coming up, we will talk to two members who serve on the house financial services committee -- democratic congressman keith ellison of minnesota and arizona republican congressman david schweikert. they will take questions on the economy and president obama's latest housing mortgage plan. >> over the past two and a half years the u.s. economy has been gradually recovering. while conditions have certainly improved, the pace of the recovery has been frustratingly slow. and particularly from the perspective of the millions of workers who remain unemployed or underemployed. fortunately over the past few months, in the cases -- indicators have shown signs of improvement. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] host: that was part of the testimony that the federal

reserve chief ben bernanke gave to capitol hill yesterday in his outlook for the year 2012. as we start our program this friday morning we are going to ask you to tell us how the economy is failing in your local community and how you think it might in fact your vote and those of your neighbors going into the election year. lots of stories being written about nevada before tomorrow's caucuses and the effect of the economy there, which has been hurting since the financial crisis. we would like to expand it to a nationwide discussion. your locally economy, is it showing signs of unproven or still having problems and what it might mean for november. here are the phone lines -- good morning, and a good friday, february 3. we just have a two-hour program. the house is in early at 9:00 a.m. this morning, considering

an faa bill and other measures. but we would like to involve you in this conversation about the state of the economy and whether or not you think it will have an effect on the way you vote in the fall and that of your neighbors and community. we will play clips throughout the first 40 minutes of ben bernanke. also, another economist whose report on 2012 made news this week was doug elmendorf, head of the congressional budget office. he made a lot of headlines this week as well. to show you the headlines from ben bernanke's testimony yesterday before the house, here is a sample of them. in "the washington times" this morning. and in the business section of "the new york times" --

finally, here is "the washington post" -- let's listen to him in his own words. [video clip] >> i want to be very clear. i did not want anyone interpreting me saying anything other than this congress has a very difficult and important job to address the long-term fiscal sustainability of our federal budget. that is the critical thing. i think that even more aggressive strategies that have been pursued recently are warranted over the longer-term, but i also think that that could be done in a way that could be persuasive to markets and achieves those objectives. but does not quite a jolt to the recovery -- does not do it all at once.

i think that as long as there is a credible, strong plan over a period of time and we move into that plan, it will achieve most of the objectives of fiscal sustainability. we need to at least avoid doing harm. i would say do no harm is an important piece of the device i would offer you. host: the fed chief was optimistic about certain aspects. he expressed concern about the debt situation but you can hear his message to congress in addressing it. he says, do no harm. i want to show you a "the new york times" story connecting the economy and the electorate. a piece on tomorrow's nevada caucuses.

how are things going locally? but you experiencing some positive signs? are you still feeling like the community is in a deeper part of the recession with not much change? tell us what is going on and talk to us about your handicapping for what it might mean in the fall. here is one from a viewer on facebook.

what is happening in your area? we begin with the detroit. mark, a republican. caller: thank you for taking my call. i would say the economy in the detroit area has definitely improved. but i would not say it has improved fast enough considering how low interest rates are. with 0% fed funds rate and no place to go, to improve the con in the -- to improve the economy, you would think things would be exploding. but the foreclosure rate i think has definitely leveled out. and with the domestic auto

industry and so what the recovery, things have stabilized here but eventually interest rates have to go up and i am afraid that when they do, we are going to see the bottom falls out of the real-estate market again and we will be right back in the same situation we were two years ago. a host: can you move this to what this might mean for the fall? caller: i think there is some sense of complacency, the system is working again, that we could get by with the status quo. but this is a typical election year. economics and politics -- where interest rates are super low right now. trying to spur quick growth. but in the long term i think we are going to be right back in the same vote we were a couple of years ago when we started. >host: thanks, mark. next is a democrat, denise.

caller: we are in the east part, by a gust of georgia, home of the masters. host: how are things doing economically? caller: kind of like the people in waco, a small, bedroom community. not really affected. but we had our share of problems naturally. we have high unemployment rate but we also have people taking advantage of the low interest rates, first-time home owners or first time in generations. we have seen some positives along with the negatives and we support 100% what the president is trying to do. unfortunately, you know, we have our share of problems but these problems have been for a long time and we cannot just blame it on of our current administration, which we see a lot of people are trying to do. but the war certainly has hurt us economically, with the

credit-card war. so, this is something that has happened. it will take all of us working together to recover. and i would like to see our congressional people in washington working with us as human beings and getting rid of the rhetoric of my issue is bigger than your shoe or my issue is more expensive, and realize some of us are having to make decisions whether to buy a new pair of shoes. i would like to see the working harder for the people and less harder for their political parties. host: thanks, denise. we are expecting the jobless numbers later on today, about 8:30 a.m. eastern time. but here is the map of the united states with the last monthly numbers. the darker the color, the more joblessness. nevada is the one state, that purple indicates 12%-13.9%

unemployment. the story in "the washington times" is about the unemployment rate. we will take a call and then i will show it to you -- young people abandoning their looking for job is causing the numbers to go down. maryland, a call from georgia who is an independent. caller: the most republican county in the state of maryland, the highest percentage of republicans. but the poverty among the 20 and 30-somethings young men and women who have no chance of getting a steady job and being able to save up for a home, just tremendous. host: where might it 20-year- olds have been employed in that part of maryland at 6 07 years ago? caller: there were a bunch of stamping presses for the auto industry that went away.

they finally opened another assembly -- brake assembly plant here and the prospect of jobs. but the homeless problem is just tremendous. i help provide meals with other church members and we had 120 people last monday -- no children because schools were open -- but the level of poverty is just astronomical. a growing underclass. these people taking jobs at minimum wage when way it would -- when they can get them, tossing signs in the air as human advertisement, doing everything they can. but it is palpable. the loss of hope on the part of young people. >> -- host: you have a sense whether or not they are being involved in politics? is there situations bring them to be activists or have they

turned off to the political system? caller: they are at the age when i was young, in the 1960's, when i was involved, but they lack so much mobility and they have no income and they are not really tune in to the political process. they are just desperate. our local newspaper has done a recent series of specials on the people who are living under bridges. and they live under bridges while people in a mercedes drive-by them. and a private country clubs are still playing golf. but the lack of compassion is almost romneyesque and robotic among a lot of people. it is a very tough situation. host: thank you. i will interrupt you just because we have a lot of other people to tell their stories.

eldersburg maryland. a part of our twitter community writes -- on the jobless numbers, here is the business section of "the new york times" anticipating the new report. i mentioned the "washington times" front story -- here is the story -- we are asking you to tell us about your local economy and whether you have a sense how it will affect politics in the fall. ronald as a democrat from texas city, texas. caller: before i do, i want to

compliment you. you are one of my favorite hostesses. i know you have the sweet young things nothing at your heels but to me, you are still the best. host: thank you, but they are not nipping at my heels. we are all colleagues here, but thank you for the compliment. what is the economy like? caller: on light of the unfortunate story we just heard about what was happening in maryland, texas has received more than its share of federal funds, at least back to the days of lyndon baines johnson. we have, in addition to presidents, we have had some powerful speakers of the house from texas. and so, long story short is that my area -- which i live in the 14th congressional district -- doing fantastically well. i have to attribute that to our getting more than our share of federal funds.

