not have a strategy, you're going to be - mole. you do not have a minimum rate and go up further. the you need further ability from congress to do that? i do not think that you do. one of the things that he talked about, the conforming loan limits, higher than he wants them to be, he also has the ability to raise the fees on those mortgages in particular old conforming loan limits in a particular way. even they -- it makes sense to

that to encourage private markets. is that something that makes sense to do? no one seems to do anything about tiering that the increases. >> you're talking about premium increases and the answer is, all the options -- >> are you seriously considering it to the point that you would actually do it? you have considered it in the past. >> all the options are on the table including some kind of hearing. the secretary alluded to that. given the higher loan limit that we had, there was some opportunity there. authority, or the ability to do more, let us know. and that is my final question -- you require any congressional authority to take the five steps and on lender

termination? i'm a freshman and and i'm not familiar with everything. >> there are several positions that were in the fha reform bill that we would like that additional authority to seek indemnification from certain types of lenders that we do not have the ability to do so now. >> could you give me specifics because it looks like my time has expired? >> absolutely. >> i appreciate the secretary's time for at least one of my five minutes. >> the gentleman is recognized for five minutes. >> thank you. listening to the testimony and gathering in what we have heard today, it seems like you have been caught in a catch-22. you have a situation where as a

result of your falling reserves in your capital fund, you will become more vulnerable to default. these defaults have to be covered because of the federal guarantee that we over to the lenders. they have to be covered. and in the final analysis, it means treasury has to step in. at the same time, the secretary has pointed out that the real key to turning this around and stop the bleeding in the vaults -- and the default is homeowner counseling. and yet in april, this congress slashed the money for you to provide the counseling, $88 million.

slashed all of it. there seems to be a mixed priority here in congress. given that, what impact to the loss of this $88 million have? i agree with the secretary that the most critical weapon we have to turn all of this around is getting that counseling to the struggling homeowners. we forget how complex and complicated dealing with this whole issue is for the average homeowner. a lot of them are scared and we do not have accurate information and intelligence, you do nothing. so when we had our homeowners event, getting them under one roof with the lenders, i found that the key ingredient that helped us more than anything else was having those hud

counselors there. we found out that having fha there and you had the hamp program from treasury, that they qualified with the fha program and the banks got together with hamp. so my question to you this region -- to you is -- despite this move, you have expressed concern over the capt. funding going forward. for the 2011 period. my question is, what level of funding would hu the actually need in order to operate the nonprofit housing counseling program effectively for this year coming out, 2012? >> thank you for raising the issue of housing counseling. we agree it is an important one.

fortunate with the housing bill that just passed that some money was approved, $50 million, so we did not get the $88 million but we were able to provide for fiscal year 12 some level of funding. i am happy that u.s. that. the funding availability for fiscal year 2012 was posted today. >> so it is a done deal. >> we have some money for 2012. >> is this sufficient? >> we originally asked for more. we could effectively use more and i would say that we are doing everything in our power to make sure that the housing counseling program, not just for the grantees, but for the

administration of it, is as effective as it can be. so we currently said -- could use additional funds if they were available. >> some hud-approved housing agencies, would it not be beneficial if hud could contract directly with these counselling agencies in assisting delinquent homeowners with qualified mortgage work out solutions? >> a number of counseling agencies are directly helping borrowers get through their problems with servicers and they're very effective in helping people through the loan modification process, for example. >> that gentleman's time has expired. t want to finish that answer? to get -- do you want to finish

that answer? >> i think that is sufficient. >> the gentlewoman from illinois is recognized for five minutes. >> can you talk about the qm and qrm rules? as currently promulgated by the regulators, do they have the potential to drive mortgages to fha at the exclusion of the private market? all of the private market be able to -- or will the private market be able to increase in this area? did and as we have discussed on private occasion -- >> @ we have discussed on private occasions, we're looking at what this will be. one part of the proposed qrm

rules is loans with higher down payments, and there is concern is that it will drive more business to the fha. obviously we do not know what the rule will be. we do not know what the ultimate impact will be. but we are concerned and we are monitoring that as we're part of the discussions on qrm. >> is there anything that could be put in to make sure that the private market will have access, because of the way that they are drawn? >> again, i am not close enough to the negotiations on the qrm negotiations, what ultimately will come out. it is difficult for me to add to that. >> ok. fha is estimated that a capital reserve fund could withstand an additional decline in house prices. talking about 4% beyond the

