anything like that and the story is new to me, so i can't really -- yeah, i'm not even sure it makes any sense. not to me yet because i haven't read it. i'm not aware of any i am pending appointments. >> august, town hall meetings, what is the president going to do during the month of august? >> when we have a schedule we'll make the announcement. >> it's august. >> we will have scheduling announcements to make for you. >> will he be on the road? >> i'm sure we will have announcements to make and you can anticipate that just generally speaking the president will be on the road more than he has been in recent weeks. >> i was wondering if the white house or the president thinks

it's important to go out and talk about this legislation or whether we'll see him just go more on the jobs message as he did in the rose garden? will the white house try to sell what he just said? >> i think averting a crisis is an important accomplishment but it is not enough. and that's what you heard him talk about today. he will certainly talk about the need for this second stage to be serious and to take the kind of measures that are so essential to significantly deeper deficit reduction, but he will primarily focus as he always does on growing the economy and creating jobs. >> more about the chance to talking about raising the pressure and make the case for that? sounds like how he talked about the deficit reduction. >> that is a fair assessment.

you heard in what he said today, the balance between those two things going forward, both remain vitally important and they are linked going about deficit reduction in the right way will be -- is conducive to solid economic growth and laying the foundation for a better and bigger economy in the future and more jobs. but he will -- he looks forward to spending even more time now focusing on things we can do to grow the economy and create jobs in the near term. >> on revenue, section 402, subsection c of the budget -- >> wait, i don't have that here. >> subsection c talked about the expedited procedure and there is a provision that says revenue measure, shall only apply to the house of representatives if the joint committee don't receive from the senate is a revenue

measure -- shall not apply. doesn't that make it significantly harder for revenue components to emerge from that super committee? >> i haven't read that subsection. but i can assure you that there are no restrictions created in the legislation that limit in any way what the joint committee can take up. >> there's no specific targeting of revenue. >> it is left up to the committee to decide how it will approach what measures it will recommend to achieve $1.5 trillion in additional deficit reduction. >> my question is, i don't understand the difference why is terrorists inappropriate but hostage taker is not appropriate? >> i just think -- >> they have to hold themselves

up, too. >> i think in general what's important is that even in the midst of debates that we all feel very passionate about because the issues are so important that it is not helpful to the kind of productive political discourse that we need to achieve compromise, you know, to use those kind of analogies -- i mean even if they are understandable and descriptive. but this is not the seven words that you have to ban, like these words are ok and these aren't. lowering the temperature in general is a good thing. i think i have said everything i can about that. >> jay, yesterday, yesterday there was talk about the president going to have a role in the supercommittee. is it a bipartisan and bicameral thing, what's the president's role going to be and how is he going to affect the committee?

>> well, as senator mcconnell said in the last few days, one person out of 300-plus-million in america, the only one that can sign bills and make them law. he obviously has a crucial role in this process and has a crucial role in persuading members and the public about what is the right path to take and you have seen him play that role in recent weeks and months. the authority obviously rests with the leaders. but in answer to an earlier question, there is a.m. will product to provide to that committee once it is formed. and the president is the author of wanting such product and he thinks that its real framework to deal a balanced approach in dealing with entitlements and revenues. >> is there any concern without

a specific role outline there might be a limitation? >> i think he is president of the united states and i think he will have a substantial role to play as he has these past weeks and months in shaping the debate, negotiating. i mean in the end and in the beginning, middle and end, this process moved forward because of the president's leadership. the talks, in the immediate wake of his speech to george washington university, he he created an arrangement that was led by the vice president. he engaged in he engaged in rounds with the speaker of the house and he obviously was intimately involved in assuring that the compromise that was reached and signed into law today came to pass. >> [inaudible]. the prime minister is willing to negotiate along the borders.