these vast construction projects of roads, bridges, hospitals that has taken place in this area -- galveston, texas, and mostly on to what we call the mainland, the area that i am talking about extends toward houston about half way. for example, the university of texas medical branch has an absolutely fantastic facility that i call the taj mahal about halfway in between where i live, texas city, and houston. we used the facility because i intended to my mother, she is 89, so we are getting the grand tour of all of these facilities -- the new memorial, the vast expansion. and then the roads, bridges. it is unbelievable.

texas has always had good roads and bridges, but our section of texas up against any part of texas, and of course, and the other place in the country. host: if i understand you, a lot of that is because of federal dollars? caller: absolutely. when my family started -- we had george w. bush, we had governor rick perry, and then as a -- he obviously cooperated, we have congressman ron paul. host: let me ask you about november. how do you think people in your part of texas will be voting in november? caller: very conservative here, very much republicans. although i am a democrat. host: thank you so much for telling us about texas city. you see a cause and effect on federal investment. if you were bent on our facebook page suggests -- he is talking

about paul ryan in the hearing. talking about ben bernanke in front of the house yesterday and talking about your thoughts on the economy. poll numbers suggest a bit of an uptick in confidence. the latest wall street journal/nbc news poll. you can see it had peaked but it is beginning to come down in the right direction. 30% are saying the country is now on the right track and about 60% on the wrong track. that is a definite uptick. also in that poll, the economic gains aid obama -- this is what

are not his job approval rating -- as you can see, it is beginning to take up -- tick up. one more, this right direction- wrong direction overall. this is what it looks like in a different graphic format. new information on perhaps some optimism beginning to creep back into the public on the state of the economy. let's take our next telephone call. it is from springfield, missouri. dale is an independent. caller: good morning. the economy here and still the trade i do -- home-improvement, and total home makeovers -- is down to almost nothing. i guess i don't understand why there are so many manufacturer'' overseas and our leaders are actually paying them to go overseas.

i think it all has to do with what stocks they own. host: how you see the connection there? caller: well, why would they let u.s. manufacturers' overseas unless they had stock options in that manufacture? the same with people in congress, the senate, and the house, change the law so now it is legal for them to do insider- trading -- well, until yesterday. host: he is talking about the debate in congress over what is called the stock act, insider training legislation that was passed by the house overwhelmingly, 96-3. eric cantor, the majority leader in the house, already said it the house will be taking it up very soon. piece about this in "the washington post" this morning.

"minor bill transformed into a major reform package." here is what paul kane rights. next is a call from new york city. this is rob, a democrat. caller: thank you for cs been big you are one of my favorite, too, just like one of the previous callers. in new york city, i think, is really a place of opportunity for young people, middle-aged people. there are outlying areas outside

of manhattan that are quite livable and pleasant. there is queens. i am not here just being an advocate -- i did not work on the "i love new york" campaign. there are delightful neighborhoods that are more affordable then manhattan and you did not need a car, you do not need car insurance. you can get a monthly metro card for $107 and go anywhere you want to go for 107 bucks a month, and that is your transportation costs. host: it sounds affordable. are people in those communities finding work? caller: do you know, new york city is really hustle and bustle and vibrant. two quick points, if i can. poor andnderstand how middle-class poor people, republicans and democrats, can be cheerleaders for tax breaks for millionaires and billionaires.

i cannot understand how anyone can be against not being able to be kicked off your health insurance company by a health insurance company. i do not understand how you can be against statewide health insurance exchanges that would prevent health insurance companies from charging excessive premiums. it seems like we have been coopted -- the middle class and poor -- to cheerlead for causes, whether you are a republican or democrat -- that you become a cheerleader for causes for rich people. i see plenty of every wealthy people of the neighborhood and vivian. i am not one of them unfortunately. we take on their cause as if it is our own and it makes more sense to me how people -- again, republicans and democrats -- are not thinking clearly when it comes to what we see in our own interest as middle-class people. it will take on the interest of

the rich and cheerlead for them like it is the most important thing going in our lives. host: thank you so much, from new york city. "the new york times" has a story about mayor bloomberg's budget. it suggests there are other ways the city is raising revenue rather than raising taxes. what is happening in the photograph is increase enforcement by police for tickets to bring in more revenue in the city. different budget from past years. a tale of two cities we have here. the headlines from "the providence journal." that city is near bankruptcy, according to the mayor. the front-page story in that home town paper. by contrast, also of the same

region, rochester, new york, which just saw the kodak co. go into bankruptcy. here it is "the new york times" op-ed piece. among the things he says worked for rochester include a valuable labor pool -- when people were laid off, start-ups took up the workers. also rochester has a strong higher education sector, which was like was supported by kodak. and a cultural institution. many highly skilled workers chose to stay because of the amenities inspired by eastman's philanthropy, including the school of music and the international school of

photography. if you want to hear more about how rochester survived but this will hit and doing well, it is an "the new york times." saratoga springs, new york. you are on the air. caller: i kind of agree from the guy from new york city. that is what i am an independent because i feel neither party caters to the people in the middle. they cater to the lead. -- but saratoga county is doing pretty well. there is a racetrack here. the housing market is not an issue -- a half a million dollars condos. also building a huge ship plants -- chip plant. but as the other callers have echoed, is under people having a harder time. i see young people having a rough time and they are the poorest.

but upstate new york, saratoga county, doing really well. if you go a little west or north of here, a whole different story. you find down with virtually nothing and 10% unemployment. where i live it is an affluent community. host: what do you think it needs from voting in the population around you in november? caller: we have a mix. here we had gillibrand for the senator, she is a democrat, and gibson is a republican. a mixed bag. new york is mostly democrat, but if you go up state it is mixed. there are a lot of republican communities but in saratoga county in this kind of half and half. i think it is going to go to obama appear big time because i've really do not think people like from the and gingrich. host: thank you so much. saratoga springs, new york. a viewer on twitter tells a

similar tale of two cities -- we also posted this question on our facebook page, so if you would like to take part in the conversation you can continue when we finished live on our television program. we are mixing in a few of the facebook, as we have got and as we talk to you on the air. kentucky. nancy is a republican. good morning. tell us the story of pike county. caller: well, we have a very progressive leadership in the local city. the former governor patten is here. the local newspapers indicate that our department of energy through the pike county court said there were situations where perhaps we are having two developments of coal gasification, and not too far

from here, approximately 70 miles, gilbert west virginia -- $3 billion coal gasification deal. two germans were there recently. i understand in december there was a wealthy chinese person acquiring acreage. rumor has it the chinese purchased a considerable interest in, i think it was kentucky fuel. folks from india run frazier creek mining. grundy -- i think croatian. so, it is definitely a global economy. if pike county were a state, we would probably be the 10th and energy production.

