> less than 10%? >> to under 57,000 in hamp. >> how many are permanent? >> 47,000. a very small number. we are talking less than 10%. >> the people who qualified for hamp went through this cumbersome process, a hundred different rules and all the stuff they had to go through. i describe the intimidating profits. the small number -- how many of those -- let us as it this way. the people who qualify for hamp -- would any of those not qualify for your own modification program? >> let us put it this way. for the people that fell out of hamp, we were able to save 50%

more. >> you were able to help? and it is working? >> it is working. >> i cannot tell you the exact number, but the potential exists because of treasury incentives that have made it made more sense for the investor to be a much hamp vacation. many of those would have qualified, but i do not know the exact number. >> about two-thirds would qualify for proprietary mods. >> two-thirds of the permanent? what is the number? >> the question i believe was of the hamp participants how many would have qualified under proprietary modification programs. about two-thirds of those would have. >> of those in hamp who got into permanent status, would any of those not have been in permanent status with one of your programs? >> only those who would be

limited by investor concerns under our servicing agreement. so a very small amount. >> i think a time stamp on this is important. i think right now, with all the programs available, the majority of customers would probably get on. to the other point about customers that are canceling out of hamp, the treasury provided some statistics earlier in the week. in wells fargo's case, 70% to 80% of the hamp cancellations result in some other form of saving the home or avoiding for closure. >> most would qualify for the proprietor program. >> we have a program which promised $75 billion that would help 386,000 get into permanent, yet the vast majority would have made it in one of your own modification programs without this big government hassle. those that got kicked out -- we are also finding out the majority of them you could have

helped. >> about 60% of the hamp mods are fannie and freddie. that is the majority of it. they do not need to be paid an incentive to do what they need to do. >> a great point. >> the gentleman's time has expired. let me go out to miss spier -- she said something i agree with. hamp is fine, but my constituents -- i want to have some kind of relief. so what ever it takes to accomplish that is what we are trying to do. in my district, we hold foreclosure prevention conferences. we have done four of them so

far. we just did one of them about a week ago. as i listen to your testimony, i understand better now why we are able to save at least two-thirds of people's houses. a lot of it goes to when you talk about documents. what we found in our office -- a lot of times, it is an intimidating process with regard to these applications. we have to people on our staff. what they do almost full time is help people with foreclosure. it is a difficult -- it is not the easiest process. one of the reasons why you cannot -- it is so difficult for people to stay in the temporary phase is because they are not getting the proper documents in an are not turning in what they

are supposed to. what we have found is that a lot of times the mortgage companies are understaffed. i can tell you that for effect. it has gotten better. so when people would call in the could not get anybody on the phone. then if they got somebody on the phone they got the runaround. and then if they got somebody and were unable to avoid the runaround the paperwork got mixed up. i have seen instances where paperwork has been sent to folks going to the mortgage companies four or five times, and some of the same company sitting here now have said to my people, and i have noticed for effect, that they never got it. and we have actually sent paper work from our office. so i am wondering what you all have done with regard to staffing.

training stuff -- it is one thing to have staff. it is another thing to have a staff that is properly trained. what have you done with regard -- it seems like you are saying that in order for people to move from a temporary to permanent, it seems like paperwork is one of the main things holding them up. i think ms. desoer said some people are not making payments during the temporary stage. use of 40%? we do not find that. we find people who want to make payments. we have found a lot of people who have made payments and the mortgage company told them they did not. my staff would have the copy of a check or money order in their hand. there is a disconnect here. so the question is, outside with you, mr. heid, since i am kind of familiar with wells fargo,

what you're doing with yourself and. have you found that with significance? if you did staff up, how did it affect the operation and your results? >> i think your criticism is very fair a year ago. we were not where we should have been a year ago. we made a lot of progress in the last year. we have attended your events. retreated your events -- we created our own events together documents. our 121 approach -- every single customer will know exactly who they are working with everyone on our side knows which customers they are accountable for in a one to 1 way. we have helped over 10,000 people in the course of the last year. >> it is kind of expensive. would you rather see somebody in the house and the foreclosed upon? >> absolutely. >> why is that? >> foreclosure is the last result for a lot of reasons. one, it is the right thing to do. beyond the right thing to do, it is always in our shareholders'

interests, the community interest, customer interest to keep them in the home or find an alternative to foreclosure. everyonn sitting at the table would say to you foreclosure is absolutely the last resort. >> i sit on the conference committee for wall street reform. we had an amendment yesterday to make sure there was a fund of $3 billion to help people who have lost their jobs. every single republican voted against it. every single one of them. i heard some say earlier that enough was not being done by congress. fortunately, it passed on the house side in the conference. i see my time is up. perhaps i can get some answers to whether you all believe such a thing is very important later. >> mr. turner? >> thank you, mr. chairman. thank you for all being here.

