>> 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 greatest correlation is 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. . .

>> and the homeowners are not being held in a significant way. i understand the dynamic that is out there now. it is just different. it is all these people who are unemployed and in some cases you cannot modify that because there's nothing to support it, no income strain. -- no income stream. you think this program should be wrapped up? in a few months there have been very few people helped by this program. but the folks that are administering this and are seeing how many people are being held and how much money is being spent here, do you think this program should be extended until oct. given the fact that

we still have streams and streams of foreclosures coming down the pike? >> i believe the short answer is that i believe this program should be continued as i have said before. provided a great bass line, and a uniform base line. if we did not have all of the gst's and the banks participating in a these programs there would be confusion in this past year. however, i will submit that these programs need to be enhanced. unemployment is a big issue. not being able to have a sustainable income stream to make the payment -- >> i only have a little bit of time. i just wanted to find if you wanted the program to be continued. >> yes, sir. >> we only wanted payment during the term of the modification, not during the trial timeframe. i do believe that should be extended to allow the new components of the program to

allow the short sale program as well as the unemployment and principal forgiveness components of it should be allowed to play out. >> thank you. mr. friedman? >> i think it should be continued now, especially now that you are identifying and verifying items up front. i think that will help us see much more positive results of the program. >> for about 80% of the modifications outside of the government program there is no program of any kind. i would continue the enhancement of ready-made. i would not expand it. -- the enhancements already made. i would not expand it. >> i would ask the treasury to provide very clear information

that they promised many months ago. they published virtually no information about the faults. -- the faultdefaults. you need to compare it to the way that oec has been tracking for months. >> thank you. i yield back. >> i now yield to the ranking member congressman eisa. >> i think we both have heard enough to know that we need to have treasury back here well before october to talk about lessons learned and if there is to be any modification or extension, to get to a sooner rather than later. but wouldn't you agree? >> it is not something that we have not done. i think there are a lot of questions that should be raised, even with people that are involved with the terms and services.

i will take this off of my time. even people that were put into mortgages, i mean, by folks that are probably no longer working for the bank now. they are gone somewhere. and now they're coming in. you know, what happens to them? there are a lot of things that we need to talk about with these services. people probably got fired because of the mortgages that they knew they should not have gone into. i want you to know i did not take that off your time. >> thank you, mr. chairman. thank you for giving us this opportunity today. before coming to -- before i come into this, it could be a correct pronunciation. . disor.

-- >> disor. >> prior to those loans, somebody could have 100% income to actual debt, but certainly, people in your experience had much higher ratios, 45% to 50%, relying on two incomes. is that correct? >> that is correct. there were two incomes when looking at this. >> an artificially high ability to make a loan, often to flip it to government programs, fannie and freddie and so on, but allowing this situation -- if there was any hiccup in the income or if it depreciated or they were not able to pull any money out, there was a problem and we were heading toward --

now that you have the ability to look back. in the case of mr. kucinich and it was 2006, but other programs -- other districts it was a little bit later. >> yes, we made the mortgage payment more affordable tied to that income. >> 38%, is this the right number of going forward? when i was a kid it was lower. 25% would have been a stretch in many cases. what is the right number to not have a push with normal ups and downs of income and still be able to meet your mortgage? >> i believe a 31% ratio is acceptable, but not for everyone. with certain comes it is still high. we have been allowing this with borrowers on a proprietary basis. >> i think that is good judgment. let me ask one question to all

of you. if we had known 10 years ago what we know now, if the borrowers had known 10 years ago what we know now, wouldn') you assume that many of them would have bought less house than they are currently in that you are trying to keep them in? what i'm trying to say is you are trying to keep people in the homes that are right on the edge of their 1-- of their ability to afford. wouldn't it be true that they might be very good homeowners, but they might be having a hard time staying in the home that they have? >> based on what it -- what we know now, absolutely. that is one of the reasons we stayed away from [unintelligible] >> yes, it is the reason

bankamerica and -- exited the subprime business in 2000. >> in the debt to income ratio is our strong opinion that you need to look at the totality of the bar or's situation. the debt to income ratio -- the bar werborrowers situation. >> hindsight is a wonderful thing. the key is that we are here right now and the key is a achieving the affordability for those who want to and have the willingness to stay in their home. >> i know you would say that we separate people into too expensive of a home. >> yes, yes. i would also say that the total debt ratio is actually 64%, and that is going up. that is before food, clothing, anything. knowing what we know now from 10 years ago, where there is hamp

or some of the loan modifications, in many cases isn't our real goal of keeping people in a house often keeping them in a house that is bigger and more expensive even after reductions than it would have been right size for them to begin with? as such, if the federal government is going to be trying to find affordable housing for people on the edge income-wise, if we're lucky enough to have the treasury back up here and they're looking at extending component missing from hamp? that is, it keeps people in whether or not there is a fact that there is a completely affordable non-renter situation eclipsed by the fact there in this house right now. i know you are not able to say, get out of this house and get in this house in most cases, but isn't that something where we are bringing treasury up if there is going to be an extension?

isn't that an -- a component, which is that before what housing starts will not with the house you pick, but with the house that is affordable? >> i believe you raise a very important and very interesting point. i can go with you. >> yes. >> yes. >> yeah, i think the key to hamp and any modification program is to make sure that it is affordable now. >> yes. >> ok, i will set -- settle for a yes. i yield back. >> i now yield to mr. connolly. >> thank you, mr. chairman. mr. logan, you said that despite some reports to the contrary, hamp modification has been strong, helping thousands of homeowners. can you explain how hamp

augments your modification programs? >> hamp is top of the waterfall. it is the first program that we offer. it is the primary and first point of defense in providing modification. if a person, for whatever reason, does not qualify for hamp -- either it is a jumbo loan or it is effective past the date that we did hamp or some reason it has fallen out of hamp, then we use a proprietary program. >> so, one complements the other? >> yes. >> you stated that this has facilitated the ability to streamline solutions more than ever before. can you outline how hamp has

done this? >> when you think about how when hamp was first created, i believe it was 2009, at that time it was individual handling and approval from an investor . with the creation of hamp, i think it did serve as a bit of a mobilizing event to push servicers to take a broader actions at a more rapid pace. i think it pushed investors, including fannie and freddie, to move directly into home loan modifications. that is what i meant by saying there was a broader effect of it. >> so, in a leveraged private- sector programs, but they may be would have been smaller or maybe non existent. >> we are at a different point

in time right now. >> any estimate as to what the member would be -- the number would be that falls in the category of additional modifications or leverage because of hamp? >> i do not have numbers, but i would say there were loan modifications being made throughout. i think national standards, national programs are always useful. >> thank you. mr. tinto seemed to imply that hamp is just displacing modification programs, which seems to contradict your testimony and that of others in the panel that said hamp complement's other loans. could you elaborate? >> it gets back to the point of which loans held which

customers. there are 478,000 veterans eligible for hamp. we leave a waterfall of options and if they failed to meet the requirements, there are other alternatives. for the rest of the portfolio we are doing modifications, but again, for hamp we are doing the modification in terms of the debt to income ratio for customers who are not explicitly eligible for hamp by its definition. >> i understand. in the private sector did actually provides a framework for you to build upon and expand. >> that is correct. >> thank you. mr. chairman, i yield back. >> i now yield five minutes to

the congresswoman from california, ms. speer. >> thank you, mr. chairman. while i was not in the room i was listening to the testimony and i am somewhat struck by the questioning that was offered by mr. lynch when he asked if he wanted to see the program continue and virtually every one of you said yes. although, my colleagues on the other side of the aisle very much want to see the program does appear. it would be helpful to us if you can -- see the program disappear. it would be helpful to us if you can in the narrative tell us why you think it should continue. mr. losmalowman, i think congren kucinich, said he had difficulties with your particular company. i would like to echo those. i have a number of cases that are truly disturbing that are loans by chase.

this couple, retired schoolteacher, retired husband, chase has lost four sets of applications. this is a story we hear over and over again were documentation is sent, documentation is lost.. when a consumer sends it in four times, documentations that they send in four times and you cannot find it, that is your problem. it reminds me of the issue with the mineral mines service. basically, if they did not permit the horizon deep water rate within three days it was automatically considered -- the deep water rig within three days it was automatically considered approved. now, that it should not be the case, but at some point the lender has to take your responsibility for not having the documentation when it has been sent over and over again. i have two people dedicated to

not only doing foreclosures and modifications in my office. that is a lot of staff. i bet every member on my panel would say the same thing. i would ask you to create a legislative liaison individual with in each of your companies that we can call and i would like for you to contemplate that. if you are going to do it, i would like for you to identify who is and present that to the committee. if you are not going to do that, i want you to explain to the committee why you will not do that. if we're going to get to the bottom of this and keep people in their homes we have to have more accountability everywhere. i guess, mr. chairman, i really do not have a question. i just have a series of statements i wanted to make. >> and they should not have the 800 number, right? [laughter] thank you. i now yield to the gentleman --

just a moment. my staff is saying it is ms. norton? mr. davis, ok, i'm sorry. >> i will try to be brief so my colleague has a chance to get his question in. it has been suggested that minority homeowners have been disproportionately affected by the crisis. and i think many people agree with that. secondly, they suggest that some of the reasons have been targeting of subprime loans in these communities and neighborhoods, and of course, higher rates of employment. are your company's doing anything as you try to do -- are your company'ies doing anythings you try to help these individuals to look at this when

doing loan modifications? >> yes, we have individuals dedicated to working with communities on the ground and we of the office of homeland protection. we actually have the same people to work with communities and help people with the documentation process. as i said in my testimony, we also got very close -- work very closely with hope now. i personally go down and -- >> anyone else? >> at bank of america we take a similar approach where we have dedicated teams. the we did 360 community events. those tend to take place where there is the greatest need and the highest disruptions of income. we have supplementary letters, telephone calls and community events that we participate in and nonprofits that we fund to