host: a question -- are the locals happy about the investment from outside? does for the jobs that comes with it? caller: we are blessed to have jobs. host: thank you for your call. pike county, ky. sounds like it is doing well and nancy tells the story of a number of investors from all parts of the globe in her region. jack from manhattan also talking about new york -- >> is a call from baltimore. carroll is a -- next is a call from baltimore. harold is a democrat. caller: i live in baltimore county, maryland. and we are like 30 miles away from d.c. what funding is coming through

is directly from maryland -- people get hired in d.c. but a lot of people did not live in d.c. but they buy homes in maryland. always a lot of activity here and a lot of job openings. but you have a lot of people who've not qualify -- some did not qualify, and that is why we have the unemployment but not as bad as a year and other cities around us. host: what does it mean for politics in the fall? caller: they will vote for obama. maryland is a democratic state anyway. you have to look at -- a lot of people seem to forget how we got in the situation. we went through eight years of a republican president and this is what he left us. thinking realistically, how would all change in four years. it can't.

personally i believe to give this man another chance and get in and see what he can do to help improve it. i would not vote for romney or even gingrich. host: thank you. paul sends us this e-mail --

that is paul sending us an e- mail. this unsigned email -- we are asking about your local economy and whether you think it will have an effect on elections in november. another economist who made news this week is the head of the congressional budget office. his name is doug elmendorf. here are some points on testimony he gave to congress. key facts from the cbo's budget and economic outlook that made news this week. he told us a real economic growth was projected to be just 2.2% in 2012, falling to 1% in 2013.

let's hear some of him in his own words. [video clip] >> to put the federal budget on a sustainable path, policy- makers will need to allow federal revenues to increase to a much higher percentage of gdp, average of the past 40 years, or they make large changes to social security and federal health -- health care programs, or pursue a combination of those strategies. host: our next call on our conversation about your local economy is john, a republican in asheville, north carolina. caller: thank you very much. i am part of the dying breed of republicans in asheville. as though it is heavily democratic and also have a concentrated with environmental non-profits, public interest nonprofits, racial interest nonprofits. above the one thing that has

really hit asheville hard as we lost several major, major industries. we lost a volvo plant, we lost several textile mills over the years, and the only way we have been able to get other businesses in to fill those places has been through huge government incentive packages to several companies. we had one company that gave millions of dollars to that company -- they gave millions of dollars to that company. there is a beer brewery coming in -- they have millions of dollars of incentives. but in the meantime, people out of work because of plant closings have not been able to find anything close to what they had when they were working at the plants. it has really been tough. you had a couple of callerss early asking how could people not support taxing the rich more

or removing all of these incentives for the rich. i never got a job from a poor person. and the fact of the matter is, if you continue to tax rich people at incredibly high rates, nobody in the country should have to pay more than half of their income to the federal government. and if you continue to do that, then do not complain when you don't have a job because nobody has any money to hire you. host: team, john, from asheville, north carolina. the susan komen and planned parenthood story, and lots of the papers. one of our viewers as watching very closely the story. officials have resigned as a backlash gains steam. that is from huffington was. and it is the off-lead story in "the washington post."

we will have a guest on this topic from "washington journal" on this topic soon. sacramento, california. lisa, a democrat. caller: good morning. thank you for taking my call. i have been on and floyd for a year now. host: what did you do before you lost your job? caller: customer service supervisor. my home was foreclosed in 2008. it has been hard for me to find a job. i had an interview the couple weeks ago and they told me that i needed to speak spanish. and i thought we were in america. so, that kind of upset me, disappointed me. but i just want to say that i

just hope they extend this unemployment because i really need it. the other day i was driving and i saw a person with a sign that said they were hungry and i had $3 and i give them a dollar. i feel millionaire's should not mind giving a few bucks to people who do not have. i did not understand why it is a big issue. host: how are you making ends meet, and have you moved to a rental unit since you lost your home? caller: after my home was foreclosed i lived in my car for about six months. host: you live in your car? caller: yes, i lived in my car. . -- and then i found an apartment and i found a job. host: are you working? caller: i found a job and got laid off again. my first layoff was in 2008, that is what i lost my home. i moved to sacramento and i

found a job and i got laid off last january -- it will be a year of this year. host: can you explain -- i apologize if this question as to personal -- but for someone who had a house, how did you survive living in your car? caller: it was hard. i suffered from deep depression. it was really, really hard. but i did not have nowhere else to go. host: what do you see as the path forward from where you are? caller: what i am that, a lot of people out of work. host: california has the highest unemployment in the nation. caller: a lot of people are out of work -- and from my apartment manager, he is lenient. if you are in late on your rent -- right now i am waiting for the extension so i can get the extension and he has been working with me. i think god for that. host: thank you for sharing your

story and best wishes for you. good luck in your job search. next is a call from tom brokaw and north carolina pitsch caller: i have businesses in tarboro and in dallas and if i can i would like to explain the difference between the two cities. in tarboro, the unemployment is 19%. at the county is the second highest unemployment in the state. there are no millionaires, to my knowledge, in tarboro. the other part of my business is in dallas, texas. dallas is run over with millionaires, rich people. there is enormous industry in dallas catering to these rich people. there is an enormous industry in dallas catering to the people who cater to the millionaires. there is an enormous industry in the dallas catering to the people who are catering to the people who are catering to

millionaires. if you are unemployed, and strongly recommend when you say your prayers at night, thank god for rich people. you sure are not going to make it without them. so, let's not start knocking rich people and start a business catering to them. they've got a lot more money than the government. it is like the old -- when the fellow was in medical school and somebody asked him what he was studying, he said item studying the diseases of the rich. that is exactly what you should do in business. start a business, go to work, and cater to the people who have money. take it from them. honestly and legally. not dishonesty -- dishonestly through taxation. host: what kind of business to you run? caller: i am informing in north carolina and antiques in dallas. -- i am in farming in north carolina.

host: and member of the congressional delegation decided not to seek relief -- seek reelection. congressman schumer -- heath shuler said he did not intend to be a career politician and will not seek reelection. facebook's ipo is also making a lot of news and in "the washington post" it tells us facebook also has been beefing up its presence in washington. this is an interesting paragraph here -- a couple more calls as we talk about the economy in your part of the country. st. joseph's beach, florida.

brett is an independent. are you there? you are on the air live. caller: thank you. it is nice and paradise. i worked 10 years for a frozen food distributor -- 80 hours overtime every two weeks. everybody said by a realistic. my home was paid for with cash. so i just kick back -- your life and paradise. all these papers want to hate people for doing the right thing. but i want you to ask this keith ellison fellow or what ever politician you get on there -- why don't they do something smart and let people did into ira's withoutnd penalties, and the warren buffett rule, and let them get their money like the 15% tax rate and then everything would be cool. but they want to steal and field

and all that stuff because they are a bunch of crooks. host: we will have two members of the program, keith ellison, let the caller said, and at 8:20 eastern time, david schweikert, republican of arizona, first time -- first term in congress. our lead off in both is the president's new plans for refinancing homes to get people who are under water a break with the low mortgage rates. we will start off with them on that and also talk about other aspects of the economy. hyattsville, maryland, in the washington, d.c., area. phil is a democrat. caller: i have lived in the state for four years. i came in right when the economy tanks. it is incredible to see the difference between people working -- and the best majority of americans struggling in the economy. a very small percentage of people who seem to be thriving. for example, i had a friend in