>> i have seen those reports but i don't have any special knowledge of them and i would refer you to thinks office and the government of israel's office. our position on that is clearly articulated by the president in his speech. thanks very much. >> happy birthday to the president. >> i'll let him know. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> so, as we heard, president obama signed the debt ceiling and debt reduction bill today. just hours before the u.s. government could have defaulted on some of its financial obligations. we'll see the president's comments about the legislation tonight at 8:00 eastern. then from the capitol, sno senate democrats also talk about the debt compromise. later, a couple of briefings on job creation. first senate republican leader mitch mcconnell followed by house democratic leader nancy pelosi. this recap of the day starts in

a little less than an hour from now at 8:00 eastern here on c-span. earlier today, the senate banking committee held a hearing on whether there should be national standards for mortgage loan services. those servicers have increasingly come under fire from federal and state officials who accuse them of cutting corners when processing foreclosure paperwork. this is an hour. >> our first witness is mr. jack hopkins, a long-time friend and a person of resource for me and many south dakota community banking issues. jack is the president and c.e.o. of a community bank that serves both south dakota and minnesota. is he a executive director of the hope new now alliance.

mr. robert couch is a counsel at the farm of bradley, aren't, bull, cummings, l.l.p., and the former general consul at h.u.d. and finally we have professor peter swarr who is appearing before the committee via tell conference. he is a professor of law at the ohio state university and also a senior fellow at the center for american progress. welcome, all of you here today, and thank you for your time. mr. hopkins, you may proceed. >> thank you, chairman johnson, senator corker, members of the committee, i am jack hopkins, president and c.e.o. of core trust bank, a $660 million asset bank in south dakota. as a third generation community banker, i am pleased to represent icba's nearly 5,000 members as this important

hearing. as this committee considers the development of national mortgage servicing standards, i have an important point to make. community banks are successfully servicing their portfolios and don't have the widespread servicing problems reported in the press. i urge you to ensure any effort to create national standards does not added regulatory burden of community banks, we must preserve the role of communitybacks in mortgage servicing or you will see further consolidation which will only harm borrowers, especially those in rural and underserved housing markets. corstruft bank was founded in 1930 and was built, tested and proven under historically economic conditions. we survived the great depression and numerous recessions by practicing conservative, commonsense lending. we have emerged from the recent crisis well capitalized and ready to lend to support the recovery. cortrust bank serves community in 16 south dakota cities from sioux falls to rural communities with populations of less than

150. residential mortgage lending has been an important component of cortrust business since its founding and has grown more important over the years. today we have a $552 million servicing portfolio consisting of approximately 5,000 mortgage loans. over the years we have discovered that mortgage lending is a great way to cement long-term relations with customers and to win the opportunity to serve their additional banking needs. to further bolster our customer relationships we need to service these loans, whether they are subsequently sold in the secondary market or held in portfolio. customers do care about who services their loan, they value and even seek out local servicing. much of our recent business has come from refinancing mortgages away from large lenders whose borrowers are frustrated with remote servicing. even though at its best it's a break-even business for us and loan for loan it's more profitable to release servicing, we choose to service inhouse because it is central to our bank model.

the success of community bank servicing is based on close ties to customers and communities. because cortrust bank's servicing team consists of only four people, customers always know who is on the other end of the telephone or across the desk. a customer who dials our 1-800 number will generally get one of two people on the line. a customer can walk into one of our 24 locations and deal with the staff person face to face. smaller servicing portfolios and better control of mortgage documents also provide an advantage over the large servicers. for these reasons, community banks have generally been able to identify retainment problems. our staff will contact a late customer on the 16th day, the first day of delinquency, and find out what their circumstances are and discuss shrugses -- solutions. personalizing servicing combined with conservative, commonsense underwriting yield exceptional results. our average delinquency rate of 1.7% is 1/3 the national average and is consistent with other