host those events. >> mr. chairman, i would ask that each of those witnesses respond to that question in writing and i yield back my time so that there may be enough time. >> thank you. also, i would like for you to respond to ms. spears question as well in writing. we will leave the record open for an additional seven days to be able to ascertain that information. the gentleman from ohio. >> thank you, mr. chairman. i'm sorry that my colleagues from the other side have left because i wanted to refresh the memory, especially mr. jordan from ohio, because we serve in the state legislature in ohio together and we did know about the problems eight years ago because we did an extensive study on subprime lending in the state of ohio and the democrats pushed hard for legislation that would have cracked down on

subprime lending. it was predatory lending and it was my republican colleagues that held that up and they held it up for years. it is the same thing in the congress. stephanie tubbs jones, u.s. since passed away, in 2001 introduced predatory -- who has since passed away, in 2001 introduced predatory lending legislation. for years and years -- and the reason that we are here today talking about loan modifications is not just because of the economy today and the foreclosures due to unemployment, but because of all of the poor underwriting and the securitization of the loans in the subprime market that could have been prevented had we addressed predatory lending legislation in the congress and in the states. but the republicans repeatedly stood in the way of that. and now today, as the conference is meeting in financial services that might address the

underlying problems with lack of regulation and mortgage-backed securities and credit defaults wops, my republican colleagues are again standing in the way and trying to -- but the fault swaps, republican colleagues are again standing in the way and trying to prevent this. i do not think many of these loans should have happened in the first place because so many of them were in the subprime market. and i appreciate that some of the financial institutions quick writing in the subprime market years ago -- quit writing in the separate market years ago. those that were very active lead to thousands of foreclosures in the state of ohio. i have gotten a lot of complaints as we look at people who are trying to seek modifications. although the discussions have started, and these have not been finalized, these modifications, the banks continue to proceed with foreclosure proceedings. they are sending mixed messages.

i realize treasury has sent out some directives on this recently. but i'm very concerned about sending mixed messages to homeowners who are trying to seek modifications and of the same time sending out letters to the bank of their foreclosing on their property. i wonder if we should stop the practice of the foreclosure if we are in the process of loan modification negotiations 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 the last and least alternative for somebody. when you offer somebodya hamsomp modification, and it if -- and if they fail about, we are for them -- if they failed that, we

offer them other solutions. >> what i'm getting at is when you enter the discussion of loan modification, you stop the foreclosure process? or do you allow it to continue until the process is finalized? >> we stop the process. we stop the people better in foreclosure and offer them trowel modification. >> as soon as modification is offered you stop the foreclosure process? >> yes. >> we continue the process but we are in compliance with the treasury directed about how that should be handled and we have communication to try to mitigate the concern with the promise that we will not take that home to foreclosure while we are in the process of loan modification. >> i have got a concern because it sounds as if you are reaching out to the consumer, trying to work on a modification. but at the same time the hand that is reaching out, you are

about to slap it with foreclosure. mixed messages are being sent. wouldn't it be better to back off on the foreclosure since foreclosure is the last thing that you want any way? allow the modification time to work. if it does not work, go ahead and proceed with the foreclosure process. but this is a dual track is very much sending mixed messages. >> we are trying to balance is the interest of all of the constituents, including that of the industrial -- investor. if that does not go through, to restart the foreclosure process is a very lengthy time frame. we are in communication and compliance with the treasury guidance. >> our process is much the same as bank of america's. >> i believe, for the customer working with us we stop the

foreclosure process. the other control we have in place is before the completion of foreclosure, we've looked to see that every opportunity has been exhausted. >> we have a similar process. the we do two quality checks -- we do two quality checks before foreclosure and before the sale to be sure that we do not foreclose on someone that is in the process. >> there seems to be a broad differentiation amongst the financial institutions and the servicers in this case, and it really is a problem " -- for the bars where getting mixed messages -- for these projects -- for the scrounge youborrowere getting mixed messages. i think we are sending a very mixed message when we are proceeding with foreclosure actions while at the same time

attempting to work on the modification. i would just leave it at that and yield back the balance of my time. >> the gentleman's time has expired. i'm going to ask a question in the absence of the chairman. this program, hamp, has been such a disappointment. perhaps we had our hopes to buy. to the credit of the administration, -- perhaps we had our hopes to hidgh. to the credit of the administration, perhaps the most difficult part of the program, when treasury announced the home and affordable employment program, that provides three to six months forbearance while they seek employment. we understand sun companies have

provided such forbearance -- some companies have provided such forbearance to unemployed borrowers in the normal course of the downturn, for example, that was not unusual. let me ask all of you, have any of you -- and tell me to the extent to which any of you have participated in the forbearance program. beginning with you, mr. joyce. >> we launched an unemployment assistance program in march of 2009 when unemployment was rising and they wanted a denominated and calculated debt to income ratios. but we kept it simple. we split the treasury's program, but i believe that the paper might have been a little bit more nuanced than one might have wanted. all we ask for was proof of unemployment, a document, and we made it a simple payment of $500

per month for three months. we would have liked to have extended it to six months. what it did is a pause of the wolf foreclosure process. it enabled people to get into hamp, which was a very powerful outcome for the program. >> was this on your own? >> this was on our own. >> and are you continuing it with this 326 month forbearance? >> absolutely. we are extending -- with this 3 to 6 month forbearance? >> absolutely. we are extending it to the new treasury program. >> we will activate -- actively participate in the government's program and we are looking at  proprietary pt could extend beyond the six month under certain circumstances because of unemployment programs.

>> we have always had forbearance for that to give a reason prior to hamp and post- hamp as well. i know we are considering a longridge situation and that becomes very expensive for us -- a longer situation and that becomes a barracks offensive situation for us -- becomes a very expensive situation for us. anything longer than a three month time frame becomes a very expensive for us. >> we have done about 100,000 such customer cases before. the -- before the hamp modification was changed. the treasury process was very similar to what we were offering before and we will continue to help customers that do not qualify for hamp as well. >> we have always provided for grants to qualified borrowers

and we will under the treasury program as well. >> can i ask that all of you provide to the chairman the number of homeowners, beginning with the beginning of this year to #those in forbearance -- to number those in forbearance. i understand this is something that might have been done before you have a customer -- it was the appropriate thing to do under the circumstances. of course those circumstances are high levels of unemployment. i am 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? of whether this delay and foreclosure for an unemployment -- an unemployed homeowner, whether it's viewed as a success or what is it affect -- its affect? >> the idea of delay is not as bad as it is made out to be. oftentimes, burborrowers need a process so they can focus on getting employment as opposed to also keep in their house at the same time. and i have said before, the fact that unemployment assistance allowed people to get into a very powerful program michael hamp, that needs to be -- very powerful program like hamp, that

needs to be noted. >> there is a vastly different universe out there, but i'm asking 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, yes. >> i would concur with her statement as well. >> i agree. and i think the design of the program where there is some amount of cash flow every month is better for the customers are there is not a huge shock three or four months down the line when income is restored. >> i concur also. >> if you're looking for quantitative information, you might want to go to the occ, the

ocs or a company that tracks mortgage data. >> this is rather a perfect storm where unemployment rates mortgage crisis. morgan -- normally, the unemployment does not meet that kind of crisis and exacerbating the situation of people who all along have kept up their mortgage payments. do you have -- i recognize that you all want to do the right thing and to some extent you have been doing it. would you hear other suggestions as to developments in the program, as to its structure and what might be done? for example, one of you indicated beyond three months.

and i've seen you do it beyond three months ended creative issues. >> it was i that said that. -- and it created issues. >> it was our debts of that. -- it was i that said that. we have folks that creatively sit around a table. we, because we do a lot of securitization, we do not own the blown out right and we have to -- we do not own bolon out right and we have to make payments to investors -- we do not own the loan out right and we have to make payments to investors. >> i think that allows multiple three-month check in. the purpose of that is to stay current on what is going on in the customer's life, what are the prospects to get back to where the home is affordable.

that is where the three-month extension comes into play. >> i would concur with that. >> the chair has asked me to recessed the hearing -- 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. this hearing is recessed. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> the committee will come to order and we will resume the five-minute questioning. let me begin. -- let me begin with mr. hyde. mr. hyde, according to the

research done by the national community reinvestment fund, minority borrowers are less likely than other borrowers to receive trial and permanent modifications. do you believe that this is an accurate assessment? >> it is hard to answer the 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 a difference between ethnic backgrounds or anything of this sort. >> i asked the question because we know that prior to the modification faiz, the african american borrowers -- prior to the modification phase, the african-american borrowers were steered to the subprime and

predatory loans. they were disproportionately impacted by those practices. there is plenty of data to show that. since they were disproportionately affected by being steered into these high- cost loans, i am curious as to what is happening to these minority borrowers now who are in trouble and trying to get their loans modified. do you think that they are being disproportionately affected still? >> congressman, as far as the statement on this hearing, i disagree. as far as the loan modification process and how that works, we have the same process for -- >> what do you disagree about as far as steering? what do you find disagreeable about what i said?