2010 who bought an e-class mercedes on private money that he did not turn in his job. he worked basically retail, earns less than i do. for some people, of the economy changing has not really affected a small percentage of certain americans. listening to the show, it is strange to hear so many people saying how badly obama is doing when he is trying so hard to ensure people's rights are protected, the civil rights issues in this country. again, it is amazing that issues like equality is still being discussed and debated. and the reason the the health care plan that was just passed to insure people -- the

premiums above what they can afford, already the health care is so expensive here, not only the premiums -- comparatively expensive than other countries. host: are in here just a touch of an accent. caller: i am an aussie did i come from what american conservatives call a socialized country but we do pay a similar tax rate to what americans pay but there is absolutely no trouble between having private and public health care. i had a private health insurance policy when i was living in australia and i had, i had a choice, and i paid a lot less and i also -- my employer had nothing to do with what insurance company i took.

i paid the company direct, and the best health insurance money could buy and i still pay less than what i in pain. apparently my employer is paying 77% of my premiums. considering my 33% of my share is still more expensive than what it would be on my own. it is absolutely amazing that people are trying to i guess criticized obama for trying to do something bringing these companies into reform. host: what brought you to hyattsville? caller: i am a school teacher and working at an international school. host: thank you for calling in. in comparison with australia. our last call from westminster, maryland. john is a republican. what do you have to add to the discussion today? caller: i am 19 years old and i live in westminster and if the callers calling in -- one from baltimore county and the other in eldersberg.

i am familiar with the eldersburg area -- there are a lot of homeless people there. it is not as pretty as everything things it is. people saying that george bush, his eight years, caused all of this. it has not. george bush did cause some of it -- but when obamacare men he brought the debt up more. martin o'malley, the democrat, is wasting the money cleaning the bay. it is clean. the fisherman a couple of years ago said it is great and all of a sudden it is not. i am 19 years old and i am having just as much finding a job as anyone else. my mom has been on and went for a year and a half, my dad is unemployed. i have a lot of family that is wealthy that is doing well. but most of the people are not. it is not a good place to be. and if obama gets reelected it is not going to be good. i am voting for mitt romney.

host: we will close with this -- mary on twitter. much for sharing your stories. ben bernanke was asked about the housing crisis, and that is what we will start with with our next guest. let's listen to ben bernanke, what he had to say about the housing crisis and we will be back right after this break. [video clip] >> i think the mistake was a little different than that. house prices were already falling in 2006 and we were aware of that. what would -- what we did not know was what the gene was the impact. we did not have a sufficient understanding for the fall in house prices, the resulting effects on mortgage quality and so on, would affect the financial system. that is the link we did not see in 2006.

obviously we did not see the crisis, but certainly we were aware in 2006 that the housing market was cooling. we talked about a frequently and i talked about it in testimony. i have to emphasize that we learned a lot of lessons from that experience and we radically changed the way we do our supervision. and also, and particular, we focused so much of the interaction between different parts of the system, looking at it from the system a point of view and not just individual institution. while i can never promised we will not have another financial crisis, we made a lot of progress in our ability to monitor those situations. [applause] >> this weekend, book tv and american history tv explore the

history of literary culture of beaumont, where the texas oil industry got its start. saturday, beginning at noon eastern on book tv on c-span2, book bazaar owner john roberts on beaumont that deliver culture and the challenges of running an independent bookstore. also offered j. lee thompson on teddy roosevelt's yearlong post- presidential expedition to africa and euro. from american history tv on c- span 3, sunday at 5:00 p.m., january 11, 1901, the gusher on spindle top kill ushered in the petroleum age. with the oil, came the roughnecks, and with the roughnecks -- an infamous brothel on crockets street, decades of gambling and prostitution and other farm thrived until a 1950 commission crackdown. beaumont, texas, this weekend on c-span2 and 3. >> "washington journal"

continues. host: we welcome that congressman keith ellison, financial services committee member and also co-chair of the progressive caucus in the house. we will talk about the housing crisis, and particularly president obama's newly announced mortgage refinance program. i have a map of what your state looks like, congressman, on the foreclosure situation. it was a heads up about housing is doing in your thought is on how central it is to recovery. guest: i think housing -- depressed prices and housing is really what is causing the drag. if we can address thousand, are gdp growth would probably be a full percentage point higher. people are under water. people in our district are on the water all over the country. that just means we owe more on the house than the value of the house has retained. and this is a big problem because they really cannot sell the house, they cannot move if they cannot sell the house. and it has put people in a very difficult situation.

of course, a lot of people's greatest asset is in their home and it the greatest asset is actually not a asset but a liability because its debt is greater than the value, then that is a tremendous challenge for people who might be trying to use their home to refinance the business and even retire. it is a real serious problem. also a problem for tenants, too. because for closures does not just affect homeowners but those who own rental property, and when they lose their rental property through foreclosure the tenants are often the last to know. i am producing legislation to help tenants who find themselves for closed even though they made every rent payment. host: the jobless numbers are doing much better in minnesota. 5.7%. you have more jobs than most of the other states. how is it not helping the housing market?

guest: it is spotty. some areas, people who have high education attainment in a technical field, their unemployment rate may be as low as 3% 04% in certain industries. in other neighborhoods, it may be 15%. even though we have -- we have a good overall rate, on average when you disaggregate it it hits some neighborhoods harder than others and in those neighborhoods foreclosure is a serious issue. host: let's move to the president's plan. in the state of the union address he talked about his idea -- the third of four programs since the crisis that we had to address the housing situation. guest: i am glad he keeps trying. host: the proposal here, as i understand, to help people take advantage of the very low interest rates. the government will help with closing costs. what do you think of this plan? guest: i think it is a good plan. i think it is what we need. i am not sure it is going to

solve the enormous problem that is out there. before this crisis is over we may see 10 million people in foreclosure. but it is an additional tool and i think it is important. i think it is responsible. he is using something called the financial crisis responsibility fee in order to pay for it. and i think it will help many homeowners. people have to be covered. of course, a lot of people in trouble are not current on their mortgages, and that would be an eligibility requirement. i think if you look at the total portfolio of things to keep people in their homes, this is one more tool and i think it is positive. host: because of the program, depending on how many users, are $5 billion to $10 billion. where would the money come from? guest: the financial crisis responsibility fee would be the source -- host: the banks would pay for

it. guest: the large banks. it is enormously fair given all the help of the american taxpayer gave to the large banks. we literally saved them. the least we can do, given many of them are highly profitable now, is to help out homeowners. again, some of these banks have been giving their ceo's and top executives and on this bonuses even at a time when we just bailed them out. so i think the least they can do is demonstrate a little bit of patriotism. host: two voices. first, president obama himself. this is from wednesday. we are going to listen to what he has to say about the programs that have been implemented so far. [video clip] i will be honest. the programs that we put forward have not worked in the scale we hope. not as many people have taken advantage of it as we wanted. mortgage rates are as low as they have been in half a century. and when it happens, usually

homeowners flock to refinance their mortgages. a lot of people take advantage of it and save a lot of money. but this time to many families have not been able to take advantage of the low rates because of falling prices locked them out of the market. they are on their water, mix of more difficult for them to refinance. then you have all the fees involved in refinancing. a lot of people said, you know what, even though i would like to be obviously cutting down my monthly payments, the banks just not being real and courage. host: do you agree with the president that explanation of why people have not utilize the program so far? guest: i think it is a fair explanation, and i also think he is right, the programs offered so far have not reached the numbers of people we would have wanted them to. i think that we need a more aggressive program get like i said, the president gets points for me because it continues to try. i think there are a lot more