community bank portfolios. in the history of our bank, only a handful of mortgage loans have gone into foreclosure. overly prescriptive requirements should not be applied across the board. there are many examples of harsh new requirements. many of the proposals i've seen would require us to establish a call center of prohibitive and unnecessary expense for a community bank the size of mine. the new fannie mae standards published in june and scheduled to go into effect are overly prescriptive and will delay our flexibility. i ask this committee to urge the federal housing finance agency to delay implementation of the new standards for small lenders with a record of strong performance. we also -- we are also concerned the fhfa's new compensation proposal would sharply reduce servicing revenue that currently only covers cost. moreover, this proposal creates a perverse incentive by rewarding originators and

servicers of nonperforming loans and punishing community banks. the most significant risk in applying standards that are too rigid and previptive in reducing servicing income is that it would cause many community banks to exit the mortgage servicing business and accelerate consolidation. any national standards developed by congress or the regulators must exempt community banks. i urge you not to tamper with our success. thank you for holding this hearing and for the opportunity to present the good story of community bank mortgage servicing. i'll be happy to take your questions. >> thank you. >> thank you. chairman johnson, senator corker and members of the committee, thank you for the opportunity to speak here today. my name is faith. in 2007 i joined the hope now alliance as its executive director. the foreclosure issues we faced in 2007 were viewed as

short-term, subprime issues and most people thought it would take a year or two at most to work through. on approaching my fifth year at hope now, the crisis has not abated for many homeowners, it affects prime credit and nonprime credit borrowers alike. at times we've been discouraged by the scale and persistence of the problem on the foreclosure front but through perseverance and continued effort business our alliance members, including servicers, counselors, federal and state offices, we are seeking more and more homeowners being helped. we measure some successes by the 4.6 million permanent modifications completed through may of 2011. other efforts have been more difficult to measure. sadly there are cases where homeowners fall through the cracks and the industry's percent viewing through the worst housing crisis since the great depression. finding ways to help homeowners achieve stability. we are still here doing what it takes through many different channels to help homeowners find resolution and the comments today are my own and not necessarily shared by all hope

now members. i'm hear to -- here to recommend the importance of achieving national standards. many efforts are under way toward this goal. but to achieve it will require extraordinary cooperation and communication among industry, government and other concerned parties. we all must improve the customer experience for home observers zsh homeowners at risk of foreclosure. uniform clear standards would be a strong step in that direction. current economic conditions, underemployment and unemployment in particular are challenges for customers who are trying to maintain their homes. many at risk homeowners are frustrated by the inconsistent messages from some loan servicers when they ask for help. servicers have made up real improvements here but more needs to be done to create the confidence in the servicing system. let me be clear. national servicing standards may not change the final outcome for many homeowners at risk of foreclosure. all mortgage customers need consistent servicing processes that give them timely responses and information on their options

when they require experienceed difficulties on their mortgage. i'll address two of the most prominent issues in loan servicing, the desire to have a single point of contact and the dual track processing of loans going to foreclosure versus the modification process. to a frightened homeowner, the single point of contact is one way to lessen the confusion and explain to homeowners what steps are required by servicers, investors and state law. it's important to emphasize the servicing system is facing completely different challenges in today's environment than it was designed to manage. over the years mortgage servicing developed uniformity in part because the standards for many loans were set by the g.s.e.'s and f.h.a. guidelines. fannie mae and freddie mac replain the biggest influence in servicing practices and standards today. for many years, that worked well but servicing was primarily a simple task of processing loan payments on performing loans. delinquent loans and troubled borrowers were handled by

retainment plans or the sale of a property at a profit. the current housing crisis completely shifted the demands on the mortgage servicing and services must now manage millions of delinquent loans and work with the borrowers on more complex solutions such as modifications and reunderwriting of loans. since initiating the homeowners outreach events in 2008, hope now has hosted over 112 events. we attract participating homeowner satisfaction to gauge our success and adjust the outreach model accordingly. from the past two years, hope now and the u.s. trever treasury making home able has worked together on outreach. over half of the borrowers rate these experiences as excellent. and surprisingly we continue to find that 35% and 40% of the participating homeowners are first-time contacts of their loan servicers who see changes in the circumstances of at risk borrowers for up to 30% who are