>> you are quoting a particular study and i believe that study does a comparison of information, of partial information to get that data. >> but the numbers speak volumes about how out middle income, upper-income african american families were steered into subprime and predatory loans. you can sit here and deny it if you want, but it has happened. and let me say something else about wells fargo. quite a few of my constituents have been impacted negatively by this whole mortgage meltdown. we have gone to wells fargo. my staff back in my district, asking you to modify some of these loans and we have heard

every excuse, like a we have taken t.a.r.p. money ended would be inappropriate for us to try to help these people. what do you say about that? have you use that excuse that because you are a recipient of t.a.r.p. that you cannot help these american stay in their homes? >> that is an absurd statement. our data speaks for the efforts we are putting forth. when you look at every customer, in respect of ethnic background -- regardless of ethnic background, every customer has two or more payments behind and two-thirds of the time they have the process of foreclosure. the person they're dealing with on the phone have no ethic information on the screens. there's one exception, the hamp

program provides voluntary information to that effect. but there is a series of steps one goes through to get them into billone modification they can afford. that is -- into a loan modification they can afford. that is the with hanmp program works as well as others. >> i find it incredulous that you do not think african- americans were steered into these high-priced loans. let me ask the rest of the panel, do you agree with mr. hyde, or do you think these people are disproportionately impacted by a racist policy? have you seen any evidence that people were disproportionately impacted based on their race? >> i believe you raise a very important point.

and i believe that economic downturns, the merger can be disproportionate in the ethnic -- the hardship can be disproportionate in the ethnic communities. let me say this. we do not do anything that would distinguish between reyes, origin, sex -- race, origin, sex, or any of those factors. but i would say that i think that hamp needs to be enhanced for those communities in a very different way than the way it has been established. and i believe some of my colleagues have taken a similar position. >> thank you for that response. >> bank of america did not -- we

exited the subprime business in 2000 and acquired countrywide in 2008. shorabak after the acquisition we entered into a settlement with 44 -- shortly after the acquisition into into a settlement with 44 states that would target hybrid arms, products that might have created the most stress in these economic times for borrowers. and the process, much of which is automated, they are treated equally. there are attempts to reach out to all lavar customers as well as -- to all of our customers as well as those that are calling us. we participated in 360 community events last year and we have stepped up at that number even more this year.

disproportionately, we go to and purses paid in events where communities are the hardest hit -- participate in the event where communities are the hardest hit. >> and so, you do -- bank of america has admitted that there has been steering, that you see disproportionate affects to that. you know, i believe in the adage that figures don't lie, but liars sure can figure. and 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 loan officers that look at customers at differently based on their skin color. that is all i am saying. but when you people come here and denied that, i think is wrong and the american people can see through that. >> fortunately, we did not originate in the loans -- any loans. personally, i am a little out of touch on that particular subject, but i do believe that we, like bank of america and others, to go to a lot of outreach programs. i think a good health for the community would possibly bring down -- a good health for the community would possibly to bring down the debt to income even lower than 31% under hamp.

if there was some type of injustice done, maybe it could help more people. that is just a suggestion. >> have the of your institutions created programs that target particularly at risk groups like racial minorities, and that have been adversely impacted? >> i do not know why you could not do such a program. >> voluntarily. >> we do not originate, so i cannot comment on that. >> any comments? >> i would just add that at chase, we have a culture of fair lending and we have always had a culture of fair lending. we have done our own analysis based on the report that you have referred to in the crc study and our findings were not congruent with their findings. we have done over 70 of reach the events throughout the

country. we have 51 home ownership centers throughout the country in the most troubled of neighborhoods, where we continue to do outreach, and i think we are able to serve the underserved. >> look, the facts speak for themselves. you go to a predominantly african-american neighborhood where every third house is foreclosed, i mean, doesn't that stand out and say something to you? perhaps those communities have been targeted? >> i cannot speak to the facts. i cannot speak to it. ko>> not being inlander, i reay have no information to add. >> -- not being a lender, i really have no information to add. >> just as an observer.

>> as an observer, blame is being placed on both sides of the aisle. and fannie and freddie back in 1941 had a very sound underwriting principles. those underwriting principles were complained about by community groups. they went to congress in 1991 and petitioned congress to change that. what they said was that lenders respond to the most conservative standards and of less fannie and freddie become aggressive in convincing their efforts to expand their narrow underwriting, change their underwriting -- and that was before the housing and urban affairs committee in 1991. in 1992, the federal housing enterprises safety and soundness made that question the law of the land and from that point on, the under look -- underwriting standards in this country changed step by step by step. eventually we went from having

down payments on loans to having no down payments on loans. it was a result of a policy that congress put in place, a bipartisan policy that congress put in place. that is where it started and that is my view. >> but that was not totally the reasoning for this housing collapse. just fannie and freddie are to blame? not the people that every step of the way made money off of these loans and these high-cost loans? we do not just stop with fannie and freddie, and do we? >> remember what they were asking for. what we want to break the lenders view and the only way to do that was to get fannie and freddie to start having at flexible underwriting, which it is starting in 1993. and it just progressed. it was a progression that occurred over 15 years. >> and like you said, there is enough blame to go around. we should probably look at what the appraiser did, too. >> do not get me started on

appraisers. >> ok, i thank you for your response. at this point, that concludes this hearing. without resort -- without preserving the right to object, the record will remain open for seven days so that members can submit information for the record. finally without objection, i will enter these documents and statements for the committee record and the committee stands adjourned. >> coming up on c-span, president obama comments on the financial regulations buiill and the senate conference were that bill was crafted. >> onta marra "washington journal" economist colin bradford on-20 summit currently

underway in canada. -- on the g-20 summit currently underway in canada. and a recent poll questions citizens from 22 nations about their attitudes toward president obama and the u.s. we will talk to richard wqike of the pew global projects -- pew global attitude project. >> starting monday, which the supreme court nominations for nominee alain decade -- elena taken. -- elena kagen. to read more on the supreme court, read the c-span's latest book. it is available in hardcover and then as an e-book. at the end of an all-night

session, a house-senate conference committee passed the financial regulation bill this morning at about 5:45 a.m. at the white house, president obama commented on the legislation before departing for the g-20 summit in toronto, canada. >> good morning, everybody. in a few moments, i will depart for canada to take part in the summit with the g-eight and g-20 nations. this is the third g-20 summit since i was sworn in as president. in our first meeting in london, with the world in the grips of the effort -- the worst financial crisis of our time, we

acted boldly and swiftly to bring our economy back from the brink. in our second meeting in pittsburgh, with our recovery beginning to take hold, we agreed to work to pursue a balanced pattern of global growth and repair of our financial systems. this weekend in toronto, i hope we can build on this progress by coordinating our efforts to promote economic growth, to pursue financial reform, and to strengthen the global economy. we need to act in concert for a simple reason. this crisis proved and events continue to affirm their our economies are inextricably linked. -- that our economies are inextricably linked. safeguards of the to our nation's can help protect all nations. -- of each of our nations can help protect all nations. i am proud of the work of chairman dauodd and chairman

frank and the strong work of chairman petersen and the parties who were up very late last night. we are poised to pass the toughest financial reforms since the ones we've created in the net -- in the aftermath of the great depression. it represents 90% of what i proposed when i took up this fight. now, 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 that support in the private sector. but we have all seen what happens when there is in adequate oversight and insufficient transparency -- inadequate oversight and insufficient transparency on wall street. we need to hold most redoubtable so we can help prevent another financial crisis like the one we are still -- we need to hold

wall street accountable so we can help prevent another financial crisis at when we are still recovering from. and we will create an agency that will have -- that previously had its attentions divided. now we will have one agency. credit card companies will no longer have pages of pages of fine print. you will no longer be subject to the practices of by unscrupulous lenders. instead, we will make sure that credit card companies and mortgage companies played by the world. if you will be empowered with easy to understand forms so you know what you will be agreeing to and you will have clear and concise information so that you can make the best financial decisions for you and your family. we will make our financial system more transparent by bringing the kinds of complex deals that helped trigger the

crisis, like trades in a 600 trillion dollars derivatives market. we will enact a local rule to be sure that the banks protected by the safety net of the fdic cannot engage in risky trades for their own profit. and we will help create solution for those firms whose collapse will threaten our entire financial system. and we will no longer have companies that are "too big to fail." in the last seven months we have passed the health insurance recovery act, insurance reform and financial reform and we are on the brink of passing wall street reform.

as the main forum for international economic cooperation, the g-20 is the right place to discuss these issues. over the last few days ago pecan built on our past -- i hope we can build on our past progress and strengthen our economy is in the days to come. thank you very much. >> president obama is in canada this weekend for the annual g-8 summit. world leaders of eight of the largest industrialized nations have gathered to discuss global economic and security issues. here is the summit's host, canadian prime minister stephen harper, as he welcomes participants on this first day of talks. . .

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[indistinguishable conversations] [applause] >> president obama is now in canada for the g-h and g-20 summit. you have comments at noon eastern. president obama milk -- will meet with leaders from south korea, india, and china. you can see live coverage on sunday starting at 5:00 p.m. eastern here on c-span. yesterday, house and senate members held an all-night meeting to hammer out differences in their financial regulation bills. the 20-hour session finished at about 5:40 friday morning. after the vote, senator

christopher dodd and barney frank talk to reporters about the bill. >> i asked the clerk to call the house members who are all entitled to vote on this. >> will be conforming to technical -- do we as consent for that to occur? >> the effort will be to get this bill on to the internet as the title is red, and expect a vote on tuesday. the clerk will now call the roll -- >> when will we anticipate seeing the technical amendments? >> can i ask the staff -- as we produce them, some tomorrow, i

would object to a staff member that came in here before noon tomorrow, i think. today. [applause] senate staff will be at their desks at 8:30 this morning. >> having slept there for the next couple of hours. i asked that a clear cola role on the passage of the financial reform bill. >> the chairman votes aye. ms. waters votes aye. mrs. maloeny vo-- maloney votes aye. mr. gutierrez votes aye by proxy. ms kilroy votes aye by proxy.

mr. peters votes aye. mr. peterson votes aye by proxy. mr. boswell votes aye by proxy. mr. waxman votes aye by proxy. mr. conyers votes aye by proxy. mr. burman votes aye by proxy. mr. cummings votes aye. ms. velasquez votes aye by proxy. >> the clerk will go to the republicans. >> mr. bacccus votes no. mrs. kapatow votes no.

mr. garrett votes no. mr. lucas votes no by proxy. mr. barton votes no by proxy. mr. smith votes no by proxy. mr>> madame clerk, i do have a proxy for mr. schuler. he votes aye. the clerk will report the tally. >> there are 20 ayes and 11 nays. >> i am pleased to be able to report to you that we send you the approval of the financial reform bill. >> we congratulate you on a terrific job. house members will now vote on the senate side.

the ayes will have it. [laughter] i asked the clerk to call the roll. >> mr. chairman, aye. mr. johnson, aye. mr. schumer, aye. ms. lincoln, aye. mr. leahy, aye by proxy. mr. harkin, aye by proxy. mr. shelby, no. mr. corker, no. mr. gregg, no. >> the clerk will report. >> the votes are 7 aye, 5 nay. the bill is passed.