and thank you for being so helpful in your answers, because as you know we are all struggling and trying to figure this out. you have specific expertise not only in your view of the government program but in the issue of what is happening in the market, what is happening with homeowners, and what needs to be done. i appreciate you have been so forthcoming. as i said in the opening, treasury secretary geithner, yesterday, when appearing before the congressional "this program was not designed to prevent foreclosures." it was not designed to sustain home ownership. he was then asked about the home ownership rate level. what would be a market-efficient number? someone offered 65%. he tended to agree that was an

objective. geithner said he agreed with the assessment that housing will only stabilized as more homeowners become renters again. do you guys agree with that? do you agree with our treasury secretary that the market will only stabilise as more homeowners become renters? that seems contrary to what our whole goal was in trying to stabilize homeowners in their homes. >> congressman, i am not qualified to answer the treasury secretary. in response, i would say that when we focused on hamp as an industry we wanted to create a uniform base line across the country. there was no baseline modification. there were all kinds of proprietary programs. in the last year, we have done a great deal with respect to hamp to get to a uniform baseline. however, there will be followed and there will be defaults. i think the focus needs to move

beyond modifications to foreclosure prevention. i believe those are the programs we should focus on. >> do you believe more people need to be renters? >> the hamp program and other modification programs are built to ensure that the payment is affordable. what hamp has done is set a new standard for the industry at that 31% debt-to-income ratio. in that spirit, there are a large number of people who would not qualify. and i agree that at some point if they cannot afford to sustain a mortgage payment at a level commensurate with their income than they do need to move on to alternative kinds of housing, and that is what other programs are attempting. and we are working hard to assure there is a dignified transition as an alternative to foreclosure.

>> i disagree with the treasury secretary. it is not that he is talking about the individual decision of a home owner as a borrower who find themselves in an untenable that position and must make the choice of leaving the home, rendering it, going through the process of becoming a renter. he personally believes that more homeowners should become renters, according to reuters. that seems contrary to this program. he characterizes it as this program was not designed to prevent foreclosures. i could have sworn that was what president obama said it was supposed to be. mr. friedman, what do you think? >> i was not around the secretary when he made the comment, but i do believe it is a fact that not all homeowners can afford their mortgage payments. and as a result, like many of

us, if you spent too much money on something you have to cut something else out. that could very well be what he meant. i think as a general policy of homeownership is a great thing, if people do not get greedy and can pay the mortgage and can afford all those things that go along with home ownership. >> my time is expiring. in listening to all of your testimony is about how you have been approaching homeowners i can tell you that the anecdotal stories that we hear from realtors, from nonprofits try to assist homeowners, is that loan servicers are not responsive, that it is an incredibly difficult process even when you have a social worker that is sitting and guiding someone to the process. that in fact you are making decisions that do not model the market. when their a short sales that are offered you allow it to go

to foreclosure. one thing that would be really helpful is to have not a panel of loan servicers but have loan servicers on one side of the room and of realtors and nonprofits on the other side of the room and let people go at it. we are having a different story than your telling us today. >> mr. chris image? >> thank you very much, mr. chairman. -- >> mr. kucinich? >> thank you, mr. chairman. each of you represents lenders that would not exist in their current form if not for the beneficence of the united states taxpayer. i remind each of you that without the continued support of the american taxpayer there would be virtually 0 residential housing market activity. the issue before us today is why in the world aren't you giving loan modifications to more eligible borrowers? why are you denying loan modifications to my constituents, despite the fact

that we have a federal program which pays you, the mortgage holders, an incentive to modify the terms, and compensates you from any of your costs? i would like to hear some justifications. mr. lowman? >> we are helping all of the people that come to us and that we contact. we have made extensive investments in people, systems, infrastructure, and the folks that do not get a modification. it is generally for two reasons. either they failed to pay us during the trial. or they do not qualify for the programs. maybe their income is not enough to afford a home. or they do not provide the required documents. >> let me share this with you.

at the end of may, my state of ohio had 136,000 seriously delinquent loans. only 12.95% of those loans have been modified. ohio is 42nd out of 51. in early may, i held an open meeting in my district with treasury assistant secretary alison. in that meeting, i want you to know that in cleveland ohio i learned from numerous advocates that your bank is the most difficult one to deal with when it comes to loan modifications. over and over, i have heard that chase has been especially slow to process paper work. i have heard that chase denies far worse modifications without supplying a reason. i have heard that chastely as far worse facing foreclosure in limbo. -- i have heard that chased leads to borrowers -- leaves

borrowers facing foreclosure in limbo. why is the trial modification for chase mortgages nearly 7.5 months? >> american samoa all of us have mentioned, the resource needs for this program have outstripped our ability to have the right number of people in seats performing their functions. >> so you're saying you do not have enough people to handle the program? >> we have historically not had enough people to handle the demand for the program. we were one of the first out of the box when the hamp program was announced. we started accepting applications. >> excuse me, because i have limited time. i am sorry to interrupt you. the program has been going on for 19 months. >> that is correct. we have hired thousands of

people. >> it seems to me you know the demand. your performance is very weak. if you know there is a demand and you are getting incentivized from the taxpayers i wonder how hard you are really trying. that is the concern that i have. when i get reports from my own constituents that you are denying modifications without supplying a reason in your living bars facing foreclosure in limbo your explanation does not cut it. >> the increased our staff. we have invested in our systems. we have historically had a backlog of loans that are in trial. and now we are literally looking at a loan -- at every loan that is beyond its original trial. , looking at it loan by loan, making sure we do not leave any stone unturned to give folks a modification. >> what do i tell my constituents when they tell me

chase will not work with them? >> they should call the 1-800 number. >> should i call that number? >> you should call it. >> i can call you, mr. lowman, on behalf of my constituents? >> yes. >> we can chat afterward. >> i would be happy to do it. >> i want to help you do more and better. >> we have a number i can put on the record. it is for anybody who has constituent complaints. we would be happy to personally do with them. >> i want to make sure it is not like those bumper stickers that say, "if you like my driving, call 1-800." >> thank you, mr. chairman. we have a memo that says more borrowers have been kicked out of hamp than have received permanent monday petitions -- permanent modifications.

