be here today. the topic is what's the future for homeownership and there's really two answers to that. what will be the future and what should be the future? turns out what should be the future, i want to echo what brian moynihan said, the pace of the united states. the united states. i think that's fundamental to the degree to which we recover in housing markets across the country. i have been to a variety of different markets for events 20 sort of look at this. sacramento, phoenix, columbus and the nature of the recovery differs greatly but the pattern that emerges is one in which the broader based economies recover better than those which are narrow and the reports cannot be overstated. the second which doesn't get talked about as much which i think is very important to the future is immigration which is central and one of the underserved policy topics in the united states.

the native-born population of the u.s. doesn't have replacement fertility rates so all future population growths comes from what we choose and this is the issue over the longer term, so those things strike me as central as to how it will work out. seems to me we have a couple things. first is to recognize it is time to look forward. this crisis began years ago now, and i was once in the camp of designing very clever policies, i promise you they were very clever. al solved all these problems, but more policy and inknow vacation and programs and intervention i think is now

making it too difficult to figure out what the rules are and move forward. more policy innovation. that is making it difficult to figure out what the rules are. it is time to let markets clear. that's point number one. the example is the basil three zero courts and the implementation. if you look at the credit implications of those rules verses normal lending circa 2001. we're on track to thrive for 25% fewer mortgages then if we have the standard for 2001. it is happening right now as we go forward. what are we going to do? providing shelter for americans should be the central focus. those in need of shelter should have opportunity for that. i believe there are two things that will end up being true. americans will not give up their deep love of the 30-year fixed mortgage. maybe second behind children. we know that the model is

broken and we have to, but something different. whether there has to be a friend end subsidy. it may turn out that that is true in a weak housing markets. do not subsidize in an open- ended fashion. not toward those who become heavily indebted. let's have something that rewards equity investments.

that is briefly the lay of the land. >> my name is janis bowdler. my brief opening comments -- demographics in this country are changing and that has huge implications for the housing policy and our service and our policy. those borrowers don't just look different. they have different credit profiles from what we have seen in earlier generations. we know how to do it sustainable home ownership right. let me touch on each of these issues. the demographics issue already came up.

let me put a fine point on this. 70% of household growth will be driven by households of color. half of all first-time home buyers by 2020 will be latino. there is no one ethnicity that dominates currently. we are seeing a dramatic shift in our population. if the systems cannot accommodate that, we will end up with lopsided policy. very different profiles. we have to think about meeting these households where they are at. latino families have seen double-digit unemployment for a couple of years now.

latino families lost two-thirds of their wealth because of a decline of home values. that's a different profile. think about what they will meet when they enter the market looking for a home. think about where our students are. i saw a report that student loan debt is going up $3,000 a second. they are overleveraged already. their credit profiles will be extremely different. do we just shrink the market or

think creatively about how to make sure these borrowers can be accommodated. that brings me to my last point, which is sustainable home ownership. our conversations have been dominated by the responsible borrower. we make sure only responsible borrowers are able to get a mortgage. that question implies the run-up to the crisis, we can debate the causes later until we are blue in the face. it implies a simplistic answer to the crisis. that ignores the systemic issues that we were dealing with and makes it a more simplistic answer then will we know is a complex situation.

the right question is, how do we take those models and get them to scale so that we can build the most inclusive market possible? so they are able to get a loan. we are not talk about fancy and wildly creative things. we are talking about 30 year fixed mortgages. we have seen that it works. it only behooves us to grow the pie. as we think about our immigration policy, we need to think domestically what is going on with immigration

debate. if we see 11 million people in this country earned a path to citizenship, that will have serious implications as housers. we need to be thinking about that as well. tom? >> he has slides. >> i have a few slides i want to run through. my name is tom deutsch and i'm with the american securitization forum. i want to put in context where we are in terms of credit availability. just to provide some backdrop of where capital comes outside the banking sector. think about mortgage lending. you always do with the local banker. those days have been gone for a while.

most of the credit availability does not come to the banking sector. the capital does not come from bank of america's pockets. knows is coming out of fannie or freddie or fha. this provides a backdrop of global securitization around the world. the u.s. is a heavy user of credit products.

europe is a distant second. it gives you a backdrop of the credit availability. this gives you some backdrop that the markets in the united states have come back to an extent if you look at the various asset classes. not as many people buying cars. the market is functioning. most of the student loans are going under the government's balance sheet. different loan obligations -- this data is a little bit old. $50 billion and that market is rapidly returning. this is the slide that

everybody talks about, the dramatic change in how mortgage credit is made in the united states over the past six years. securitization of volumes have gone up by $300 billion in the past six years. private credit is a huge volume. $700 billion put through the private label security system. $22 billion is overstating it. of all the slides i have, this is the most telling about where the credit is coming from. it's coming to fannie and freddie and fha. 90% of loans are effectively being guaranteed by the government.