>> i thank my colleagues, immensely. [applause] >> will the house and senate conferees in favor of passage of the bill, i declare the bill passed and the conference committee is now adjourned. [applause]

[inaudible conversations]

>> i think chairman frank and his team. we recognize the tremendous effort of the staff, representative barney frank and i worked together the last couple of years. it is a big legislative effort. we have a lot of work to do. this makes a huge difference. we thought we could get this done, but to establish a consumer protections bureau for the first time in the history of our country. stopped too big to fail, provide for the protections and see to it that we don't end up in a kind of cataclysmic event that brought our country to the brink

of financial collapse. that kind of early warning, there are other items that are included. we believe we have something that has been needed for a long time. it took a crisis to bring us to the point where we could get this job done. it is a terrible way to have to do this. we had people like barney frank leading the house effort, harry reid, nancy pelosi, it makes a huge difference for us getting the space and the opportunity to do this. it has been badly needed for a long time. we hope that there is opportunity now that our financial systems. it is a great moment. i am proud to have been here.

>> it is the most extraordinary -- in a to have the kind of pain -- you hate to have the kind of pain, but we began this work in 2007. we tried our best to work together. the things that happened, if you tend to focus, and you do understandably, on the controversy. and by definition, people that tend to forget how far we've come, the notion of an independent consumer agency, securitization risk retention requirements, widespread reform of derivatives.

obviously, it is not everything we would like, but in every area where we have touched, we have made significant advances. it is a tribute to how a democracy can work. there was a difference in this bill. last year, health care was getting all the attention. it was not as big a bill as i would like to have been able to bring out, but we are not getting public attention and people were not interested. my initial goal was a much tougher job in the sense of the 60 vote majority, it will have to be more difficult. but what happened was, the american public began to focus on this with those of you in the media, and it made an enormous difference. this is a better bill that would have been in significant ways because the american public

focused on it. we worry about big money, i worry about big money every year. it is reassuring to know that when public opinion gets engaged, it will win. we have to make sure that we have more cases. our staff is just the most extraordinary people. they put in enormous amounts of time for far less money than they could elsewhere. >> did you preserve your 60 vote majority? >> we will see what happens in the next few days. we're talking to people, but i have stayed in touch with the republicans on the senate floor who supported the bill coming out of the senate. literally daily communication with them to inform them how things are proceeding, what ideas they had, any thoughts.

i spoke chairman frank about it, here is very much aware of the interest of these members, and they were very good about it. not all of these demands you might have expected. the issues they care about, whether or not they remained in the bill, and it was a very good relationship. i can't tell you today, i have a talk with them over the coming days. my hope is that they will see a bill, a stronger bill than the one we came out of the senate with. and a bit more, because we were able to work on some of the ideas that were controversial. i want to thank the house members and chairman frank for understanding that and being supportive of many of these proposals. i feel like we're in good shape, but i will reserve judgment until i have a chance to talk. that is a good point, chairman frank has made that point, maybe not often enough.

the bill is not done yet. the president is probably on his way now to meet with the g-20. the harmonization of our rules and those in the european community, the pacific rim, it will be awfully important. in having completed this work, we can offer some leadership to the world on what needs to be done to harmonize these efforts that we talked about this evening and over the last couple of weeks. there is some strength in the hand of our president going to toronto, and we believe in the passage of this bill that we hope will occur next week. we can make that case to our fellow parliamentarians, legislative leaders, not to embrace exactly what we of done, but the principles. i think it will advance stability and predictability as well as job creation that we desperately need. >> we have only begun to see

some of that. the articles in the boston globe, i put it in my pocket, figuring we would be debating it. it says -- european seeks a bailouts. france and germany want to do the same. they want to tax their financial institutions to pay the cost of recovery, exactly what we did today. this was an wednesday pose a boston globe. the british, the conservative british government as just be thus to the punch by a few days in setting up an independent consumer protection agency. the have dissolve the financial services authority. contrary to what our republican colleagues were arguing about, they did exactly that. yes, there is a great deal of convergence. we put it in the hands of the

president, a very powerful set of tools. remember, we are trying to get other countries not to contracted their economy, to stipulate and help us with unemployment. i think we have helped the president make it very clear that he is a world leader here. and you will see continued convergence. >> are you confident in the derivatives language? some of the other folks were concerned. >> and i confident i am not going to lose any of them? of course not. there were some people who voted against it from the left. yes, i sympathize with a lot of my democratic colleagues that are very thoughtful people. i understood their concerns. the amendment as adopted does move in that direction. one of the concerns i had was what we thought was an inappropriate application of

fiduciary responsibility. we modified that. there are other things, think some, but not all. i was confident that a majority here of house members -- unfortunately, our peers in the house, the republican party is going to repeat its pattern of simply voting no on everything. >> is july 4 still the goal? >> [unintelligible] >> have a good breakfast. >> we have worn them out. [laughter] >> take care. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> starting monday, what's the confirmation hearings for supreme court nominee elena kagan on c-span, and c-span.org. read the latest book "the supreme court: candid conversations with all the justices, active and retired. available in hardcover and as an e-book. >> this is a change in personnel, but not a change in policy. general petraeus of supported and designed the a strategy that we have in place. >> learn more about the president's choice to head

afghanistan. he has been on c-span more than 40 times. you can go to the c-span video library, washington, your way. >> to find out more about the newly crafted financial regulation bill, we talked to a bloomberg news reporter. from "washington journal," this is about 40 minutes. host: joining us from our studios in new york is yalman onaran, senior writer at bloomberg news. what happened at 5:45 a.m. this morning? guest: well, i did not stay with it all to the end. i have many colleagues in washington who did stay up, unfortunately. but the congress conference committee -- senate-house conference committee, they finalll hammered out an agreement on the financial reform bill, which has been taking a while, but we are

almost to the end of it, i guess, now. host: according to this article in a "politico," this is the broadest rewrite of the nation's financial regulation since the great depression. do you agree with that? guest: i do, i think everybody agrees with this. of course, i talked to a lot of analysts and because we really, we had the big reform after the great depression, which kept the financial system pretty healthy for 40 or 50 years, and then we started deregulating and the 1980's. since then, it has really been in the other direction. this is 30 years later, the first attempts to er-regulate -- re-regulate. host: what is the volcker rule

and what was the finer -- final outcome? guest: named after paul volcker, we used to be the fed chairman in the 1970's and 1980's, who beat inflation that was the big problem in those years, that whole had several goals. one of them was to scale down a risky trading activities of banks. and the other one was to sort of stop them from running and investing in hedge funds and private equity firms, which are also riskier activities. at the end, there was a lot of compromise because that was a very contentious rule. so, a lot of this, the strength of the role has been weakened. it is still there. the restrictions on trading with their own money that the banks

could do in the past remain, and the regulators won't have as much say on what those limits might be. so it is written into law, which is the good part. the negative part that was sort of that they can compromise the a little bit, was how they can run and invest in hedge funds. it was aimed to not let them do any of that activity. now they can continue to operate hedge funds in private equity firms, and they can invest up to 3% of their capital, which is small, not too much, but it really opens up the risk that when, during the crisis, for example, bear stearns hedge fund, when they came to their aid. goldman sachs did the same. so, that danger, the reputation risk and how the big banks need

to rescue their hedge funds, that was not really fixed so there was some compromise. host: so, the volcker rule, was this contentious and opposed by the big banks? the guest: yes, it was, because the biggest bank -- j.p. morgan, goldman sachs, bank of america, all of them have huge operations of hedge funds. j.p. morgan is actually -- it operates the largest hedge fund in the world, according to some rankings. so, they would really be forced to spin off their hedge fund operations, separate them from their main businesses, sell them off. and the also have major investments in those funds and the private equity, especially their private equity. they invest heavily, along with their clients. they still have to scale those back, but it is not going to be as much as they steer it was

going to be. host: 202 is the area code if you would like to talk about the regulations deal that was reached at 540 -- 5:40 a.m. by the conference committee of the house and senate. all the democrats voted for it at all republicans voted against it. yalman onaran from bloomberg, another contentious issue was the issue of derivatives and senator blanche lincoln of arkansas had a big role. what happened? guest: senator lincoln, who faces reelection this year, at the last minute really -- this bill has been going on for about two years now starting at the house and the senate. she proposed that the derivatives operations of the big banks would be completely walled off -- it would be in the

units that would not have anything to do with it, because it insured banking institutions. -- deposit insured banking and petitions. it would mean banks would have to set up separate companies that would capitalize separately, which would increase their costs and lower their profit. the last-minute compromise -- and there was some much pushed back by banks -- and the administration was not so excited about it, either, so they kind of or siding with the banks a little bit on this. and the final compromise is still some of the derivatives activities will be put into a separate entity that the banks have to capitalize independently, but it is not everything. it is only the riskiest of the derivatives. credit default swaps, and the like. and especially credit defaults what not traded in exchanges.

the derivatives build that is going to pass hopefully -- it is not at all finalize -- is already going to force a lot of derivatives to be traded on exchanges or cleared through clearing houses. what that does is really reduce the risk because everything is -- you have to set up margins, which means you have to put up money. if the bill goes down, then that money is taken away. so, the risk would be curtailed any way. but senator lincoln's proposal would go further, and now does a little bit what she intended at the beginning, but some of it she agreed at the last minute that that would be fine and they don't have to separate all the derivatives business into separate entities. host: before we go to calls, another issue was the issue of a consumer financial protection bureau. how did that come out? caller: that one had several ups

and downs while this debate was going on in the house and senate. it came out strong and it weakened and then it got strong again. i think the final outcome is good for consumers. there will be a consumer protection bureau. it will be housed within the fed but it will be pretty independent. the systemic council that is made up of all banking regulators, including the fed and the fdic and others, will have veto power over some of its decisions. if it threatens the financial stability -- which is not an easy -- it is a high board to set. -- high bar to said. the agency will be independent and it -- another compromise was that it will not regulate the smallest banks directly. that the bank regulators will be looking at their consumer

products. but all of those -- the consumer protection bureau is coming to life. and it idea behind that one is that the subprime products, the heart of the crisis, will not be any longer allow the because a different regulator will look at how these consumers are being tricked into such products and will stop banks from doing so. so, it sounds like a good thing. host: yalman onaran from bloomberg is our guest. the topic is the deal were reached on the financial regulations bill. of the first call comes from palm coast, florida, jackie. caller: first of all, i enjoy your show.