unemployed. unemployment significantly affects the type of aid available and highlights the obvious challenges we face in this crisis. in this offers some insight into the importance of customer experience regardless of the outcome and it reinforces the need for multiple ways to communicate with borrowsers who need assistance. there are multiple efforts under way to improve and establish servicing standards, particularly for helping at risk homeowners. a single uniform standard is needed but current initiatives must be evaluated, coordinated and ultimately combined to set national standards. there are many rules and standards that have been put in place by the various agencies. we have the recent o.c.c. consent orders for the top 14 banks. we have unique fannie mae and freddie mac and f.h.a. servicer guidelines, we have proposed risk retention under dodd frank which includes servicing standards. we have fhfa, fannie mae and freddie mac and ginny may setting a new compensation servicing model that reflects performing loans and nonperforming loans. we have the treasury undermaking home affordable offered recent directtives on a one-year

forbearance plans, note that does not apply to fannie mae and freddie mac or v.a. loans. state attorneys general are under kfrl discusses to discuss practices and processes that will indeed lead to standards. the soon to be cfpb efforts and interagency guidelines are also being looked at to affect standards. all these efforts must be evaluated before any decisions made on any single uniform standard. just a quick note, i did visit a shop recently and wanted to see what they had implemented on the single point of contact. hundreds of people were being trained to handle the single point of contact rule, training lasted up for six weeks. once the training was complete, employees had several large black binders of which to navigate for all the different programs and processes they had to deliver the message on about what the options were for the borrower. the training objective for new

hires is to bring consistency, empathy for the customers and accuracy regarding the descriptions of the options available to the borrowers as well as access to information that would be relevant to the borrower over the course of the eligibility review. the training tasks seem daunting and -- but it was indeed impressive. and some companies are dealing with licensing single point of contact on the original nation process if they're subject to the safe act under several state laws. it was enlightening to see how the directives were being implemented in the real world. all changes must get adapted into systems, processes and work flows, to educate and train the full work force who in turn will need to communicate internally and externally on all these trecktifics. and as a reminder, the single point of contact is not the person who will perform any of the underwriting, any of the modifications or any of the processes if there's a short sale in place. we believe the efforts by various entities currently under way are moving in a positive direction to elevate servicing

standards and improve the customer experience, increase coordination by all entities as needed in order to make things happen in a timely fashion. in summary we recommend the administration gather all of the involved parties together to review the servicing standard initiatives, to ensure that definitions and policies agreed to by regulators, enforcement agencies and investors align with one another. that is the time to ensure a uniform set of standards can be identified and established. reducing confusion and friction from the system is very important. as senator corker mentioned, initially voted, bringing private capital back to market is most important. so looking at standards must be done thoroughly and cautiously. the home mortgage is the most important investment in the limbs of many consumers and it's essential that we get it right and the communications to the consumer of the process and servicing that comes with this investment. the industry nonprofit partners and service members are committed to working to improve

the mortgage servicing for consumers. thanks for the opportunity for letting me speak today. >> good morning, chairman johnson, senator corker and other members of the committee. thank you very much for letting me appear today to talk about this important issue. i'm not going to spend a lot of time on my background but to establish my bona fide general council of h.u.d., president of ginny may, president of one of the most active mortgaging lenders in the south, chairman of the mortgage bankers association and chairman of the mortgage bankers association of alabama as well. first and foremost, i'm not here to defend the industry or be an apologist for the industry. mistakes have been made and there have been some abuses of particular processes. but i am here to speak about three issues. certainty, fairness and state law. and i'd like to cover all three

of those in the limited amount of time i have. i'd like to start by telling you a story about the last time i refinanced my own mortgage, about 10 years ago, and at the closing table the agent handed me a document about 15 pages long of mortgage and he said, you know what this is, do you know what it says, what it means? i said, well, i think i do but tell me what you think it means. he said, it's very simple. if you pay, you stay. if you don't, you won't. this may seem unduly harsh to a lot of people, but that is in fact the essence of the transaction and the essence of this hearing in many ways. it's i think instructive to briefly talk about how the process works. someone wants to borrow money, goss a lender, establishes what they're likelihood of repaying that mortgage is or that loan is and offers the home that they're about to buy or refinance as collateral, as security for the mortgage. at closing they get the money.