baseline decline without experiencing negative capital situations. does that mean that a decline in excess of 4% would result perhaps in the taxpayer funded bailout of the fha? would you need more money? >> i appreciate that question. the answer is this -- without any other kind of policy changes, with the premium increases, if house freezes again got to a much worse point than they are today, or that we project that they will be today, then there is a possibility that we would need additional support. in we're doing everything our five-point plan, doing everything in our power to look at actions that we can take to ensure that we avoid that

situation. >> thank you. i think most of my other questions have been asked, so i will go back. >> the chairman recognizes mr. green from texas for five minutes. >> i think the witness for staying with us. i would like to explore a line of questioning that will help us better understand what fha has done and continues to do with the economy. let's start with loan origination. these fha loans -- tell us quickly please where and what facilities are most of them originated? would that be a bank? >> yes, again, fha is insurance. private lenders are actually the ones originating the fha loans.

>> now most of them today are originated with banks, is this correct? >> yes, financial institutions, banks are certainly -- >> the banks do would -- banks benefit from it. they do not do it for free. there is a loan origination fee. >> certainly. >> banks then hire people who did this type of work. >> correct. >> my point is that there is a broader impact on the economy than just the person buying the home. the bank benefits. realtors benefit because realtors help persons by home. they assist with the home buying process. purveyors of products, they then it that when a home is built, and by the way, builders benefit because they will build more homes if homes are selling. washing machines, dryers,

stoves, carpets, all of these things go into homes. they benefit. the benefits go far beyond the simple purchase of the home. that is actually not the genesis of the profit, because the constructor of the home, and in storm -- understanding there was a market to be sold in, and then we have the manufacturers of products that benefit. so at a time when we need that countercyclical force, fha is serving a meaningful purpose not only helping us with selling the home of the home becomes so important to other industries associated with a home buying process. and with the construction of the home. fhfa -- fha is an entity that if it did not exist, we would try to created or something similar to it. it did not come into existence

on a whim. there were severe problems in the 1930's and fha gave us this exotic problem -- product known as the 30-year loan. at the time, it was anathema. it was not commonplace. it was something that we have now and we think little of the notion of getting one. at one time, it was very difficult to get a 30-year loan, if not impossible. because you had big balloons and you had to refinance and people of little means or modest means, middle-income americans, they did not get homes to the extent that they do today. do you have empirical evidence to support the actual impact if you have had in the area of homes being sold by realtors, the impact on builders, the

impact on manufacturing, the impact goes beyond the simple purchase of a home? which is important, but you have empirical data that deals with these other industries and how they are important -- affected? >> that data certainly exist. i do not have it. but absolutely there is no doubt that what you described is the case. many of the data supports that. for new construction, for example, you could essentially as soon long-term a certain number of jobs for the -- per house bill. there's no doubt that there are many many industries involved in jobs and economic benefit for communities. not just homeownership for new home purchase, but also just as

a matter of refinancing, you can put additional money into people's pockets if you refinance at today's low interest rates, for example, and that puts more money to spend on committed goods and services. >> let me say quickly that the service that is rendered has helped to keep unemployment that is high from being even higher. because if we did not have you with this 56% of home buyers -- >> the gentleman's time has expired. >> the chair recognizes mr. cleaver for five minutes. >> thank you, madam chair. mrs. galante, i am in and out and i had it -- and probably someone already rose this issue because of this conversation one of the former chairs of this

committee, along with the national affordable housing act, they have a 2% capital reserve ratio, and it was designed to strengthen the fund. one of the things that has not been discussed today, a lot said about the capital ratio be below 2%, and one of my colleagues, perhaps on both sides, that there'll not aware that there is a separate cash fund and it was

put in place to address the unexpected loss of the mmi fund. i think that that is somewhere, maybe $33 billion? >> that is correct. >> if everything i am saying is close to correct, you can correct it further if it needs correction, but what i am interested in is that fund is growing and that that is true, then maybe this committee could benefit from having a contexture will discussion from you about this. i see them as inextricably connected and we have not connected it in this discussion today. >> yes, so, this is complicated.