it is really sad -- yes. first of all -- host: we are listening. go ahead, turn down the volume and go ahead with your comment. caller: i, is that it is sad. -- my comment is it is sad. it has to be more art government and less people. you have to regulate -- it has to be more government and less people. you have to regulate the banks. the deregulation of the oil company. you have to regulate them. look at the mortgages and everything that is going on. you have people going in, and know they cannot afford homes and get them and know the banks who knew they could not afford it and all the way around it a downward spiral of crooks, the american dream. host: yalman onaran, two things. re-regulation, and as jackie pointed out, does this affect mortgages and the way mortgages are handled at all?

guest: yes, it does. the consumer protection agency that we were talking about will look at how banks sell any products to the consumers, and mortgages are financial consumer products. .

guest: we bailed them out in the crisis but what to do with them going forward. will they still buy the mortgages out there. they own big majority of the mortgages that are out standing in the country. how their connection to the government is where they continue to be private, public, how they do things. that really hasn't been tackle and it's not part of the spill but i guess we're looking forward to that one next. >> randy. marietta, georgia. republican line. caller: good morning. i'm just curious about the bill and how that will play out next year when the mere o floats against the other currencies.

caller: mr. yalman onaran. randy, you want to try again? caller: yes. from what i understand fromc nbc started floating against other currencies late next year. how that - guest: you mean the amero? the new currency for the north american union. caller: we're going to move on to long island, new york. caller: i would like to ask, these banks. they are making the rules for these banks. i want to ask you, what's the rule for the consumeer?

host: when you say rules you mean the protections, george? caller: yeah. host: mr. yalman onaran? guest: that's the consumer protection agency we talked about and it's supposed to look how the banks target the consumers. so when you get a credit card and there are hidden fees in your credit card and you're not aware of them, the consumer protection agency is supposed to see that and try to protect the consumer and tell the banks, no you can't charge the fees unles onoka you tell the consumer clearly what they're getting into. similarly, with mortgages if you're getting no down payment mortgage and your interest rate jacked up after two years and you're not aware, the consumer protection agency is going to prevent the banks from selling products that the consumers don't understand. also, the financial regulation

before the packet was completed, there were several pieces of smaller legislation that passed house and the senate and were signed into law by the president that have really put down harder rules to - in credit cards and other stifts that the banks do to reach the consumer so there have been rules in this. host: including a limit on debit card fees, correct? guest: that's part of the current packet making it's way through, yes. there's going to be limits on the cards that we use. the debit cards we use to make purchases. host: next call for yalman onaran of bloomberg comes from florida. bob on the republican line. what's the name of your city? caller: home of the barefoot mailman. host: go on ahead.

caller: i saw probably back in the late 70's or early '80s and they changed fannie mae and it used to be a conservative loaning process of three per tenth and ten then 10% for the next 10,000 and 20% for the next 10,000. when they departed from that and they raised at least on the government corporations for that are owned by the federal government and they upped it from maybe, a maximum of 70 thousand on up to 125,000 and then it just kept getting worse and then what we had, we had, we allowed some of the savings and loans to invest more than 3 percent of their money into real estate and we had the savings and loan crisis. i think if we pursue a safe

conservative policy in the future for home purchases, that would be in a lot better shape and i think the building industry is a large industry throughout the united states and i think that's where the country is taking their hit on the chin and i think we need to put the people back to work and the best way to do that, i believe, is to rehas been all of these old homes that have led paint on them, through some form of government assistance and get the led out of the pipes and the lead out of the paint. host: we have a lot on the table. mr. yalman onaran, anything you want to respond to? guest: um... i mean i don't hear a question, but there is discussion about what to do with fannie mae and freddie mac as discussed earlier and there's debate whether there should be a second stimulus bill and that hasn't gone too far. depends on what the economy does in the next few months.

the practice in euro might effect the u.s. economy as well. if that happens and then i'm sure congress will start debating more closely whether or not we should have a second stimulus bill and if that, maybe some of the things the caller might mentioned might be in there who knows. >> any new taxes placed on banks or hedge funds in the compromise deal? >> i'm not so sure about that one. i think there was debate until the last minute but i didn't wait until everything was finished and when i looked at thing this morning quickly, i don't remember that part exactly but there was debate on a bank tax which the u.k. just recently passed and france and germany said they supported and u.s. was also saying they supported but didn't make it into this one.

i didn't see it this morning and i'm not so sure. host: how will the fm stocks react when the mark et opens? guest: it's very hard to know. there are some pretty harsh rules in here. nothing unexpected. new most of the rules that against that would curtail activities of the banks. they've been in discussions for months so that they were probably priced in. there have been some compromised that soften some of the restrictions. but they, we kind of markets knew those were coming as well. overall, i don't see surprises in what happened last night. it seem as long the lines of what market prices were expected but then the mark et has a brain of it's own and you never know whether it'll react negatively

or positively or not do much. >> next call from last crew sis new mexico. >> i just wanted to ask, i don't know if this pertains to credit cards or debit cards, while this in any way low tear interest rate on those kind of cards when you use them? or what do you think? host: mr. yalman onaran? guest: to low tear interest rate? i'm not so sure. the interest rate - excuse me. the interest rate is dependent on the interest rates in the country part i which is very low now, but there still is termed by different ways. does the legislation restrict the rate? >> it makes sure that they're

not - hmm... the consumer protection agency i think will look at those rates and make sure that they're not unnecessarily high. but is there something specific that will try to lower them? i don't think so. i think they're still set by if banks and you know, if interest rates go up in the next couple of years as economy improves, if the fed starts to raise interest rates, then i'm sure, credit card rates will go up and know one will try to prevent it but i think it's whether or not those interest rates, the fees charged by the banks are fair and reflect economic realities, then they are costs and they can't do just anything they want. that's the only thing i know. host: mr. yalman onaran, did you find that new york legislators were pushing for different things since a lot of financial companies are located

up in new york? guest: not that much. the biggest defender of some financial companies that emerged at the last minute was senator scott brown, who is the new messenger or massachusetts senator. he fought really hard for the state's street and a couple of custodial banks based in boston and that was related to the volcker rule. when he was doing that, i heard that some new york senators, senator gillbran was looking at the issue and sort of involved in the discussion but she wasn't really such a strong voice in the debate. so i haven't really, not that much. host: what a custodian bank? guess guess great question.

i've asked that myself after couple of times. but a kus doed ya'll bank is not the type of banking we understand typically. the commercial banks that lend out loans or not a message bank that under writes security. custodian banks keep the securities assets of mutual funds and other institutional investors like pension funds that deposit that managg our savings and that you know, they do the back office for those funds, so they really, it's not their own deposit or their own assets they hold, but the pension funds and other institutional investors. that's what they do. host: doug. republican, virginia. please go ahead. caller: guess my question was answered about fanny and freddy. why did we let them kick the can

down the road until after the election? and when are we finding out congress involvement in the housing problem. when we drill down and figure out what they did or didn't do to hurt or help the problem? host: mr. yalman onaran? guest: again, why is it being kicked down the road? i'm not so sure. again, there have been many issues to tackle and administration has chosen not to tackle that one. i think the biggest reason for that is the mortgage or housing market which has already gone down. prices have gone down is still very sensitive if you really try to dismantle fanny and freddy right now or do something differently it could spook the mortgage market more and the practice could go down more and

it could really, bring the reception or rec resession back and that's the fear on capitol hill so they have sort of been waiting for the economy to recover is my suspicion. and the second part of your question, i'm sorry, i forgot. host: housing markets kicking the can down the road is that caller said. think that's where he was going. mr. yalman onaran, he is a senior write wear bloomberg news, born in istanbul and got a masters degree at colombiaa he's been with bloomberg since about 1998, prior to that worked for theap. we have this tweet that just came in. a little off the topic but i'd love to get your response to it. too many americans think the dollar should be strong verses

other currencies because, well, strong sounds good. guest: [laughs] i didn't realize that too many americans wanted the dollar to be strong. but i mean past administrations have slow kateed a strong dollar, and i don't always understand the debate on weak verses strong dollar and high we should have one or the other. i haven't followed it that closely but weaker dollar would help boost exports and stronger dollar, probably helps us pay our debt easier. i think those are the true debates and i'm not sure. it's always something positive and negative for on both sides. hard to figure which one is better. host: another tweet if the big banks would buy back all the toxic assets it sold to freddie

and fanny they could then dismantle them. any response? guest: well, i mean, i don't think the big banks really sold all the toxic assets to fanny and freddy. they bought mortgages from all the banks in the country, including the thousands and thousands. we have 8,000 community banks as well as small mortgage lenders that are not even banks, not even regulated u like banks so it's not as simple as the big bank that's sold them toxic assets and most of the toxic mortgages and those that have gone bad in the last five years, is really started going bah bad after 2005 were not done by the big banks but by smaller institutions. the big banks help package them into securities.