429,000 temporary modifications out of 6300 permanent -- and of 630,000 permanent modifications have been canceled. they estimated that 75% of permanent modifications will ultimately default. i am also told that part set aside $75 billion for this program but only $30 million has been paid out in the first year and a half. in that rate it would take roughly 200 years to get all this money out, which seems to me ridiiulous that they set aside that much money for what now appears to be a failed or failing program. i just heard in response to the question from chairman jordan that only about 10% to 20% of

your loan modifications are under the hamp in the first place. we were told before the hearing -- my understanding is that has been confirmed by most of you that almost all of these modifications under hamp you would have tried to work out through your own private modification programs. so i do not believe i have ever heard of a program that is doing less or working in a worse way, just about. i am wondering. i am wondering if any of you would dispute what mr. pinto said when he estimated hamp estimated will ultimately meet only 6% to a% of its original goal. he used the words numbing

complexity. do any of you dispute that estimate, that very pessimistic estimate that he has presented here today? or would any of you dispute his description of the requirements as being numbing complexity? >> i am not sure i would use that phrase to describe hamp. i believe that we all stood beside hamp and created it together with the treasury department. we wanted to make sure we had one uniform program. we really focused on scale on that program. i think it is important for us to understand that we all collectively got behind this program and focused on scale. last year that was not the case. more importantly, we got the gses to come when the program. all of our laws and litigators had one program they had to deal with instead of nuanced

proprietary programs. i believe hamp worked when it needed to. there is a part b to that, which is that this problem is moving forward. i believe we now need to focus on fallouts from hamp. we need to focus onre- defaults. we need to focus on a targeted for closure prevention problem. i think hamp served its purpose when it did. i want to applaud my colleagues for having tried as hard as they did, along with myself, in scaling what was an important response to homeowners at the time. >> before hamp, i think one of the significant advantages has been the establishment of standards, and in particular the debt to income ratio that was

higher than the 31%. to establish that as a standard that is usable and customary, where we can work on behalf of investors, has enabled the results we have with hamp, but equally importantly the result we have in our prop. programs. that is a significant advantage. >> if it was working the way it should, your companies would stand to make a lot of money out of it and become government contractors, at least to the extent for this program. thank you very much. >> following up on that, if treasury had set it at 45%, 55%, would do not have more loans going out today? >> this gentleman has expired.

mr. lynch? >> thank you, mr. chairman. i want to think the witnesses for their willingness to come and help us. but i have to ask. in my state, we have seen the number of foreclosures double this past month -- the month of may 2010 compared to may 2009. it has gone up 120%. unlike when this housing crisis first struck, when we saw a lot of some prime mortgages out there and poor product, and maybe people in homes they could not afford -- now we see the unemployment, with people not being able to stay in their homes. i am wondering if this tool that we initially came up with, the hamp program, is the right tool to deal with that type of

problem. because if somebody is out of work and does not have a stream of income to support a mortgage it does not matter how you design it or how you modify it. if there is no income to support the mortgage is going to end up in foreclosure. i am fearful. i see how this is working out. i see the attempt to are making. i also see that 434,000 people who were kicked out of the hamp trial program because you could not verify income. what i am afraid of happening here, under part -- under tarp, which created the hamp program, which i voted against because i did not approve of the bailout for the wall street banks -- under this program, you are being paid an awful lot of money to process these attempted

modifications, these trials. but after you do all this work which you're being paid for by taxpayer money i see 434,000 people kicked out of the program. so there foreclosures were delayed for a little bit. and it allowed you to be paid for that attempt. but at the end of the day the taxpayer money is spent by your firm's because 50% of the second mortgage market is sitting at the table right there. 50% of the national second liens. so i think this is sort of insult to injury. we are spending all this money on the program. it is accruing to your benefit in a significant way. the taxpayer is being hurt.

in the homeowners are not being helped in a significant way. i understand the dynamic that is out there now. it is different because you have all those people that are unemployed. in some cases, you cannot modify that because there is nothing to support it -- no income stream. let me ask you straight up. do you think this program should be continued beyond october? we only have a few months left, here. there have been very few people helped by this program. but as the folks that are administtring this and seeing how many people are being helped and how much money is being spent here, do you think this program should be extended, october, given the fact that we still have streams and streams of foreclosures coming down the pike? mr. das? >> i believe the short answer is that this program should be continued. this program provided a great baseline and a uniform baseline.

if we did not have all of the banks participating in this program in a uniform way, there could be a lot of consumer confusion, as we saw in the beginning of last year. i will submit that this program needs to be enhanced. as you rightly pointed out, unemployment is a big issue. not being able to have a sustainable income stream to make the payments -- >> i only have a little bit of time. i only wanted to find out if you wanted the program to be continued. ms. desoer? >> we are only paid at the time of the permanent modification, not the trial. . i do believe the program should be extended to allow the new components of the second win program, the alternative short sell program, and the unemployment and principal forgiveness components should be able to play out to determine if that can help more borrowers. >> mr. friedman? >> i think it should be

continued now, especially in light that the program -- now or verifying items up front. i think that will actually help see much more positive results out of the program. >> mr. heid? >> i would add for the 80% of the mods happening outside the program there is no government payment of any kind. the program itself -- i would continue it. i would finish the enhancements already made. i would not expand it. >> it should continue. >> i would ask treasury to provide clear information, which the promised many months ago, about re-default rates. they have published virtually no information about re-defaults. the mortgage metrics report -- you need to know how this program is doing compared to the way rob occ has been tracking

modifications. >> i now yield 5 minutes to the gentleman from california, the ranking member. >> thank you, mr. chairman. i think we have both heard enough to know we need to have treasury back here well before the october end to talk about lessons learned and if there is to be any modification extension to get to it sooner rather than later. wouldn't you agree? >> we have had treasury in here. it is not something we have not done. i think there are a lot of questions that should be raised, even with people that are involved in terms of the services. i will give you a passing example and let you regain your time. i will take this off of my time some kind of way. you have people that were put into mortgages by folks that are no longer working for the bank. they are gone somewhere. now they're coming in.