>> correct me gently. >> it is easy for people to mix things up. total capital resources available the fha is $33 billion which consist of an account or repair funds out of, where we set a speed transfer funds into the actually paid expected claims. the capital reserve accounts is the additional account, but it is part of that $33.7 billion, to be for expected claims -- unexpected claims above and beyond the expected once in the financing account for about is the total capital resources available to fha today. the capital reserve ratio is based on another calculation of the total insurance in force and

the expected economic value. -- of the book of business-the potential clients over time. the are two different calculations that you have to keep in mind. >> ok, but we have more funds there today than we had at this time last year. >> that is correct -- and that is so relevant to the discussion. i still a painful that my colleagues were not able to get that impression now. i have no other questions. but it would be my hope that somehow, we are able to get some kind of discussion or some information to members about cranston-gonzalez.

i think it is relevant and we need to get some information out. is there -- you have any ideas on how we can get members of this group -- do you have any ideas on how we give members of this committee aware questor margin we can continue to have individual meetings and dialogues, work sessions, and we to produce the annual report to congress. we also produce quarterly reports that are delivered, that go into -- >> do you think the members are reading those? i was speaking out of turn, go ahead. >> the gentleman's time has expired. the chair would like to thank mrs. galante for staying with us. those who have additional questions can submit them in writing. the report will remain open for 30 days for the committee to

submit written questions and to place the responses and the record. the chair calls a second panel. >> today on washington journal, a look at the 2012 campaigns and herman cain's announcement that he is suspending his campaign with rhodes cook. after that, robert walker discusses rules on insider trading by members of congress. later, barbara slavin on a recent sanctions passed by the senate about -- on a car ran past central bank. that is later on c-span. -- on our ron's central bank. central bank.

gene sperling is at 10:00 a.m. and 6:00 p.m. on c-span. >> he did not have a lot of romantic ideas about spying. he saw it for what it was. >> in "the man nobody knew," carl colby examines the life of a spy master, his father. >> he changed. if you watch the film closely and steady him, he is a soldier. he took on the toughest, dirtiest assignments given to him by the president from eisenhower on wood. but when it came time for the president, ford in this case, to ask him to lie in mislead congress, he could not do it. >> tonight at 8:00 eastern and

pacific on c-span. > >> republican presidential candidate herman cain was joined by his wife outside his headquarters in atlanta where he announced he is suspending his campaign. this follows allegations by ginger white who said he had a consensual, 13-year and extramarital affair with her. ♪ ♪ i have got some news we are taking names we are waiting now for judgement day. i am america one voice, united we stand i am america one hope to heal our land there is work that must be done i will not rest until we have won i am america

is there no end to your own hypocrisy? you have no shame you are only interested in political gain you hide your eyes and refuse to listen you play your games you stuff your pockets i have a feeling that the tide is turning i am america one voice, united we stand ♪ >> thank you, thank you. >> ♪ one hope to heal our land i will not give up on this fight i will not fade into the night.

i am america ♪ >> thank you, my friend. [cheers and applause] >> you all are great. thank you, thank you, thank you. i love ya'll, too. [chanting] >> let me first say that as usual, the cain supporters are not warm-weather supporters.

i cannot thank all of you enough for all you have done, how far we have come, the things we have done. the things that we have been able to achieve. you know, i chose to run for president because the politicians in washington would not do their jobs. that is why i chose to run. they have failed to provide economic growth. they have failed to get spending under control.

they have failed to make us less dependent on foreign oil. these are some of the reasons that inspired me to run for president. if you look at the last 40 years, we have seen that same kind of failure. it is just that the mess has just gotten bigger. you were frustrated. i was frustrated. millions of other people were frustrated. it was out of that frustration that i made the decision to run because the people in washington, d.c., are either playing the blame game or

pointing fingers or throwing crumbs to the american people rather than bold solutions to fix the problem. america deserves more than that. [applause] since the politicians have continued to fail, i decided to run for president. you all responded as you are responding now. i thank you. i am honored by the deep support of so many people across this country. it expresses the frustration of so many people across this country. when i made the decision to run, i did not fit the usual description of somebody that

ought to be running for president. [applause] i had never held public office before. [cheers and applause] i did not have high name i.d. right now it is probably 99.9%. [laughter] i did not have a kajillion dollars. we learned that the voice of the people is more powerful than the voice of the media. [cheers and applause]