mart fwaj backed securities, we call them but still it was a widespread effort. not just a handful of banks. host: pennsylvania, go ahead? caller: a couple of callsing an a woman said we need more government and regulation. it's my thought that, the government started telling these banks that they were going to start lending money to the people that couldn't afford their mortgage. what role did the clinton administration and bush followed it up also, but what role did they play in this whole mess that we're in now? i mean u, wasn't government involvement the reason why they loaned money to these people. how much has that played the down fall we've experienced? guest: it did play an important

role. you're right. democrat and republican administrations did encourage banks to lend to groups of people who perhaps couldn't afford it that way. and congress pushed for it as well. there were several pieces of legislation passed and again, both sides of the aisle were encouraging the mortgage lending. home ownership to expand to more of america. it looks good. when you know, in theory that the wonderful thing. more americans should own homes but as you said, it's riskier when people who incomes don't allow them to do that, if you lent to them, eventually it's going bad. for some years when the economy wasn't doing well and asset prices were rising. officially housing prices were rising that was okay because even if you have income that

doesn't make you help you with the payments then the rising housing price helps you refinance and you stay current with your payments but when we hit a plethora and prices started decline and the economy stopped growing, then everything came tumbling down. yes, the dpovpts and congress, that is they encouraged wider hope ownership. without realizing and paying attention to what that meant, how risky loan where is being made. they did play a role too. host: next call from mississippi for yalman onaran. john, hi. caller: how you doing? i have a comment. you know, this country has really been self destructing for a while. basically for money. for the war lords. my thing is, what does the

luminac luminachehave planed? host: republican line. carol? caller: good morning. how you guys doing this morning? yes, sir. i wondered i was watching a special that had this last year on,c nbc with house of cards that explained how every thing happened and it showed that they would take these mortgages and rate them so they could sell them over seafoods so seems like most of the bad debt where is sold overseas. we didn't hold themmed because new they were not good to begin with. the way it looked as they sold them fast as they could make them. they wouldn't keep them here and maybe that's why some of the overs is having some financial problems they're having now? guest: there's partial truth to

that. a lot of the mortgage debt was packaged into mortgage backed securities and that was sold everywhere. not just overseas but here. in investors and pension funds bought them too. that's our 401k and our retirement funds. so yes, it did contribute to the recession. not the current european crisis but when we tumbled two years ago and the u.s. economy and the financial system came to the brink of collapse. europe and asia were effected because of the banks and government and local governments holding some of the debt. the losses that are bourne by u.s. financial institutions and non-u.s. financial institutions, since the carry sis starts, are

roughly the same. the total is 1.7 trillion dollars. these are on mortgage related securities that we're talking about and it's about half of it in the u.s. and the other half is the rest of the world. ww did ship some of the toxic overseas but had enough to hurt us as well here. the current europe crisis is a different issue. it's based on their similar things. you know the spanish real estate market was over valued. the uk market was over valued and those came down and greece borrowed too much and spent money without really paying attention to it's finances, so in some ways it's similar but it's really not because of the u.s. and what we did in our housing market. now they're sort of in the second phase which is their own problem.

host: just to build off the last two callers. what internattonal provisions are included in the financial regulations deal struck at 5:40 am this morning? guest: what do you mean why i want independent? host: anything you can speak to that deals with international financial? guest: not that i can think of. well, i mean there's sort of discussion of resolution and sort of how to wind down systemically important banks and institutions and that, those are all international active stuktss so that addresses some of the issues. but there s, there are separate efforts to set up regulations for all banks globally that would be international and you know there's a committee on

banks supervision that really brings together all the regulators of european asian and u.s. together and they're discussing rules but that hasn't conclude yet. that's another addition to the rules we're trying pass here. and then there's the g20 meeting this weekend in toronto, and they have several other bank related financial related regulation topics such as compensation limits or, again, the resolution authority that some sort of international resolution authority that would tackle if an international bank went under such as when leyman bros. collapsed it had so many subsidiaries in so many countries, no one knew how to handle it. the bankruptcy court here didn't

have jurisdiction in london or tokyo. those have not been tackled. host: next call from deer park, washington. independent line. joshua? caller: good morning. i was going to take a completely different tact. i find how very nervous your guess got with international provision. we're not dealing with fractional reserve banking. some say the credit default swaps were one kwa drquadrillio. we see a collapse that might be created on purpose. i know nine people that have not paid a dollar. not paying property tax or mortgages and no one is even coming after them. our system is going to collapse. i want to ask you a personal question. can i ask you a personal

question. host: josh , go ahead. caller: does your guest have and advanced college degree and in what? host: mr. yalman onaran? guest: yes i have two masters. one in international affairs. >> any response to his points regarding mortgages and international finance that he discussed earlier? guest: he pointed a good thing i hadn't thought about which is the derivatives regulation that in the financial reform back set very international. all the derivatives and the mark set very international. it's about 600 trillion dollars of derivatives out standing an according to the bank of international settlement and the rules that u.s. is about to finalize and pass, do really

address the derivatives issue and force them to exchange and % clearing houses and forcing more capital and collateral to put up when trading them and these, the derivatives rules that we're passing are actually going to be serving as an example to the rest of the world. europeans, asian countries. they're all looking at the same type of ideas and they're probably going to follow in our footsteps to regulate derivatives in a similar way in away this does have international repercussions. host: dan, you're the last caller. go ahead. caller: yes, sir. i wanted to make a couple of quick comments. your guest had mentioned that government or congress had a lot to do with encouraging loans that were, you know, low income and i wanted to flush out more

detail on that. the - if you go look at the laws passed the last couple of details. specifically the code of regulations. title 12 you find congress passed lo laws that made 50% of their loans low income. banks tried to comply with that. in the end of 202008 when we had a tremendous failure that occured the fall of that year, we had 54 million mortgages throughout the u.s. and at that time, 26 million of those, had been made to low income families and 11 million of the 26 million were held by fannie mae and freddie mac. now, those banks tried to comply with those 50% requirements in the title 12 code of regulations and the reason they did is

congress ppt in there tremendous requirements on the banks. they currency had the authority to look at the activities to of the bank and to be able to refuse them things like expansion and putting new branchs in place. host: dan, you seem knowledgeable about this. what's your profession. caller: i'm an engineer but the banks tried to come my with those. can i make one other comment? the other thing i want you to do is put yourself in the position of the banks and say if you had all these assets sitting on your books that were poor, what would you do about? it they couldn't get rid of them so their way was to then combine them and make other assets with some good loans so they ended up putting the proverbial bad apple in the bunch and tried to sell the whole bunch.

host: mr. yalman onaran? guest: i mean he points out some of the problems that - it's correct. that's we said earlier, that congress did encourage lend together low income families. but of course, it doesn't have to be this way. you can lend to low income families as long as you stick to proper banking standards which is you look at how much they make. you look at what the value of the house they're trying buy and see if their income can help them and help them make the payments. if you stick to good lending standards. it doesn't have to blow off this way. there's always 3%. 2%. defaults, people with pay. although they thought they could. they lose jobs or their income

goes down. but they were really the banking system and not just the banking system but all the mortgage lender that were not even bank the shadow banking system that we call it. they really stopped sticking the standards that had been around for decades for. hundreds of years off good banking and that's why this all happened. congress did play a role by pushing them to make more loans but still, it >> on tomorrow's "washington journal," colin bradford on the g-8 summit currently under way. kevin taryn talks about general david betray as who has been picked to command troops in afghanistan. and recent poll question that

citizens from 22 nations about their attitudes towards president obama. we will talk to richard whike. washington journal is live at 7:00 a.m. eastern on c-span. tonight, senate leaders harry reid and mitch mcconnell talk about unemployment benefits. then a house oversight committee on preventing mortgage foreclosures. and a panel at the center of progress discusses how insurance rolls will be implemented. >> this weekend, on both tv, alex heard on the beginnings of the civil rights movement. an author writes about being held captive.

sarah alison has an inside account of rupert murdoch's purchase of the wall street journal. find the entire weekend schedule at boat tv.org. more than 35 viewers -- 35,000 viewers already have. >> c-span is now available in over 100 million homes, bringing you a direct link to public affairs. it is created by america's cable company. >> on thursday, an effort to extend the eligibility of unemployment benefits failed in the senate. here is some of the discussion on the issue before and after the vote from republican leader mitch mcconnell and majority leader harry reid. this is 50 minutes. senate will be in order. mr. mcconnell: madam president, i have indicated to our friends on the other side of the aisle i would be propounding a consent agreement. let me just make a few brief observations, and thei will do precisely that.

the majority wants to make this debate about republicans opposing something. let me just be perfectly clear. e only thing republicans have opposed in this debate are job-killing taxes and adding to the national debt. we have offered ways of paying for these programs and we have been eager to approve them. what we're not willing to do is to use worthwhile programs as an excuse to burden our children and our grandchildren with an even bigr national debt than we have already got, so the biggest reasonhe cloture vote we just had failed is because democrats simply refuse to pass a bill that doesn't add to the debt. that's the principle that we're really fighting for in this debate, and let me suggest that i can prove it. in a moment, i'll offer a one-month extension of the expired unemployment insurance benefits cobra subsidy, flood insurance program, small

business lending program and the 2009 poverty guidelines. this extension would be fully paid for using the very same stimulus funds that our friends on the other side just voted for almost unanimously. to redirect for these purposes, let me repeat that. we would pay for the extension with a democratic-approved stimulus offset. t demrats object to extending these programs using their own stimulus offset to pay for them, then they will be saying loud and clear that their commitment to deficit spending trumps their desire to help the unemployed. so let's be clear about the principle that's really at stake here. are our friends on the other si willing to extend these programs without adding to the debt? that's the real question in this debate. so, mr. president, in that regard, i would ask consent that the senate proceed to immediate consideration of h.r. 4853, that

all after the enacting clause be stricken in the mcconnell amdment -- and the mcconnell amendment at the desk be agre to, the bill as amended be read a third time as passed, that the motion be laid upon the table. mr. durbin: madam president, reserving the right to object. madam president, for eight weeks, eight weeks, senator baucus and senator reid have negotiated with the republicans in an attempt to pass this important jobs bill. they have been asked to make the package smaller, which they did. they have been asked to pay for portions of the package, which they did, and still republicans continue to filibuster and stop this bill. what the senator from kentucky wants to do would be virtually unprecedented, that we would pay for the emergency spendg for unemploymentompensatio by removing money from our jobs program, the stimulus program. so he is going to kill jobs on one side to pay for the unemployed on the other side. it makes no sense economically, and it is certainly not within the tradition of the senate, and i object.