things that could be tried. we need it to get in place, something to allow bankruptcy -- cram down in place, concerning bankruptcy court for the first home. we need other provisions to help, like extending my "protect tenants from foreclosure" bill, which would be important to do. and i think to invest in low income housing much more so. i am a supporter of this program and the president's effort. i just think the president is right -- we just need to lead. host: a question from just and ramirez -- guest: they foot-dragging for a number of reasons. it has to do with servicing contracts. whenever you see the mortgage that is owned on a bank's books and home mortgage, it is easier

for the modification to occur. with the rise of securitization and you see these mortgage- backed securities develop, these mortgages have been repackaged and sold all round, and there are servicing contracts through which people derive fees from servicing these mortgages. and it is hard to negotiate with these people because they have to go back to investors and get approval, and it often takes quite a long time. it is bureaucracy. not government to rock -- bureaucracy the private sector bureaucracy that gets people gummed up. host: another question -- guest: i say, no, not unless banks find a way to pass on to consumers are something like that. but this is a fee on large banks, called the financial crisis response below the fee.

it is a fair feed. it makes sense to do. it is nothing but the large banks giving back. and i think that that particular claim is unfounded. host: one more clip, from the other side of the aisle. this is candidates mitt romney on his prescription for the housing crisis. [video clip] >> don't try to stop the foreclosure process. let it run it -- let it run its course, hit the bottom, allow investors to buy homes, put renters' income of fixed, and led a turnaround and come back up. the obama administration has slow-walked the foreclosure process that has long existed and as a result we still have a foreclosure or hang. host: your reaction? guest: he is absolutely wrong. and if we followed his advice there would be a tremendous amount of pain people would go through. as i said, this foreclosure crisis macy 10 million homeowners the one to foreclosure by the time it is all over. and i think it is important for listeners to realize -- what a

foreclosure is, is that the or mommy going to their child and semi in this is not going to be your room -- daddy or mommy saying this is not going to be your room. maybe we can move in with grandma. i did not know will happen but we would the best weekend. he is saying to 10 million times. i think it is is callous in the extreme. if it's right in with what he said about not -- it fits right in with what he said about not worrying about poor people. it is a callous disregard for what people are going through. host of democratic line, sarasota. you are -- host: democratic line, sarasota. you are on the air. caller: i will not be sending to you today, susan. refinancing is almost impossible because of the mortgage servicing companies. banks are banks and we know

where they stand. however, mortgage servicing companies -- specifically out of texas and north carolina -- are impossible to deal with. you check the computer and you get the feedback that people have on them. every story is the same. send another document. send another document. that is every excuse in the book. my personal favorite is that the document must be in an imaging. it is nonsense. i thought that they were bad, which they truly are, but they will trade you off to another company that is a subsidiary of their own corporation based out of india. well, actually, florida is their base. but you cannot talk to anyone there. the people that run their call

center are very professional. they are in mumbai and banged the lord. they have the finest computer system in the world -- host: i think that we understand the direction of your story and frustration i am working with the banks. your response? guest: the caller has obviously researched this thing much more than others. sometimes, when you run into a problem, you become a pretty good student of the problem. he clearly has. i think that he is right. the heart of the problem is in the servicing center. banks, if they own the mortgage, if they retain the mortgage, you can get a modification. once you fall into the service contract, it is an endless number of needing documents, losing documents. i know so many people who have

wound up in the process of trying to modify their mortgage and they get foreclosed upon. this gets their attention. i think that the caller is right in identifying the problem as being the servicers. as i said earlier, that is where the services need to be. >> -- host: back to twitter -- guest: well, the banks have record profits. they have retained a lot of money based on not only the fact that they can borrow, turnaround, and lend money at record low rates. they are charging for everything from overdraft fees and something like that -- there are other ways to make money. there's quite a bit of profitability in a number of these things. the caller makes the mistake of understanding the elasticity of demand. this is an economic concept that has to do with how any bank is

able to pass on in the spaces -- pass on the spaces that they have to a customer. customer will respond by not using a product or service, if there is a pass through on the expense. if they can pass it on when the customer has a ticket, like gasoline, then they can pass it on. but i think that the caller needs to dive into economics a little bit more in order to understand how to handle increasing expenditure. and how it affects profitability. host: we are talking with the minnesota congressman, keith ellison. jeremy, you are on the air. caller: i have a comment -- comment for the congressman, but

i have something to say about the susan g. komen industry. i do not think anyone to have a problem with them and that they are not giving to planned parenthood. my comments for the congressman about mortgages, it is what you talk about with investment properties. i would like to refinance. it is frustrating for me, with the previous caller, there is so much paperwork that needs to be done that is expensive. every time i need a piece of paper, i have to pay 50, 100, $300 to get it done. i am lucky, yes. i only needed to refinance about $100,000. people might need to be envious of me for that -- sorry, i just did the right thing by making sure that i got a property that i could afford.

i am not certain of this, but i would wish that congress would just make sure that they are not throwing out the baby with the bath water in the desire to make sure that people are not getting houses that they should not be getting or that they cannot afford. they have also made it onerous and difficult for those of us who are doing the right thing and have good credit scores. i purchased a piece of property to refinance and keep the economy going. guest: let me assure you, i do not think that anyone envies you. if you are purchasing property and offering housing to people at a fair, rental rate, good, quality housing, that is offering a service. it helps you by making money, but it also helps the community by making housing choices. i want to explore this idea

that honest business people should be the target of envy. they should not and i will stand up for you in this situation. the bureaucratic mess it that you are running into is not government created, it is private sector created. they do not want to refinance if it will not be more profitable for them. you may have to be more diligent, you may have to pay more money for documents, but it is not the government. this is a private sector thing. i think that we should all stand back and ask ourselves how much of what we believe is ideology and how much of it is basic fact. i think you should be able to refinance your property for a lower interest rate at these historic lows. i do not see any problem with that. based on what you told me, i think that it is a myth that somehow government allowed people that could not afford to

get their mortgage to get a mortgage. you should know that there's something called a premium -- a fee that mortgage current -- mortgage originators would get if they put people to a higher cost. that is a private sector thing. you should also know the we are talking about no document loans, no stated income -- income loans. loans with prepayment penalties. this is another private sector thing. it is the private label that is responsible for all of these mortgages that ended up being offered as triple a, but were actually not credit-worthy performing loans. i think it is important to bear in mind. if this housing crisis was not

created by the cra - it was not even created by fannie and freddie, although they did exacerbate the problem after it got started, but it was created in the private sector. it is important for us to solve the problem, but also to understand how it started and where it started. host: the administration's plan for housing goes beyond mortgage refinancing package as. this is a cbs news story about it. in addition to the refinancing and introduction of a homeowner bill of rights, designed to ensure buyers and lenders are playing by the same rules, the pilot sale of foreclosed property is to be transitioned into rental housing. a full year of forbearance, pursuing a joint investigation into mortgage origination and servicing of uses,