secondly, we have learned that message is more powerful than money. we proved something else. i grew up in a world of segregated water fountains. my father was a chauffeur. my mother was a maid. we showed that you did not have to have a degree from harvard in order to run for president. we showed that you did not have to have a political pedigree to run for president. one of the biggest things we have shown is that we, the people, are still in charge of

this country. [cheers and applause] today, we're one month away from the iowa caucuses. with over 300 million americans in our nation, i stand here because of you. if you look at the top three republican candidates right now and consider the president in the white house, we can say that i am in the final four. [cheers and applause] we are in the final four. when you think of where i came

from right here in atlanta, now to be in the final four for the presidency, this is a great nation. [cheers and applause] that is why this nation is so great. i tell you what, it is a powerful and humbling position to be in. proving that we could do this was one of the greatest things, one of the greatest gifts that you and i could give to this country. i have often said that one of america's greatest strengths is its ability to change. we have created significant change on this journey.

i am proof of that and you are proof of that. [applause] i am proof that a common man could lead this nation because i consider myself one of view, not -- one of you, not one of the political elite. i am one of you. our nation is tired of hearing the politicians blame each other. it is time for solutions. as the false allegations about me continue, they have distracted my ability to present solutions to the american people.

i have made many mistakes in life. everybody has. i have made mistakes professionally, personally, as a candidate in terms of how i run my campaign. i take responsibility for the mistakes i have made. i have been the very first to own up to any mistakes that i have made. even if the political elite do not think i handled it exactly the way the political elite handle it. i have handled it my way because that is the type of person i am. [applause] because of these false and unproved allegations, it has had a tremendous, painful price on my family.

these unproven allegations continue to be spinned in the media and the court of public opinion so as to create a cloud of doubt over me and this campaign and my family. that spin hurts. it hurts my wife, my family, me, and it hurts the american people because you are being denied solutions to our problems. [cheers and applause] [chanting "herman"]

herman! we love you. >> here is why it hurts. my wife, my family, and i know that those false and unproved allegations are not true. [applause] one of the first declarations' i want to make to you today is that i am at peace with my god. [cheers and applause] i am at peace with my wife. [cheers and applause]

she is at peace with me. [applause] gloria! >> i am at peace with my family and myself, which is one of the most important things. that being said, becoming president was plan a. before you get discouraged, today i want to describe plan b. as of today, with a lot of prayer and soul-searching, i am suspending my presidential campaign.

i am suspending my presidential campaign because of the continued distractions and hurt caused on me and my family, not because we are not fighters, not because i am not a fighter. it is just that when i went through this reassessment of the impact on my family, on you, my supporters, your support has been unwavering, as well as the impact on the ability to

continue to raise the necessary funds to be competitive we had to come to this conclusion. we had to come to this conclusion that it would be best to suspend this campaign. that is the bad news. here is the good news. the pundits would like for me to shut up, drop out, and go away. well, as my grandmother, who lived to be 104-years old used to say, if someone is dead wrong, bless their hearts. [laughter] i am it will not be silenced and i will not go away.

therefore, as of today, plan b. plan b. i call it "the cainsolutions.com." let me explain why. there are three audiences out there, folks, that we have dealt with, that i have had to deal with. the media class, the political class, and there is "we the people." it is "we the people" that got us this far.

it is "we the people" that wants change in washington, d.c. they are responsible for this massive movement going on in this country -- the tea party movement, the conservative movement. it is a movement by "deep -- "we the people." i will continue to be a voice for the people. that is why, today, we are launching cainsolutions.com where the people will choose, not the media, not the politicians. the people will show that the people are still in charge of this country through this new organization, i will still be promoting the biggest change and transfer of power out of

washington, d.c., back to the people since this nation began and that is the 9-9-9 plan. it is not going away. i will still be actively supporting and promoting a foreign-policy that starts with peace through strength and clarity. i will still be promoting actively an energy independence plan for america. we can and we will become energy independent. now i know that many of you are disappointed. i understand that. i know that many of you are disappointed and i certainly understand that. i am it disappointing -- disappointed that it came to

this point that we had to make this decision. one of the reasons that i ran for president of the united states was so that i could change washington, d.c. from the inside. plan b is that we are going to have to change it from the outside. [applause] it will take a little longer. we are going to have to work a little harder. but we will change it from the outside. one other thing -- i will be making an endorsement in the near future. i will be making an endorsement and i can tell you right now, it will not be the current occupant of the white house.