mr. mcconnell: madam president? the presiding officer: the objection is heard. the senator from from -- the republican leader. mr. mcconnell: madam president, i would only briefly offer that the offset i just offered was one the majority just voted for. obviously, they didn't find it offensive in the context of t measure that was defeated. we'll continue to work on this in the hopes that we can pass this worthwhile measure without the presiding officer: the majority leader. mr. reid: i'd ask consent the call of the quorum be terminated. the presiding officer: without objection. mr. reid: mr. president, today there is about a million people in america who terribly disappointed with what took place here yesterday. a million people. that's a million in one category. there are hundreds and hundreds of thousands of others who are disappointed because of different things done to them yesterday as a result of the republicans not supporting legislation that was fully paid for. the statements made by republicans after this bill was rejected by them are simply

without any fact. there were efforts made to work with republicans. we cut the size of the bill. we paid even for things we'd never paid for before. and we decided to do that in an effort to get help for millions of americans. one of the things we paid for was something called fmap, which is money that we would direct to the states that they could use for police, fire, teachers, nurses, stop layoffs from taking place there. that was rejected. there are numerous editorials around the country rejecting what the republicans did yesterday, and there are headlines virtually in every newspaper in america. l.a. times: senate g.o.p. blocks extension. business week: republicans thwart bill with unemployment

aid buyout. boston globe: filibuster halts bill-boosting jobless benefits, aid to states. mcclatchy newspaper: g.o.p. blocks jobless extension. "usa today" senate bill again blocks job extension and tax breaks. those tax breaks were for middle-class americans. seattle times: republicans continue blocking a federal aid bill. the republicans in the senate have made the decision to do everything they can to turn the country upside down to, do everything they can to stop any economic recovery because they think it may help barack obama. it may help some of their people trying to run for senate seats around the country. so they figure as bad as they can make the economy, the better off they will be.

that's a pretty difficult view for people who are united states senators. the presiding officer is a senator from the state of oregon, and that is your prime responsibility, is to take care of their state. but also as a united states senator have to be concerned with what goes on in the other 49 states. that's our job, our role. that's the way we were constitutionally designated. the bill they rejected yesterday creates jobs. as the headlines say, closes corporate loopholes. the bill yesterday that was rejected by the republicans would stop jobs from being outsourced, from american companies getting tax breaks by creating jobs overseas. those jobs should be created here. that was rejected by the republicans. the bill that was before the senate was a bill that would

help small businesses grow and allow them to hire once again, to be the engine that runs our country. big businesses should not be rewarded for shipping jobs overseas when there are so many here at home desperate for a paycheck. i've read a number of these stories, mr. president. they really are heartbreaking. i read the nevada clips today, a statement from one man there, in effect saying what is going on back there? this is not a partisan game. i need money to take care of my family. i need my unemployment check. i tried to find work. i can't find work. but that had no bearing on the republicans yesterday because they, as we learned in the health care debate, want everything that obama does to be his waterloo.

everything in this bill was paid for with the exception of unemployment compensation, which is, which has always been a bipartisan recognition there is an emergency or we wouldn't be asking for unemployment benefits. the republicans were even unwilling, mr. president, to allow us to bring the bill up for debate. they wanted to stop the debate, further discussion of this bill. we could not invoke cloture to allow the debate to go forward. every republican voted against it. i was really surprised by statements of some coming to the floor afterwards and saying i was in favor of the unemployment benefits. let's be really clear about all the good things a "yes" vote enables our country to do with this legislation. it would have allowed the senate to pass this.

it could have gone to the president for signature. a "no" vote stopped us from doing things to help regular guys on the street, people who are desperate for help. think of this: an extension of a tax deduction for tuition. there are young men and women all over america today getting excited about going to school or going back to school. because of what was done by the republicans yesterday, there will be young men and women unable to go to school. they're going to have to stay out until the economy gets better while their dad gets a job or mom gets a job, because the tuition tax deduction is not going to be around. what a disappointed young group of men and women we're going to have. and as sad as it is,

mr. president, some of those kids will never go to college because of this. this legislation has allowed tax benefits for working men and women in this country, for deduction for property taxes. didn't do it yesterday. it's not available now. teachers around america would have been able to deduct with their income tax -- not much -- $250 a year to get a tax credit for the pencils and paper they buy every year. as you know, having been around teachers, as we all are, they spend lots of their own money for supplies for the kids. yesterday the republicans took that small $250-a-year deduction away from these teachers, all teachers. build america bonds, those

moneys are shrinking. there aren't as many people making application for those build america bond programs. this has been such a stimulus for our country since we passed that in the economic recovery act. and we're running out of money there. the bill would have provided provided, $4 billion, all paid for. that was rejected by the republicans. they said, no. that $4 billion would have multiplied into many more dollars because if you have a contract worth $2 million to $3 million, people can go to work, they can buy groceries and shoes and stimulates the economy. but the republicans said no to that. state and local governments are begging for money. infrastructure is down. we need to do -- water, sewer projects, street projects. but the republicans said no.

the legislation was rejected yesterday, had an extension of small business administration lending provision that's would provide low-cost loans to small business. republicans yesterday unanimous said no. the bill provided $2.5 billion for state wage assistance programs. what these programs are, mr. president, is -- started in the clinton administration. there was always talk by the republicans, and by everybody, not just the republicans, that should we do more than provide welfare to people? shouldn't we provide a way they can go to work? that's what this money is about. those programs are going to be terminated. programs that have worked so well to have people go from welfare to work. yesterday the republicans said no unanimously. let them stay on welfare.

they don't need to learn how to work. they don't need to transfer to a job. this legislation was rejected yesterday, provided -- yesterday provided tax credits for research and development. a lot of companies, especially small companies can't do research and development they need to do unless they get a tax incentive to do it well. it won't be done. this bill provided $5 billion -- all i've talked about paid for, $5 billion in new market tax credits. what this meant is that investments could be made in economically distressed areas. they exist in oregon, they exist in nevada. they're going to continue to exist without any improvement because of the rejection by the republicans yesterday. everything i've talked about creates jobs.

and to have the republicans come to the floor and say, we reject it because of the cost. it was rejected because they do not believe that middle-class america deserves a break. that all the break should go to the fat cats. right now as a result of the republicans rejecting this legislation, someone who's working for minimum wage will continue to pay more of their taxes percentagewise than warren buffett. or one of the multibillionaires on wall street. they will pay more percentage of their income than one of these very, very rich people. in this legislation we had a provision to extend the first-time home buyers tax credit so that people who already qualified can buy a home. rejected.

they even rejected a provision we had in this legislation so that someone that is called away to fight in afganistan or iraq, we had a provision in this to allow them to make up the difference of what the military pay is and the pay on their job so they won't lose their job as they've done and put tremendous burden on the spouses left at home. so yesterday one thing my friends on the other side of the aisle should be very proud of is they protected corporate interest. they did that big time. they're betting on our country to fail, mr. president. that's a sad commentary.

we're going to continue, the bill's on the floor now is to create jobs. small business jobs creation. we worked hard to get that done with senator landrieu, senator baucus, small business and finance. we'll have a vote on monday. again, it's being blocked by the republicans. blocking from us even going to it. so we'll need 60 votes monday to allow us to debate whether or not this country needs small businesses to create jobs. we should be on that bill today so people can start offering amendments and do something productive. no, what will happen on monday, they'll probably vote for it and then they will get the 30 hours to sit around and look at each other and do nothing, that's what the rules of the senate allow. so they accomplished more of their wasting time to prevent the obama administration and the rest of us from accomplishing

something good for the country. but we're going to continue to try. we have to do that in spite of the obstructionism of the republicans. would the c is treated by amer'e company.e c is treated by amer'e on thursday, the house committee heard from several bank executives about what they're doing to lower the foreclosure rate. this to our 20 minute meeting is chaired by the representative from new york. by a congressman from new york. >> the meeting will come to order. good morning. thank you forthcoming. it took massive federal event using billions of taxpayer dollars to save the bank from complete disaster. people and the financial assistance now stabilizing.

they are beginning to make money again. 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 34 1 million americans are delete went on their mortgage by 60 days or more. the economic crisis is far from over for these people. as i have said the four, to its great credit, the obama administration recognized early on that an important part of the 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 sute you for that. the home program is a central piece of the treasury department effort to carry out that objective. they had a troubled start. it appears that some significant improvements have recently been named. more than 1.2 homeowner's have now started a modification. 46,000-obtained a permanent modification. the immediate savings to the homeowners is a little over $500 per month. more than the number of

permanent modifications has doubled in he last three months. there are still major problems with hmfp. the chief complaint is a slow pace in which services are permanently modifying troubled mortgages. there is still onsiderable concern over confusion and conflicting communications from loan serices and borrowers. while more modifications are being made, your delinquent borrowers appeared to be qualified for hmfp. most importantly, many borrowers who obtain a trial modification to drop out of the program late. in fact, it appears that a majority of the mortgage modifications paid on hmfp may not be successful. -- a deeply troubled ssue found

that minority communities continued to experience significantly higher foreclosure rate then wipes regardless of their income level. this confirms moved similar findings reported by the national community investment coalition in the committees last hearing. today, i would like to hear exactly how this disparity can be address. clearly, we need to do a lot better than we have done in the pas this is not just hmfp just. we have to recognize that hmfp cannot be the only solution to the foreclosure crisis and the some of the banks appearing today have began to save homes from foreclosures through

reductions and other help for the unemployed. the sound like a good first steps. i want to hear more. i want to see broad participation the route the loan industry. foreclosures is a sing proposition for everyone involved if you analyze it. the house and debate loses a big chunk of the investment. the committee loses the family with a stake in the community. i am asking the banks to help i am asking the banks to help us find an effective way to stop the foreclosures. i want to thank our witnesses today for appearing. i look forward to your testimony. i will now yield five minutes to the committee's ranking member progressive. we will get five additional minutes on each side.