what happens to them? there is a lot of things i think we need to spend time talking with the servicers and people who have experience in these things -- people probably got fired because they put people into mortgages they knew they should not have gone into. i think these are questions we need to get answered before we deal with anybody else. i did not take that off of your time. >> i think the gentleman. thank you mr. chairman for giving us this opportunity today. give me a correct pronunciation. >> des-sore >> a new level of income to that had been established. prior to that time, certainly with stated income, so-called liar loans, somebody could have 100% in come to actual income to

debt, but many people in your experience had much higher ratios -- 45% or 50% at their highest level. is that not true? >> that is correct. there were higher incomes on the origination side. >> so when we look at failures, backward looking, an artificially high ability to make a loan often to put it to government programs, freddie and fanny and so on, but allowing a much higher ratio was part of the situation. if there was any hiccup in the income or if it did not appreciate and there were not able to pull money out, ultimately there was a problem we were heading toward. now that you have the opportunity to look back at what happened in mr. chris images -- mr. kucinich's district -- isn't that right? >> the programs are intended when there is a hard come -- when there is a hardship.

we make the mortgage rates more affordable tied to that income. >> is this the number, going forward? when i was a kid, 25% would have been a stretch in many cases. what would you say the right number is to have enough cushion or normal ups and downs of income and still be able to stay in your home and meet your mortgage? >> i believe the 31% ratio is appropriate, but not for everyone. when you look at a low income house cut -- and low-income household, 31% is probably still high. we want treasury to look at lowering that for some categories of ours. we are looking at the same thing. >> that is good judgment and something i do not think is partisan here. let me ask one question to all of you. if we had known 10 years ago what we know now, and if the borrowers had known 10 years ago what they know, would you not assume that many of them would have bought less cost than they

are currently in that you were trying to keep them in? what i am really saying is -- you are trying to keep people in homes that are right on the edge of their reporting, even after you do modifications. would it not be true that if they had chosen or were able to think again, 10 years back, and buy a home at a different price range that they might be very good homeowners, although you have a hard time keeping them in the home they have? mr. das? >> based on what we now know, absolutely. that is one of the reasons we stayed away. >> yes. it is the reason bank of america exited the sub prime business in the year 2000. >> one other thing is i think back to the debt to income ratio. it is our strong opinion that you really need to look at the totality of the bar were situation. the debt to income ratio under hamp only deals with the housing

peace. it does not deal with the debt or's overall situation. other than that, i would say yes. >> i think hindsight is a wonderful thing. we are here now. the key is affordability for home owners that want to and have the willingness to stay in their homes. >> mr. pinto, i know you would say we suckered people into too expensive a home. >> yes. i would also add that the ratio that was just referred to is running 64% and has been going up. that is before food, clothing, or anything. >> knowing what we know now from 10 years ago, whether it is hamp or other loan modifications, in many cases is our real goal to keep people in a house often keeping them in a house that is bigger and more expensive, even after reductions, then it would have been right size for them to

begin with? as such, if the federal government is going to try to find affordable housing for people on the edge, income wise, if we are lucky enough to have the treasury back up here and they are looking at extending this program, is there not a component missing? hamp keeps people in the house they are in rather than evaluating whether there is a completely affordable non-renter situation that is eclipsed by the fact that they are in this house right now? i know that is beyond your purview. you're not realtors. you're not able to say, "get out of this house and get in this house," in most cases. but if there is going to be an extension, and some of you did look at this beyond october, is that not a component which is fundamentally missing? affordable housing starts not with the house you picked but with the house the was affordable. >> congressman, i believe you raise a very important and very interesting point.

i would concur with you. >> yes. >> yes. >> i think the key to a hamp and annie maude program is to make sure it is affordable now -- that the consumer can afford the home with the payment they have now. >> yes. >> i will settle for a yes. i can take up for an answer. chairman, i yield back. >> i now yield to mr. connolly of virginia five minutes. >> thank you. mr. lowman, you said if hamp modification performance has been strong, helping hundreds of thousands of homeowners. could you explain how hamp augments your other mortgage modification programs? >> we offer -- hamp is the top of the waterfall. that is the first program we offer.