that will not be my endorsement. america has learned something about this process of running for president. it is a dirty game. it is a dirty, dirty game. but i happen to believe that the american people are sick of this mess and if i am not the outsider to get there, i happen to believe that the day will come when the american people will reject all of the distractions, all of the false accusations and on proved accusations, and it will make a change because that is what we have got to do to get real change in this country and get it on the right track. as i think about my parents who raised my brother and i sat

right here in the atlanta area, they taught us three very valuable lessons that you share. belief in god, belief in ourselves, and belief in the greatest country in the world, the united states of america. even though i have had to suspend my campaign, i have not given up on america. i have not given up on the united states of america at -- and here is why. look at our history when we have been challenged the most is when we the people have risen to the occasion the most. i happen to believe that we will do it again because we the people are still in charge of this country. let me leave you with this.

i believe these words came from the pokemon movie. the media pointed that out. i am not sure who the original author is, so do not go write an article about the poem. but it says a lot about where i am with my wife and my family and where we are as a nation. "life can be a challenge. life can seem impossible. it is never easy when there is so much on the line, but you and i can make a difference. there is a mission just for you

and me. just look inside and you will find just what you can do. just look inside and you will find just what you can do." i have had to look inside to find what i can do and here is what i can do. here is what we can do. we can put united back into the united states of america and move the shining city on a hill back to the top of the hilltop where it belongs. i will never apologize for the greatness of the united states of america. god bless you. i love you and thank you. [cheers and applause]

♪ ain't no mountain high ain't no valley low river wide enough, baby don't worry baby just call my name i'll be there in a hurry you don't have to worry ain't no mountain high enough ain't no mountain low enough enougho river wide to keep me from getting to you, babe remember the day i set you free i told you you could always count on me from that day on i made a vow

i'll be there when you want me some way, somehow ain't no mountain high enough ain't no valley low enough ain't no river wide enough to keep me away from you ♪ ♪my love is alive way down in my heart even though we're miles apart ain't no mountain high enough ain't no valley low enough

ain't no river wide enough to keep me from getting to you, babe ♪ ♪ far we've been travelling far without a home free we want to be free

we huddle close and hang onto the dream on the boats and on the range they're coming to america againe not looking back they're coming to america light todayling in the eye of the storm in the eye of the storm home a new and shining place light burning more

moreom's light burning ♪ everywhere around the world they're coming to america everytime that flag's unfurled they're coming to america got a dream to take them there they're coming to america got a dream they came to share they're coming to america they're coming to america they're coming to america they're coming to america americacoming to

today today today today today my country tis of thee sweet land of liberty of thee i sing of thee i sing today ♪ today today today ♪ ♪

hesitate break down the garden gate life is a highway i want to ride it all night long if you're going my way i want to drive it all night long ♪

♪ life is a highway i want to ride it all night long if you're going my way i want to drive it all night long live is a highway i want to ride it all night long if you're going my way i want to drive it all night long ♪ there is a difference between you and i

a misunderstanding once, but now we look in the eye ♪ life is a highway i want to ride it all night long if you're going my way i want to drive it all night long life is a highway

i want to ride it all night long if you're going my way i want to drive it all night long ♪ ♪ >> hear what the candidates are saying on the campaign trail at the newly designed web site for campaign 2012. >> the big one that i started with is our budget and our spending. if your entrepreneurs are not active, investments are not lending in the marketplace. it is landing somewhere else.

capital is a coward, you have to argue. if it is not landing in your marketplace, it is going somewhere else. >> i think the fair tax is a very interesting concept, the idea of having a consumption- based tax rather than an income- based tax. to go to that debate right now and have a debate on a fair tax, we need to do something now. >> read the latest comments from candidates and political reporters all at c- span.org/campaign2012. >> coming up on washington journal, will take your questions and comments. after that, news makers with gene sperling. later, our c-span series, ""the contenders." today we will look to the provincial campaign of george mcgovern. >> this morning on "washington >> this morning on "washington journal,"