rehabilitating neighborhoods and expanding the eligibility for the housing assistance program. >> very good news. i liked everything that i heard, but i wanted to highlight this issue of an investigation. i believe that it is important to investigate abuses in the mortgage market. in the span of this crisis, there has been fraud and misrepresentation, as well as all kinds of what i believe is criminal conduct. this requires an investigation. if i can take you back to the s&l crisis, there were thousands of justice department lawyers going after of uses in that crisis. now the justice department has about 50 people going after this one. my question is -- why are we

providing -- why are we not providing the justice department with the resources that it needs to get to the bottom of this worst financial crisis since the great depression? it goes back to some people's endless pursuit of cutting government. now we need government, we do not have the tools to get to the center of this serious financial crisis that is dragging our economy down. host: from twitter -- guest: well, the fact is -- his point is right. when mortgages were originated, the originators would not look at the loan to see if it is a worthy loan that will perform over the long term. they wanted to know that they could sit -- sell paper that could be securitized on the secondary market. we have risk retention rules that will help the proper

underwriting of a loan and an assessment as to whether the person can pay. plus, we have also taken out a lot of the incentives and damaging things that allowed these mortgages to take place in the first place. things like prepay penalties, yield spread premiums, and all of these things that are addressed in the financial reform bill. i think we will be better off because of it. host: related to this -- low -- loans were pushed out into the market, but instead of loan officers, we got brokers. next is a call from pittsburg, kansas. the morning. caller: you are one of the finer voices in congress. it is a pleasure to speak with you. we need to realize that we are in a worldwide depression, not just a recession.

guest: i agree. caller: the last person that tried to save capitalism was fdr. they reduced mortgages. of course, he was being pushed by a much more activist populous than we have -- all of the occupied movements sort of represented that sort of change. i would personally like to see a tax worldwide placed on speculation. and if we are going to save capitalism, we need to make drastic moves now. saving people's homes is a significant part of that. thank you. guest: i wish that these free market fundamentalists would lead us help in saving capitalism. the fact of the matter is that a transaction tax, i think it makes a lot of sense for a number of reasons. i agree with the caller. and i think that a lot of these

computer-generated trades that no one is thinking through, there is a certain algorithm that they hit to buy or sell, decisions that are made in an instant. i think we would get more from the market if there was some sort of transaction tax that we could put to good use, by helping people be modified their mortgages. >> -- we modify -- re modify their mortgages. host: we have heard comments about the susan g. komen foundation that seemed to be picking up steam. what is interesting about this to you? caller: up -- guest: i do take issue with the earlier caller. they are doing basically the same thing that they were doing before, but withdrawing money from planned parenthood, so what does it matter? it does seem that did -- the decision was made for political

reasons. be a's health should not matter of partisan political bickering. we should fund women's health screenings, and cervical cancer or mammograms, they are all important. to try to apply a political litmus test to planned parenthood and make a funding decision based on that, i think it is extremely unfortunate. a lot of people are very concerned about it in minnesota. i can tell you that even the mayor of new york has stepped up and said that he will make up the funding gap. there are literally millions of women all over this country who have received funds from planned parenthood, but no government funding goes into those abortions. i think that it is too bad that the susan g. komen foundation allowed themselves to be caught up in what i think should be

focused on health, not politics. host: mount vernon, new york. you are up next. caller: good morning. the problem, as i see it, is that the subprime mortgages would cause all the problems. you did not have to prove that you had money or a job. you had nothing and you walked out with a house. guest: i agree. caller: when we get in power, the president, all that he talked about for two years was health care. you have to buy health care. how're you going to buy health care if you have not got a job? i do not understand. how can people uplift themselves? the government does not have a way to make money, other than to

tax people. that is the only way. guest: let me tell you this -- i wish that there was only one problem for us to deal with in congress. i wish that we could only focus our attention on the housing crisis, but we also have a health care crisis. we had people going into bankruptcy because of medical debt and all kinds of problems with the health care system. not to mention, we also had questions about civil-rights and all kinds of things. when you make the case that the government should not have focused on health care, but should have focused on the subprime mortgage crisis, it would be great if we had the luxury to deal with one problem at a time, but we simply do not. thank you for the call. host: i have a question by e- mail from dave in minneapolis --

guest: a good question. it went to the insurance company that charged it. that is a question that we have to dig in to. but you are not asking you that, because it is an obvious and deeper question -- who did it really protect, given the enormity of the crisis? it is one of the things that we can really dig into. getting the full benefit of that. i hope that that is one of the things that we can really dig into. host: the president's proposals need to become legislation, what do you see there? guest: i am an optimist by nature. democrats and republicans, getting together to address the problems that we are facing. housing foreclosure is a key among them.

unfortunately, this week we have tried to take away long-term care preventions and tell the cbo how to deal with, unfortunately this week we have not gone to the heart of the problem, but maybe next week we will. i believe that everyone in congress can do the right thing and for their constituents, i will keep on expecting that and i will say something about it. i am ever hopeful. host: thank you, congressman. guest: thank you. caller: we will take a break, and we will continue the conversation, but from the other side of the aisle. we will be right back. ♪

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this weekend, on c-span 3. >> "washington journal" continues. host: meet congressman david schweitzer, -- david schweikert. we will continue our conversation on the housing crisis in the country. arizona has been particularly hard hit. guest: a lot of that was we overshot. we have lots of investors. i am optimistic. in looking at the multiple listing service last weekend, we saw that there were certain priced at. under $30,000.

this gets into the policy side of lenders with inventories there seems to be a very active first-time home buyer investor market right now in arizona. you are starting to see velocity in the market. >> we are waiting for the unemployment numbers. how is arizona fairing? >> they are getting better. we are getting success with businesses migrating into the state. we just picked up another bank moving operation. we are working hard to make arizona business friendly. we run around with signs saying

that arizona is open for business. host: we announced -- we brought you in to officially -- to talk about the president's plans for closing costs. what do you think of the idea? guest: the devil is in the details. this is the third or fourth version of one of these proposals, and they have not been particularly successful. how do you take folks who are on the edge that are struggling to make that payment, but because of negative equity, they have no access to refinance? what if their loan is not held by fannie mae and freddie mac?

but it is held by a private label loan? we have populations out there that cannot be helped by these programs. host: what is the objective, objectively? what is the goal? guest: it is a classic case of being on the buying side. if they are paying on a mortgage with a loan that is worth more than their house and- equity, it is devastating to your personal net worth. the housing market in arizona is getting better. years of certain price categories grinding it out. the way that the foreclosure moratoriums were done with other

government policies, we took what really was a three year housing depression and made it a six year -- in our attempt to help, we have actually slowed down the excess inventory. a good example is -- we did some charting about one year ago on foreclosure moratoriums. we said we would not foreclose for the next 90 days. prices went down even more, because there was an anticipation that there would be a wave of inventory coming to the market. making it worse for citizens. host: mitt romney believed that

the market should play itself out. do you agree with that? guest: that needs to be the cornerstone. there are a number of things that can be done there in terms of policy. should there be a mechanic where someone decided that they could not make their payments, but is there a way that they could do it to lease back the property? even if they were negative, they could step in and participate in the interest rates? but the devil is in the details. people often forget, you may be making a payment, but is someone on the other side receiving that payment? the teachers' retirement fund for pension, you and i get to go out and refinance, which is a good thing.