it is the primary point of defense in providing a modification. if a person, for whatever reason, does not qualify for help, either it is a jungle loan or a loan that was done pass the effective date of hamp, or for some reason it has fallen out of hamp, then we use our proprietary program. >> so one augments the problem? >> yes. >> mr. heid, use that hamp facilitated the industry ability to deliver streamline solution. could you elaborate on how hamp has strengthened mortgage assistance beyond the programs offered by the private sector? >> what i meant by that is a time stamp. when you think about how and when camp was first created, it was the beginning of 2009. and that time, most loan modification programs required individual handling and

individual approval from an investor. with the creation hamp, a more systematic program was created. i think it did serve as a catalyst to get other programs going. it did serve as immobilizing event to push servicers to take broader actions at a more rapid pace. it pushed other investors, including fannie and freddie, t+ move in a direction of programmatic loan modifications. that is what i meant by the broader effect. >> it has leveraged other programs, private-sector programs. before hamp, there would have been slower, smaller, or maybe not existent. >> at the time. it's certainly sped things along. we are at a different point in time now. >> any estimate of what the number might be in terms of what falls into the category of additional refinances or mmdifications that were leverage because of hamp? >> i do not have a number for you. what i would say is that there

were definitely loan modification attempts being made throughout. it is not as though customers were not getting assistance. what happened was the idea of a hamp was a national, a systematic program. at the national programs are always useful. >> mr. pinto seemed to imply that hamp is just as place in private-sector modification programs, which seems to contradict your testimony and that of others on the panel who said hamp complement's the proprietary loan modification program which bank of america and others have developed. could you elaborate? >> it gets back to the point of which loans and which customers are eligible for hamp. as i said, of our 1.4 million customers who are delinquent 60 days or more, there are about 478,000 that are eligible for hamp. we lead with hamp.

if they fail to meet that requirement, we can offer other alternatives. for the rest of the customers in the portfolio we are doing modifications. the advantage is that hamp provided the floor or standard in terms of the debt to income ratio that we can leverage in other programs for customers who are not explicitly eligible for hamp by its definition. >> if i understand your testimony and that of mr. heid and mr lowman, it provides a framework for you to build upon and expand. >> that is correct. >> thank you. mr. chairman, i yield back. >> thank you. i now yield 5 minutes to the congresswoman from california. >> thank you, mr. chairman. well i was not in the room i was listening to the testimony. i am somewhat struck by the questioning that was offered by

mr. lynch when he asked if you wanted to see the program continue. virtually every one of you said yes. my colleagues on the other side of the aisle very much want to see the program disappear. it would be helpful to us if you can, in a narrative, provide to the committee precisely why you think the program should continue. mr. lowman, i think congressman kucinich said he had great difficulties with your particular company. and i would like to echo those. i have a number of cases here that are truly disturbing that are loans by chase. this couple -- a retired schoolteacher and her required -- her retired husband -- chase has lost four sets of applications. this is a story we have heard over and over again. documentation is sent.

documentation is lost. when the consumer sense it in four times and you cannot find it that is your problem. it reminds me a little bit of the issue with the mineral mines service. basically, if they did not permit the horizon deepwater rig within 30 days it was automatically considered approved. in that particular situation clearly that should not have been the case. but we might argue that here at some point the lender has to take responsibility for not having the documentation when it has been sent over and over again. i have to people dedicated to doing only foreclosures and modification in my office. that is a lot of stuff. every member on this panel would say the same thing. i would ask you to create a legislative liaison individual

within each of your company's that we can call. and i would like for you to contemplate that. if you are going to do it i would like you to identify who that is and present it to the committee. if you are not going to do it, i want you to explain to the committee why you will not do it. if we are really going to get to the bottom of this and keep people in their homes we have to have more accountability everywhere. mr. chairman, i really do not have a question. i just had a series of statements i wanted to make. >> and should -- it should not be an 800 number, right? i now yield to the gentleman from ohio. i am sorry. just a moment. mr. davis. i am sorry. >> i will try to be brief so that my colleague gets a chance to get his question in. studies have demonstrated and

suggested that minority communities, minority homeowners, have been disproportionately affected by the crisis. i think many people agree with that. secondly, they suggest that some of the reasons have been targeting of subprimal loans in these communities and neighborhoods and higher rates of unemployment. are your company's doing anything, as you try to do loan modifications, to take those factors into account the so that these individuals can experience modifications? >> @ citi -- at cici we have individuals dedicated to working with individuals on the ground. the office of homeowner protection sends people to the sites to work with people on the

documentation process. we also work very closely with hope now to make sure we are on the ground, working with the community. i personally go down. >> anyone else? >> at bank of america, we take a similar approach. we have dedicated teams. we did 360 community events. those tend to take place in the communities where the needs are greatest, the highest disruptions to income and that sort of thing. we intentionally supplement our out -- by letters, by telephone calls, with community events we participate in and nonprofits we help fund to host those events. >> i hope each one of the witnesses would respond to that question in writing. i will give back my time so there might be enough time. >> i think the gentleman.

also, let me ask that i would like for you to respond to ms. spiers' question in writing. we will keep the record open for additional seven days to be able to ask for that information. >> i am sorry that my colleagues on the other side up have left because i want to refresh the memory of mr. jordan from ohio. we served in the state legislature together. we did know about the problems a years ago. we did a very extensive study on sub-prime lending in the state of ohio. the democrats pushed hard for legislation that would have cracked down on it. there was predatory lending legislation. it was my republican colleagues that held that up. the hell did of four years. dissenting was happening in this very congress. stephanie jones, who since passed away, in 2002 -- in 2001

introduced predatory lending legislation that was done year after year. the voters have to understand that the reason we are here today talking about loan modifications is not just because of the economy today and the foreclosures mr. lynch described due to unemployment but because of all the poor underwriting and the securitization of the loans in the sub-prime market that could have been prevented had we addressed predatory lending legislation in congress, had we past predatory lending legislation in the states. but the republicans repeatedly stood in the wake of this. today, as the conference is meeting in financial-services that might address the underlying problems of the lack of regulation in mortgage-backed securities, in credit defaults swaps, a republican qualities -- my republican colleagues are again standing in the way and trying to prevent any systemic changes to the system that got us here in the first place.