in return they sign a note that says, i promise to pay this money back. and in security to secure that propromise, i give you right to take my home if i don't pay that money back. that certainty in the process allows that paper then to be sold in the secondary market, many times to pension plans that you or i may be beneficiaries of. and the money is recirculated in the marketplace. that's the way the process is supposed to work. but unfortunately over the past several years a lot of uncertainty has, as you mentioned, chairman johnson, crept into the process. and that uncertainty has been in the form of stretching out the period of time that it takes to foreclosure on a loan. today it takes on average about 400 days from when a person quits paying their mortgage to when a foreclosure process is completed and in some states, new jersey, new york, florida, it's a much longer process and

that uncertainty that has represent into the process has made the functioning of the market much more treacherous. if you look today over 90%, well over 90% of all mortgages in order to be done have to be guaranteed, there has to be a direct guarantee by the federal government for the mortgage process to take place. or by way of illustration, if you looked over the past three years there have been two private label securities backed by mortgages done in this country, about 500 -- $500 million worth of mortgages. by comparison, if you go back to 2006, there were hundreds of securities totaling $723 billion done in that year alone. a thousand-fold decrease for a three-year period. so the process has dramatically been affected by this uncertainty and you need to be aware of that. fairness is also a very important issue and many of the efforts that we've seen lately

have been designed toen compassionate to those who cannot or will not pay their mortgages on time. and i certainly understand that. but that overlooks the need to be fair to those folks that have been very diligent in paying their mortgages which is the vast majority of people in this country that have mortgages. the effect that have stretching out of the foreclosure process and the uncertainty i mentioned before has been to damper real estate values across the board, across the country, for those folks that have been diligent in paying their mortgages and i would hope that you would take those into consideration in your deliberations. and finally state law. i'm not here to advocate for or against a uniform national standard but i would remind the committee that there are 50 states out there with procedures set up to protect both borrowers and lenders in the process and make sure the process runs smoothly. i would hope that you would be mindful of all of those 50,

really 51 states nrkts case of d.c., the district laws designed to do just that. in conclusion, please be mindful of certainty, please be mindful of fairness and please be mindful of state law and please be deliberate about this process. thank you very much for the opportunity to talk to you today and i'd be happy to answer any questions. >> thank you, mr. couch. professor, you may proceed. >> thank you, chairman johnson. and to other distinguished members of the committee, thank you for inviting me to participate in this hearing on national mortgage servicing standards. as you're aware, i previously committed to speak in oregon today and i thank the committee and its staff for the great flex nlt of having me testify online today and i believe that using these online technologies can continue to open up congress and our political process to participation by the american people. my testimony today dray draws on two previously published items which i have provided to the

committee. the first is on mortgaging service that i published in january this year. the second is an article in the "los angeles times" from march which describes my personal experiences as a homeowner. as you said, mr. chairman, i'm now a law professor at the ohio state university and a senior fellow at the fellow for american progress. i was special assistant to the president for economic policy, serving under larry somers. at the n.e.c. my biggest task was could toward nate the interagency process for housing and housing finance issues. in this role i worked extensively on mortgage servicing issues and in that role i met regulated mortgage servicers as well as other state holders. my january report was called what the fair credit reporting act should teach us about mortgage services. the report makes a simple point. the sorts of market failures that led to the creation of the that led to the creation of the thing in