understand that the person with a pension is going to wake up with a recommendation because of lower interest rates going down. you just shift the dollars. host: john, indiana, good morning. caller: i wish that republicans and democrats would quit lying. everyone in congress deregulated everything and they let the problems come here. looking at these other policies, if it were not for those, we would have jobs in the united states. quit trying to tax the american people. the rich, the poor. let congress take the pay cuts.

let congress do away with health care. all of you guys and the stupid host: i will cut in there. guest: a lot of the economic disaster we have seen really is because of governmental policy. as we have learned, it is more complicated. we often have these discussions sang it to do this or that, to try to get your head around this scale of the debt, the size of the problem. digger member last summer by the president went over and over duke press conferences about corporate jets -- do these press conferences about corporate jets? it was purely political theater. that is the biggest sin of

washington, political rhetoric. host: the congressman has an m.b.a. from arizona state university. he was in the state senate before coming to congress. joe, an independent. you are on. are you there? caller: good morning. i have a thing for c-span and susan. guest: this may about to be get too personal. caller: i would like to take more phone calls and less tweets because you can pick and choose. it host: your question, sir? caller: that is that. you can see the bias when you pick and choose the ones to read. c'mon. look at the situation this

country is in, really. no, really. guest: they are very egalitarian about the tweet, messages, and phone calls. they are very random. you never know what is about to come in on the call. host: dfw_librarian, off twitter -- guest: you need to back up a little bit. within the mechanics of the document when the lender did not have the appropriate documents, when there was litigation and there has been holed new standards being set up, if you run into some interesting mechanics there.

was the debt owed? was the debt or making payments? you start getting into the technical things. they did not have the paperwork properly lined up, but the loan was delinquent, and what recourse was there? there are much stricter much more disciplined practices with the new servicing standards that were published out of the fannie and freddie several months ago. telling usroducer's that the employment numbers are out. the economy added 243,000 in the unemployment has dropped to 8.3% according to the bureau of labor statistics. your reaction? guest: absolutely wonderful.

the number we like to track out of our office is employment participation. how many of our friends and neighbors are in the workforce? it's a great concern to me that so many of our productive workers have basically quit and it has created a shadow in the unemployment numbers. a lot of that is just because people have given up. host: old orchard beach, maine. caller: i am encouraged by the employment numbers, but i wanted to share that when we got off the phone in the late 1970's interest rates were rising. i was wondering if you wanted to comment on how it is in the federal reserve. it gives no one motivation to buy a home. interest rates were rising before the next guy bought it, so you could lock in the rate. we fought hard, so it is not the

interest rate necessarily that are encouraging people to buy homes. guest: what year was that? caller: 1978. host: i remember 8% being very low. guest: about my very first house in late 1980 and i was paying my 12% interest. many times, what you saw was bad public policy and economic policy because of the inflationary cycle, we all went out and bought and perpetuated the cycle. you saw what happened modulate 1980's. we went through another brutal cycle and my greatest fear is we are in a cycle living on artificially low interest rates. there is very low incentive to save.

some of that is because the twist in other federal reserve policy and a lot of it is going on with the middle east and europe. we're seeing massive amounts of capital moving in to the sovereign debt markets. when will we start to change? when will we see those dollars migrate back to europe? how much trouble will we be in when interest rates go back to normal? are we almost creating a bubble on the river side where it makes sense to go into debt because interest rates are so low when they start to migrate back up and we hit the wall there? one concern is when you have artificially low interest rates, it may be stimulative to the economy, but even that paying the price, and often that is inflation. host: next up, a call from

georgia, an independent. you are on the air. good morning. caller: actually i am a libertarian. i wanted to correct the record. earlier, rep ellison was on, and it's great to see a congressman who archly understands the economic concept of the elasticity of demand. he tried to portray the genesis of the housing bubble as being created by the private sector. it is it 180 degrees of the reverse. the low interest rates promulgated by the federal reserve couple by the encouragement by the to increase housing purchases by people who should not even be buying them in the first place. let the market responded to that. the markets can only respond to the market, weathered his government or naturally created, but it can only respond to

whatever is there. i do apologize for some of the things they did, the creation of the subprime mortgages, the rating agencies to help promote them, that was all bad, but the genesis was the government, not the private sector. that is the point that needs to be brought out. he was wrong to promulgate an accuracy like that. thank you. guest: look. i lean towards your inclusion. government policy often creates incentives and disincentives. you look at the policy of going back for the last 30-40 years, but particularly the last decade when there has been incurred and to pursue the american dream, makes, affordable -- make homes affordable and offering this out to people who would have much more difficulty paying those loans, there's no

question government policy promoted and blew up much of the housing bubble. we see that with many things in the farming world and many others were to look at government policy, but we create artificial demand and when you do that, you will get a bubble. host: more details from the bureau of labor statistics. non-farm payroll grew by 243,000. guest: it will be interesting to see the look at the break out and see how much of that is export manufacturing. host: i believe the auto

industry is -- and guest: it's a little early to get the employment tabs on that. host: automobile dealers were up 7000 it just on manufacturing, but that's the retail. cape cod, mass., good morning. but cliff? are you there? caller: yes. i will make my call very short, but i have been a mortgage banker for 30 years, so i have seen two or three ups and downs of the cycle. the government programs, due 5 + and open access, one for freddie mac and one for fannie mae. there are some guidelines on the programs and i will give you a few examples and then you can react. one of the first is that there

is a fico score requirements, a minimum of 720, which means if anyone has had a late payment in the last year or so that they will not qualify. in addition, you're not even allowed to be eligible for that program unless your mortgage existed prior to march 2009, meaning anyone who has had a mortgage within the last three years is ineligible for the program. in addition, if, during that time, you wanted to take a first or second mortgage, they're only allowed to refinance the first mortgage. they are not able to merge the two together is. the last issue is the fha program. there is a streamlined fha program that has been put in place allowing them to refinance their loans with reduced

augmentation, but instead of being able to transfer the existing private mortgage insurance policy that only cost them roughly 0.5%, when they renew that they're being charged triple that on the new fha policy which makes it very difficult for them to qualify under the guidelines that require a deduction of the principal and interest. guest: this is a discussion we have in our office literally every day and in the scottsdale office back in arizona and literally their life was spent in helping people do everything from short sales, refinancing, and we help them navigate your lot of these roles. saying,ear what you're you're making the argument was often the government sponsored program and of becoming mazes.

understand what is going on over at the fha. they have had an explosion of market share. they're supposed to be holding about 2% hard capital. the fha program is substantially a loan guarantee system. today they hold point to 4%, less than 25%. -- they hold .24%. all of a sudden, then they will require a bailout. we are now walking the edge on these programs. we desperately need a private market to once again be up and running. out of our office, we have been spending months tried to get the what the rules would look like and flexibility, the mechanics, an investor would

need to get that to work. it has been a fascinating experience. as soon as you think you have it down, there is always one more issue. host: albany, ga., a democrat. you are on for congressman schweikert. caller: thank you. i have a question. you kind of touched on it before. it was concerning turning the properties that are about to be foreclosed into rental properties. i think that is the way to go to take some of these houses off the market. filling in the blanks you could have would be is that you offer people a long-term lease and it would expire in five years or when the property value is equal to what it originally started out to be.