i think it is sad that we are here today talking about all of these loan modifications because i do not think many of these should have happened in the first place. so many of them were in the sub- prime market. all i appreciate that some of the financial institutions quit writing in the sub-prime market years ago, and i will remind you that countrywide was very active and led to thousands of foreclosures in ohio, my question to you is this. i have gotten a lot of complaints back home as the look at people trying to seek modifications. the modifications, although the discussions have started, and these have not been finalized, the banks continue with foreclosure proceedings. this is sending mixed messages. while i realize treasury has sent out directors on this recently, i am concerned we are sending mixed messages to homeowners who are trying to seek modifications but are hearing from the banks that are foreclosing on their property. i would like to hear what each

of your institutions does in that case and whether we should stop the practice of proceeding on foreclosures if we are in negotiations on loan modifications so that it does not lead to the homeowners backing out because they fear their house is going into foreclosure anyway. >> let me be very clear that foreclosure is not the preferred alternative for citi. if they fall out of hamp, we immediately offer a whole range of supplemental modifications. we were able to double the number of modifications we offer. if they fail that, we offer them new programs aggressively. >> if i can interrupt you -- when you begin the discussion with the homeowner on the loan modification, do you stop the foreclosure process or do you allow it to continue until that modification is finalized? >> we stopped the process.

in fact, in our trial modification office we talk to people in foreclosure and offer the modifications. >> to stop the foreclosure process? >> yes. >> we continue the process in parallel but are in compliance with the treasury directives about how that should be handled. when a significantly enhance the communication to try to mitigate the concern of the borrower with the promise that we will not take that home to foreclosure sale while they are in the process of getting a modification. >> i am concerned. it sounds as if you are reaching out to the consumer try to reach a modification, but at the same time you are about to slap them with a foreclosure. mixed messages are being sent. would it not be better for us to back off on foreclosures? we have all said foreclosure is the last thing you want anyway. allow the modification time to work. if it does not work, proceed

with the foreclosure process. the fact that we are on this dual track is sending mixed messages. >> again, what we are trying to balance is the interests of all the constituents, including that of the investor. if that does not go through, we restore the foreclosure process. . .

we make sure that we do not foreclose on someone that is in the process. >> again, madam chair, i would remind the committee that there seems to be a broad differentiation between the financial institutions and the servicers. this is a problem for borrowers who are getting mixed messages. they're genuinely working and trying to save their homes. they fear that the bank is going to move forward anyway. there hellbent on having a foreclosure. -- they are held bent on having a foreclosure. we are sending a mixed message when we proceed with foreclosure action while, at the same time, attempting to work on a modification. i would yield back the balance of my time. >> the gentleman's time has expired. in going to ask a question

the absence of the chairman. this program -- hamp -- has been such a disappointment. perhaps our hopes were too high. to the credit of the administration, it keeps trying. here is a question about what would perhaps be the most difficult aspect of the program. treasury announced the home affordable unemployment program which provides three to six months for unemployed homeowners to seek employment. we understand that some companies have provided such forbearance to unemployed borrowers before. i'm sure that, in the normal course of downturns, for example, that was not unusual. let me ask all of you, have any

view -- any of you, and tell the extent to which you have, participated in the forbearance program? >> we launched an unemployment assistance program in march, two dozen 9, when unemployment was rising and there was no -- march, 2009, when unemployment was rising and there was no denominator. the paperwork might be more nuanced than one would have wanted. all we ask for is unemployment documentation. we made it a simple payment of $500 a month for three months. we would like to have extended it to six months. it caused issues with the four neighboring -- with the process.

it enabled people get into hamp. >> are you continuing this forbearance program? >> absolutely. we are extending it. we started it on our own. i am delighted to see that the treasury program is based on some of the attributes of what we did. >> miss desoer? >> yes, and we will actively participate in the government's program. we're looking at our own proprietary program that could extend beyond the six months in certain circumstances because of the length of unemployment for some customers. >> we have always had a forbearance for that particular reason, prior to hamp and post as well. it is for three months. i know you are considering a lumber situation. that becomes very expensive for

us as a servicer. the borrower in our situation may make payments are not, but we, the servicer, have to make the payments on behalf of the borrower to the investor. anything longer than the three- month period becomes very expensive for us. >> we talk about 100,000 such customer cases before the modification. the treasure program is very similar to what we offered before. we're in the process of converting over. we will continue to help customers that do not qualify for hamp as well. >> we have always offered forbearance to unemployed borrowers and we will participate in the treasury program. >> what? could i ask that all of you provide to the chairman the number of homeowners, beginning with the beginning of this year,

that -- to whom you have given forbearance? i would -- i understand that this, of course, is something that might have been routinely done. it was the appropriate thing to do under the circumstances. of course, the circumstances are very different because there are such high-level unemployment. i would be interested in your candid view of how successful forbearance has been in avoiding foreclosure. does it just spread the time out? what is your view, based on your own experience? does this delay in foreclosure for unemployed homeowners --

what is your view of its success or its effect? mr. das? >> i believe that the idea of delay is not as bad as it is made out to be. oftentimes, borrowers need a pause so they can focus on getting employment as opposed to keeping their home. as i have said before, the fact that factassist -- the fact that unemployment assist allow people to get into and a tentative -- into an alternative program like camp was very powerful -- hamp was very powerful. >> it depends on the customer and the length of unemployment. >> we recognize that. there is a vastly different universe out there. i am asking you a general question. >> certainly, i would believe