>> thank you thank you for holding today's hearing. there are recommendations for reform of the program to misrepresent the regional goals of the program. the tinkering in the housing markets have continued to feel the american people. this week, we learned the treasury has kicked for people out of the program then have received mortgage modification.

their perspective is necessary and helpful. the people respond to for the $75 billion of taxpayer money is simply a failure of oversight. i am disappointed that gao was not invited. they published a report this morning focused on the performance of mortgage services to coincide with their testimony. their perspective would have been liable for this committee. i respectfully urge you to invite the treasury department to answer in the near future. we have a responsibility to the american people to hold the

gestation accountable. what we hear from today have worked to comply a 800 rules issued in over 15 different set of guidelines. they have been able to offer far more mortgage modifications privately then in it. this congress administration has stifled private sector job creation the their anti- economic growth agenda. the policy mistakes of the felt by homeowners across the state. thank you. >> thank you. we did have a treasury. we did have jao you cannot do so much in one day.

>> i am concerned about the clans for the claims. growing number of borrowers are failing to move from the initial stage into a permanent loan modification. more than 100 our -- 100,000 borrowers lost their mortgage in may. more than have received another type of modification from their banks according to the government data. housing counselors have complained that those alternative low modifications are typically not as generous as what the government program offers. i am interested to see how it can be one of the toughest steps in the loan modification

efforts. i have held foreclosure prevention's in the district. i can tell you the key is that we have to have efficient programs. it is one thing to talk about them. it is another thing to actually carry them out. hopefully, people can help us get a better insight and how we can keep people in their homes. house is the numbers 1 investment in most instances. we need to be doing more helping people retain their homes so they can have the stability and so they can keep their families stable and neighborhood stable. with that, i yield back.

>> the gentleman yield back. i now recognize mr. -- >> could you clarify how the time is? for you saying there is five minutes over there and five minutes here? >> actually, he yielded back. you still have three minutes left on your time. now you have the entire five minutes. >> you said you'd knowledge the request by the ranking member for a representative from treasury. i can tell you that we came back. we are a hard-working committee. >> we have had treasury. >> you have not had been since monday when they had their report issued that says this program is failing. i have got some serious questions. yesterday, the treasury secretary appeared before the congressional oversight panel where he would ask a question.

dino he said? he said this program was not designed to prevent foreclosures. it was not designed to sustain the homeownership. he goes on to say what you think it to go to 65%? he said, i think you are describing the objectives that have shaped this program. the chair said, i was very surprised and very frustrated by the notion that the secretary seems to be saying that a program that helps on a tiny handful of families facing foreclosure is a successful program because the rest deserve to lose their homes.

she says i thought that was shocking. i find it shocking. i find it inconsistent with the chairman's opening statement about what this program is to do. i find it inconsistent with what the president told the american people. we have an absolute crisis. it is not over. i am from montgomery county, ohio. the rate is staggering. ohio has been the foreclosures continue to mount. clearly, this needs to be addressed not only by treasury addressing this program but also for the financial institutions and we cannot lose focus here that the financial institutions got this in this mess. the concern that i have is that decisions are being made currently that do not protect capital. every member of congress contended that the realtors tell them that it is virtually impossible to get loan servicers, banks, financial

institutions to work with the home buyer to get a short sale to do things that would avoid foreclosure. the test of the hamp program is a post reserve capital banks. it is a program that not even the bank are pursuing. when you look at the market, any time the weekend avoid foreclosure, you make more. you preserve your capital. the market sustained more. when the homeless and foreclosure, prices in the neighborhood shop. why isn't this program working? but why aren't you operating in the market standard of capital preservation? we are continuing to proceed to foreclosure at rates where we all know people are approaching the financial institution with deals and offers a serbian rejected.

they would have a higher return. >> i now recognize mr. kucinich. >> thank you very much. >> you have three minutes. >> i'm going to take one minute. we know that the state of ohio received another $172 million so that people could be counts and individuals. i am grateful for the administration. servicers have been referring borrowers to foreclosure. they have been evaluated treasury had to intervene to put a stop to that. we know that ain't of america has produced bank of america has 13% permanent modifications, jpmorgan 22%. city market, 32%.

this whole program is about keeping people in their homes. we are finding death the servicers are not stepping up in a way that can encourage more and more people. we know that people are not given understandable reasons why their home modification program is tonight, that it is sketchy as to how people appeal a deny and to have the denials reviewed before the bay street " -- foreclosure. >> your one and it is up. >> thank you. >> the gentleman from virginia.

we have to in a flood of the do we have two minutes left. >> i appreciate our friends from the aisle. we want to make sure the program is better and working. i i think it is important to remember that our friends are the same ones that stood by and allowed for no are loose regulation decorated the subprime mortgage of will and the first -- bubble in the first place. not one person -- there voted in the majority vote. when we are looking at the subject -- i will not yield. that are not succeeding success.

there are some among us of not help at all. thank you. >> the gentleman from north carolina has two minutes. >> i would just say that my colleagues on the left is quite wrong. what he is saying is not the case. we want a workable program that will actually help homeowners, not one that does not actually help homeowners. it has been an absolute failure. if we talked to folks to in our communities, they will say it is not working. i have in front and center on this issue trying to help homeowners here in washington. it is the party over there that would do nothing about fannie mae and freddie mac which added the appeal to the fire of the

subprime crisis. rather than this guy blaming bush, let's move forward. we are sick and tired of this petty politics. we want to fix this problem, not there is some money at it. we want a workable solution. i will be happy to yield back. >> the gentleman's time has expired. >> i want you to know that we are putting things in the proper context. we have the treasury department testify at our first a hearing on this issue. treasury was questioned by the committee for more than three hours on the performance of hamp that the first hearing. now it is the banks term. we are going to hear from them

today. 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 wholehearted cooperation of everybody across the board, even this committee. >> i think the american homeowners who are grieving right now do not care if it is hamp or something organized by the banks. they want some relief. it is shameful that my folly for decollate fill the need to point fingers. the one thing we need to look at the conflict of interest that exists where there is a market

and second mortgage and the servicer has an interest in the second mortgage and will not negotiate a modification with the first mortgage. that is a really serious issue. >> the first mortgage. that is a really serious issue. >> all time has now expired. in this committee policy that all witnesses raise their right hand. do you solemnly swell to tell the whole truth, the whole truth and nothing but the truth? you may be seated all witnesses entered in the affirmative. >> he is the chief executive officer of city mortgage, inc. welcome.

mr. barber is the president of bank of america home loan, which is the nation's largest home mortgage service. welcome. mr. david freeman is the president and chief a ticket offer of american home mortgage services, which is the nation's largest independent non-prime servicer. welcome. mr. david lomond is the chief executive officer of the home finance. welcome.

we are glad to have you here. at this time, i would ask the witnesses to deliver a clear statement. there is a light that comes on in screen for the medellin and green. after four minutes, it becomes caution. then it turns red. red means stop. i awnt to remind you of how it works. let's go right down the line. this allows an opportunity to raise questions. >> thank you. members of the committee, thank you for the opportunity to discuss the efforts to help families stay in their homes and describe our progress in implementing the modification program hamp. i nbc zero of citymortgage. we owe a debt of gratitude to the american taxpayer to provide

funds. it is our responsibility to help american families and help families stay in their homes provincial as one recent example, last week citi came the first major lender to announce a 90 day moratorium on foreclosures in the gulf coast region. we want to help families that have been hard hit by the devastating oil spill to remain in their homes. at citi focus on two key priorities. working hard to make the program as successful as possible and providing solutions for those who do not qualify for a fallen out of a hamp process. our focus has to deal is significant results.

we are ranked among the top performing services. since 2007, we have assisted within 900,000 families in the efforts to avoid foreclosure. we know that the hamp can be somewhat complicated. we strive to make it easier for our customers. it hired special stuffers to focus solely on day hamp process and have given details. we've added more than 1400 new employees to support our for closure prevention effort. we had invested in the hamp processing center so that hamp applicants can view their application set is in documents online. customers are notified electronically when they meet the application process. we have learned that borrowers can be reluctant to work directly with servicers. we are working on outreach.

the partnered to conduct document collection of events in face-to-face meetings with borrowers who need help. our goal is to give every distress bar where the opportunity to reaches for assistance. we have designed a procedure to insure hamp the application insure sanders for each applicant challenges remain. hamp has been revised multiple times since march 2009, which easch change required. we are moving from a truck modification to him modification. the required documents and not cemented. -- implemented. since the program does not fit every distress of our hour, and

citi is providing solutions. as part of this effort, we offer a number of supplementary modification problems that are designed to address customer needs on the case by case basis the solutions are tailored to homeowners to meet their consensus and make it affordable. the own party program assist customers to a variety of solutions such as unemployment and imminent risk of default and utilizing a variety of strategies for affordability. these 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 is a one-size-fits-all approach. the proof of this is in our -- for the borrowers who face hardship, we introduced dedicated, which offer customizable solutions we are participating in programs when they become available. these programs allow for a dignified transition to the next part of their lives. there is much more work to be done. cit remaini focus in achieving a portability but the thank you for the opportunity for them -- profitability. thank you for the opportunity. >> thank you for holding a

hearing on this very important issue. since january 2008, bank of america has completed more than six and a 30,000 loan modifications. we continue to innovate with the acquisition of countrywide, bank of america's portfolio changed dramatically. with the acquisition of countrywide in 2008, bank of america servicing portfolio change to medically but in loan type and in volume, more than tripling to nearly 14 million customer loans. we have an undertaking a massive retooling to address the needs of distressed homeowners. lasagna default management capabilities, technologies, and a 60% increase in staffing to more than 18,000.

bank of america has participate there have been a rough spots. customers have experienced tough this. we continue to learn and improve as we work with these difficult times, never losing sight of the individual. the individual or the community. since hamp launched in march of 2009, bank of america has build momentum in e 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 ovide customers a more

affordable combined monthly payment. this march, we announced a principal reduction program for qualifying customerwho 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 reducti 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. 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.

winform 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, pride 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 associates who worked on these issues every day, take