then the have the option to sell the house or get a mortgage again. i wonder what you think about that? guest: you should be in congress. we're looking at a variant of that. but there is one i have great enthusiasm for, but we do not know all the mechanical details. it would be for fannie and freddie, and we believe they hold 200,000 single family homes that are already foreclosed upon. the government is not a good property manager. i do get these back into the hands of the community? -- how do we get these back? to resell them in a larger block with the restriction of the next year for them to be rented? part of the mechanics is, when that happens, the house has to

be livable, it has to be fixed up, it needs a new roof. the other thing more toward what you spoke of, and we have been working on this in the office is that if someone is going to get foreclosed on, we do not have the mechanic to fix it, so should they be able to save here is the deed to cd the foreclosure expenses and we would like you to stay in the home, raise your kids, but with that, here are the world's to operate under -- rules to operate under. we have tried to make it look like an investor screen. you do not want to create the moral hazard where people do not want to pay their payments because they can still stay. host: the nevada caucuses this

weekend and we will have the speeches on our network after the results are declared saturday night. it will be a little late, but it will also be on the web site the next day. the arizona primary is followed and handicapping for us. have you endorsed anyone? guest: we have not. i actually like a tough and rumble primary cycle. it toughens them up and makes better debaters. they have all sharpen their skills and messages. let's face it. this will be a really tough general election. we need to make sure the candidates are well vetted and ready for the battle ahead. host: from presidential to congressional, a lot of people are watching to see what happens in your district. you have added a seat. there has been redistricting.

guest: it is always topsy-turvy. arizona has an independent districting commission. if you look at what they did, it was anything but independent. there's still a chance that the legislature, through a vote or court action, that the lines will change again soon is trying to build your house on sand. right now we are all in different districts. ben is a friend of mine, and we're both freshmen from similar areas. as we see in many parts of the area, this decision to pick up and move it to run in a different district, we are already up and running. we are campaigning in getting ready half of it is new to us, half of it is ours, and who knows what it will look like in one month?

host: at your prepared? guest: -- how do you prepare? guest: you tried to tell your message and you just expect that to come. host: if you end up facing ben quayle, what do you think? guest: we are very similar ideologically. we will get really into the mechanics in great detail. it will be a joy. host: roseanne barr has announced her candidacy for president in the green party. it will be selected at a convention in baltimore in july. guest: [laughter] you have to love american politics. if anything, it is entertaining.

host: los angeles, you are next. caller: i am a real tour. i have been 1 for 34 years. i have been a legislative bill reader. guest: you are a gotten an for punishment. caller: i am also an expert witness certified by the superior court. one of the things that the people in washington do not seem to tell people is when a bank gives a loan, it is structured to be resold. it is structured to be resold to fannie mae or freddie mac. they are the ones who set the criteria. if there is a deficiency, that is where that lies, not the bank, okay? that is number one. second, we have a mortgage-based economy. they were sold and they were like gold.

there were a lot of problems and dishonest dealings. number three, i have access to multiple listing services. there are so many short sales, you cannot believe. when we plebeian permission from the title company, we get the last three, four, or five years sales. people buy, refinance, refinance, buy properties come on and we were bailing those people out. when you make a contract, you say that you're going to do something. you are responsible for your actions. i am understand when people lose their jobs. that is absolutely something we cannot do anything about, but we should not be bailing these people out. there was a restoration trust back in the -- guest: the trust corporation.

i should also tell you, i have personally been in the real- estate business for 30 plus years. my specialties have varied over the years. this may be a bit geeky, but you can talk through the process of what happens when you take out your home loan. what percentage is owed by the lender and what goes off into securitization? before the real-estate collapse, we had a very healthy private-label market that would collect the loan and package them into bonds and sell them. today, what has happened is that fannie mae, freddie mac, fha and represents in the high 90% of all loan aggregations, bonds, and selling.

that is ultimately a very unhealthy because you end up with the government insured bond where you ensure your neighbor's lawn and your neighbor ensures yours instead of private insurance and other ways to do this mortgage insurance. we also have to deal with policy issues. when you walk in the door and put 10% down to take out the loan and you promised the investor may be a pension fund or someone else the deal on your home long, should you be allowed to take that equity out? you just need permission first. what happens then? we have no equity left in the home. what does that mean for the value of the bond? the difference is a multi layered bit of financial work that affect every homeowner. host: just a few minutes left, and i wanted to get your reaction as a member of the financial-services committee

about the story in "the new york times" this morning about the sec and big banks. here is what it says. they repeatedly about the biggest firms to avoid punishment specifically meant to avoid fraud cases. guest: i have seen the article, but i have not seen the details behind it. maya understanding is that some of this may be an investigation that happened last year of an action that happened almost one decade ago.

it is an interesting juxtaposition. you definitely want the banks to start doing more lending, more philosophy, more into the economy, and at the same time, if the sec were to maximize sanctions, how much of a dampening effect would that be for the economy? if the lender, or any organization, has broken the law and has done it maliciously, they need to be penalized, they need to be punished. if that is something where they brought the permission to the regulator and they have fixed their ways, then you also need to take that into consideration. sometimes we find stories like about in the details when you break down what has gone on there really do not hold up the headline. host: congressman schweikert is with us until the top of the hour. next caller, you are on. caller: i agree with the last

caller. our government should not be bailing out the people losing their homes. i will give you my personal example. in the late 1980's the city of philadelphia went bankrupt. i had a property, and i worked at a bank that tries to refinance my five-year lease purchase and they told me my house was not worth the amount of money that i paid for. was $50,000 less than what i actually paid for my home. it is only worth $148,000. but host: let me bring you to

your point. why you believe there should be this? caller: it is not fair to the people who have already lost their homes. it is crony capitalism. this is set up to be responsible and when people go in, they cannot pay their bills and they get lost. guest: this gets geeky again, but there was one foreclosure and that was the one of real estate transaction, it should not have been used as your appraisal value. but in the lender you were working with gave you the opportunity to appeal that or do the opportunity to go find other market appraisals. i used to chair the state board of equalization sit which is basically the appraisal evaluation court of arizona. host: here is the headline from this story, eric holder yesterday before darrell issa's

committee, a spar over fast and furious. this is a hometown story in arizona. do you agree with the criticism of the justice department? guest: i think you have to. this is in our backyard. we take this a bit personally. when you hear the story and the heartbreak, these guns are now popping up on both sides of the border. we have now had them resign over this. we your people you have been involved from arizona are not disclosing because of possible incrimination. it is amazing that we are one year into these types of hearings and we are still document. how could you not be frustrated with this justice department?

host: last call from kansas city. caller: good morning. the problem is investors cannot buy these homes. regular people cannot buy homes that are in their condition. if you resolve the problem, all of these homes will disappear across the market in no time. but the this is a simple solution. i do not know why people are over thinking it. you need to release them -- and by that, i mean allow them to buy from the banks, or let the average citizen buy a house that has been foreclosed on because the houses need repairs. the average person cannot make those repairs. guest: patrick, you hit the nail right on the head. there is a value to this philosophy on the market. i buy a