that temporary relief from the obligations that a customer has would enable them to more successfully bridged the economic hardship they are experiencing. -- bridge the economic hardship they're experiencing. >> i would concur. >> i agree. i think the design of the program where there is some amount of cash flow is actually better for the customer so that there is not such a huge shot a few months down the line when the income is restored. >> i also concur. new mexico of your looking for quantitative information, you may want -- >> if you are looking for quantitative information, you may want to go on line and see if they have information that tracks what you're asking about. i've not seen any. >> this is rather a perfect storm that we are having, where

unemployment meets mortgage crisis. normally, an employment does not need the kind of crisis, exacerbating the situation of people who have, all along, kept up their mortgage payments. do you have -- i recognize that you all want to do the right thing and come to some extent, you have been doing it. would you care to offer suggestions as to this relatively new program, its structure, and what might be done? for example, one of you indicated that, beyond three months. do any of you do it beyond three months? it could create issues beyond three months. >> it was i that said -- since we're not part of a bank with the deposited base, as are the

other folks around the table, because we do a lot of securitization, we do not own the loan out right. we have to make payments to the investors monthly whether the borrower makes the payment to us. >> that is not the same for the other people around the table? >> the same requirements apply. the idea of the three months allow multiple check in before you -- the purpose is to make sure you can stay current with what is going on with the customer's life. one of the prospects for them to get back to level of employment where the home is affordable? that is where the question of three months' time comes into play. >> i concur. >> the chair has asked me to recessed the hearing for about

half an hour because there was at least one member who did not get an opportunity to ask questions. do not go anywhere. the hearing is recessed. [captioning performed by national captioning institute] [captions copyright national cabll satellite corp. 2010] >> the committee will come to order and we will resume the five-minute questioning. let me begin with mr. heid. mr. heid, according to the research done by the national community reinvestment fund,

minority borrowers are less likely than others to receive trial and permanent modifications. do you believe that this is an accurate assessment? >> it is hard to answer that question. on the surface, i would say only if the home is not affordable would that be the case. there is nothing in the modification process that would cause the difference between ethnic backgrounds or anything of the sword. >> i asked the question because we know that, prior to the modification phase, african american borrowers with comparable income and other considerations were steered into subprime and predatory loans. they were disproportionately impacted by those policies.

instead of them getting a conventional mortgage, they were steered -- there is plenty of data to show that. there were disproportionately affected by being steered into these high-cost loans. i am curious as to what has happened to these minorities now who are in trouble, trying to get their loans modified. do you think they are disproportionately being affected still? >> congressman, as far as the statement on steering, i disagree. as far as the loan modification process and how that works, we have the same process. >> what do you disagree about as far as steering? what do you find disagreeable about what i said? >> you are quoting a particular study.

i believe that study does the comparison with partial information on public data. >> but the numbers speak volumes. the numbers speak volumes about how little income, upper income of african-american families were stewart -- steered into subprime and predatory loans. you can deny it if you want, but it has happened. let me say something else about wells fargo. no, quite a few of my constituents have been impacted negatively by this whole mortgage meltdown. we have gone to wells fargo. my staff in my district has asked you to modify some of these loans. we have heard every excuse, oh, we have taken to aarp -- t.r. p

-- t.a.r.p. money, so it would be inappropriate to help people. have you use that excuse? >> absolutely not. that is an absurd statement. anyone in our shop that would have made that statement -- what we're doing is this. our data speaks for the efforts we're putting forth. when you look at every customer, will get the background. -- we look at the background. every customer who has missed steps -- we find solutions other than foreclosures 2/3 of the time. the loan modification program, people doing the work, most of them over the phone, have no ethnic informations on the screen there looking at -- they are looking at, other thaa the voluntary submission of ethnicc

information. every process has a very prescribes series of steps that one goes there to gather information, get them into a long modification they can afford. that is the way the hamp program works. h the non amp programs are set up -- the non-hamp programs are set up the same way. >> i find it incredulous but you do not think african-american borrowers were steered into these high-priced loans. let me ask the rest of the panel. the you agree with mr. heid or do you think -- and do you agree with mr. heid or do you think these people were disproportionately impacted by racist policy? have you seen any evidence that people were disproportionately impacted based on their race? >> congressman, i believe you raise a very important point. i believe that in economic

downturns -- that a hardship can be disproportionate in minority communities. here is what i would say. we did not do anything that would distinguish between race, origin, sex, or any of those factors. what i would say is that i think that hamp needs to be enhanced for low to moderate income communities in a very different way than the way it has been established. my colleagues have taken a similar position. >> thank you for that response. >> miss desoer? >> thank you, congressman clay. we exited the subprime business

in the year 2000. we acquired countryside -- countrywide in 2008. we executed a settlement with our home retention program, targeted at pay options on subprime hybrid products that might haveecreated the most dressed in these economic times. we follow a very deliberate process, much of which is automated, treating equally it tends to outreach all of our customers, as well as our response to customers who are calling us because they are under financial stress. we intentionally participated in 360 community events last year. we stepped up that number even more this year. invested in the alliance for stabilizing communities -- we

have invested in the alliance or stabilizing communities. we go to communities that are the hardest hit so that we can provide in person counseling of modifications. >> so, you do -- bank of america as admitted -- has admitted that there has been steering, that you see disproportionate effects? i believe in the old a -- -- old adage, figures do not lie, but liars sure can figure. this is a good example of that. this segment of the population was disproportionately impacted because of the actions of the banking community. because you do have a human

factor involved here. you do have long officers that look at customers. -- loan officers that look at customers differently based on their skin color. for people to deny that -- i'd think that is wrong. the american people can see through that. mr. friedman? >> fortunately, we did not originate any loans, so i am out of touch on that particular subject. i do believe we, like bank of america and others, do go to a lot of outreach programs. a good health to the community would possibly bring down the debt to income test even lower than 31% under hamp. if there was some type of injustice done, maybe that could help more people. that is just a suggestion.

>> have any of your institutions created programs that target at- risk groups like racial minorities who have been adversely impacted? >> i do not know why you could not do such a program. we do not originate, so i cannot really comment on that. >> any comments? >> at chase, with a culture of their lending and have always had that culture -- we have a culture of fairer lending -- fair lending and we have always had that culture. our findings are not congruent with the findings you mention. we've done over 700 outreach events throughout the country. we have 51 homeownership centers throughout the country in the

most troubled neighborhoods, where we continue to do our outreach. we are really able to serve the underserved. >> the facts speak for themselves. you go to a predominantly african-american neighborhood. every third house is foreclosed. does that not stand out and say something to you? perhaps those communities had been targeted? ok. >> i cannot speak to those facts. >> anything to add? >> not being a lender, i have no information to add. >> as an observer? >> as an observer, and i think blame is on both sides of the aisle. lenders in fannie and freddie in

1991 at a very sound underwriting principles. those underwriting principles were complained principlesby community groups. they went to congress in 1991 -- those underwriting principles were complained about by community groups. it went to congress in 1991. lenders want to the most conservative standard and less than the and freddie become aggressive in convincing them to change their underwriting efforts. that was before the u.s. senate banking -- housing and urban affairs committee in 1991. in 1992, the federal housing enterprises safety and soundness act make that request -- made that request and the law of the land. the underwriting standards of the country changed step by step by step. we went from having down payments on loans to having no down payments on loans. it was the result of a policy that congress put in place --

bipartisan policy that congress put in place. that is my view of where it started. >> that was not totally the reasoning for this housing collapse. fannie and freddie are the only ones to blame, not the people who made money off of these loans and these high-cost loans? we do not just stop with fannie and freddie, do we? >> we want to break the lenders view of having conservative underwriting. the only way to do that was to get fannie and freddie to ssart having flexible underwriting, which they did, starting in 1993. it was a progression that occurred over 15 years. another is enough blame to go around. we should probably look at what the appraisers did. >> do not get me started on appraisers. >> thank you all of you for your responses. this concludes this hearing.

without reserving the right to object, the record shops left open for seven days so the members may submit information for the record. without objection, i will enter this binder of hearing documents and statements submitted by the interested parties for the committee record to the committee stands adjourned. [gavel] >> before heading to canada for the g-8 summit, president obama took a moment to speak about the financial regulations bill. negotiators worked through the night to craft a compromise version of the measure. the vote was along party lines to the full house and senate could vote on the bill next week. -- the vote was along party

lines. the full house and senate could vote on the bill next week. >> good morning, everybody. in a few moments, i will depart for canada to take part in a summit the g-8 and g-20 nations. this is the third g-20 summit we have held since i was sworn in as president. at our first meeting in london, with the world in the grips of the worst financial crisis of our time, we acted boldly and swiftly to bring our economy back from the brink. at our second meeting in pittsburgh, our recovery beginning to take cold, we agree to work to pursue a balanced pattern of growth and repair our financial systems. this weekend in toronto, i hope we can build on this progress by coordinating our efforts to bring economic growth and strengthen the global economy. we need to act in concert for simple reason. this crisis proved, and events

continue to affirm, that our national economies are inexplicably link. just as economic turmoil in one place can quickly spread to another, safeguards in each of our nations can help protect all nations. i am gratified we have made great progress towards enacting these safeguards here at home. it was due to the incredibly hard work chairman dog and chairman frank, and the strong leadership of chairwoman lincoln. there was also a great effort by the members of both parties who were up very late last night. we're poised to pass the toughest financial reform since those we created in the aftermath of the great depression. early this morning, the house and senate reached an agreement on a set of wall street's performance that represent 90% of what i proposed when i took up this fight. let me be clear -- our economic growth and prosperity depend on a strong, robust financial

sector. i will continue to do what i can to foster and support a dynamic private sector. we've all seen what happens when there is inadequate oversight and insufficient transparency on wall street. the reforms making their way through congress will hold wall street accountable. we need to prevent another financial crisis like the one we're still recovering from. we will put in place the toughest consumer financial protections in our history, while creating an independent agency to enforce them. through his agency, we will combine under one roof the consumer protection functions that are currently divided among half a dozen different agencies. there will now be one agency whose sole job will be to look out for you. credit-card companies will no longer be able to mislead you with pages and pages of fine print. you a longer be subject to all kinds of hidden fees and penalties for the predatory practices of unscrupulous lenders.

instead, we will make sure that credit card ompanies and mortgage companies played by the rules. wall street perform will strengthen our economy and a number of ways. it will make our system more transparent and bring the kind of complex deals that helped trigger this crisis like trades in a $600 trillion derivatives market into the light of day. we will enact the volcker rule to make sure the banks protected by the safety net of the fdic to not engage in risky trades for their own profit. we will create resolution of 40 to help wind down firms whose collapse would threaten our entire financial system.