it is not just a u.s. phenomenon. europe does not use a government-backing program. there are some there is backing stithy banking sector -- there are some -- much is retained on their own balance sheet and their pledge to the european central bank. freddie-t fannie and like but still has a government backdrop. japan, australia, rbs is part of their markets.

that gets you back to where the u.s. is now. you have an outstanding mortgage stock in the united states. some of this data is a little bit dated from 2012. but it gives you some snapshots about where the delinquencies are. something like a quarter have an underwater nature to the mortgage. there are still some challenges outstanding in the markets. where is the credit going to come back into the system outside of the fanny-freddie model? there are lots of calls. you hear from jeb hensarling. fannie and freddie and the fha

have to be drawn back in some way. how do you do that? this provides at least some of the basic high points of where is it that the private capital is going to come from. if you have a pension fund, you put that money into the u.s. housing stock market. do you lend that to borrower? do you want to loan money to people at 4% to buy a house? the government may be doing that. the private markets say they will put the money somewhere

else. kind of japanese product. the liquidity it moves pretty quickly. you'll start seeing the private capital come back in. that creates more risk for the money you put back into the market. that's a quick overshot. think about the 2006 volume. how do you bring some of that back? do we want $200 billion?

$300 billion? >> i want to build on some of the things that others have said already. i am ellen seidman. a couple of additional points about why we should not settle should 10% less than 2001 level mortgage market. we do run the risk of facing future policy on a very strange last eight years and we should not be doing that. leading beside the aspirational issues, if we do not keep the housing market ladder robust, it becomes difficult for people to move up and for people to move out. that has significant effects on

the economy. the boomers are going to release somewhere between 10.5 million and 11 million homes in the next 10 years. who is going to buy those homes? if we don't have a system to buy those homes, it is going to be a difficult transition. it is different in different locations. an interesting implication is for years we have talked about the importance and this was a critical element during the impression when fannie was created, the notion of having a housing market that was the same all across the country.

now we are recognizing we have different markets. what does that mean for the housing policy? that is a huge question. i want to talk about rental. one reason we ended up with a push into home ownership -- the crazy boom of the early 2000's was heavily a refi boom. we were doing rentals so badly. it is time to recognize that and to fix that.

for a third of american households are renters. million renters will added in 2011. this is an even greater percentage at the lower ends. vacancy rates could decrease to 4%. the number of low-income renters has or grown but we have lost 12% of the low rent housing units. we are due to lose another 900,000. we need to fix this problem as well as the home ownership problem. they are two parts of the same coin.

almost everybody rents before they own and many people rent after they own. i have four points. we have to fix the simple availability of a lower rent. we have to stop the continuing loss of affordable rental units

to conversion of demolition. we have to figure out how to have consistent financing for non luxury and smaller buildings, which is work a huge percentage of the affordable stock is. we to think about some alternatives between rental and ownership so that you can have shelter and some appreciation but you do not as acela have to take on the full loan. >> brian mentioned resetting policy. we have a tradition of promoting home ownership at the policy level. google is a powerful thing. you can fine speeches that are indistinguishable from each other. a home was a man's place that we needed to support after the

1990's. it was bipartisan. "we strengthen our economy and build better citizens," said president clinton. some of the statements are overstated on the importance of home ownership. it peaked in the middle of the last decade. some countries have similar home ownership rates than we do but doesn't subsidize as heavily. other countries have lower rates. it is not a key ingredient for a strong economy contra to the

last hundred years of speeches would suggest. it is how we should apportion the subsidies between home ownership and rentership. i want to focus on the tax side. for's the biggest source subsidies. the mortgage deduction was about $80 billion a year. the exclusion of capital gains was about $20 billion. that is a significant amount of revenue. there is scope and need for

rethinking the distribution of our net subsidies across home ownership and renting. you look for a market failure and there are some in the literature. there is some evidence that home ownership increases tenure and investment in local goods. i would offer some counterpoints to this. it is difficult to know whether home ownership is leading to these positive outcomes. it is a difficult thing to know.

it does cut both ways. this was alluded to before. it could make you less mobile. that suffers from the same problem as the counter studies but it does cut both ways. if we think we should be leading into home ownership, we are not going about it the right way. we have a very clunky policy. is subsidizing bigger homes and more energy used. there are better ways to do it. there are a lot of plants on the table -- there are a lot of plans on the table. >> thank you.

we will take some questions now. the answers tight -- keep the answer is tight. i want to get back to the point -- if you take financial security out of the equation and that, people are getting into a home as an investment, you begin to talk about subsidies. when you talk about getting rid of subsidies, do you believe the fed's purchases are a subsidy and a subsidy that should continue or go away? >> i think they are a subsidy. the goal was to have a channel to expand economic activity in

the united states. beenld argue it's minimally successful. it's hard to do and it will signal success. it would mean that we're growing. that will happen once the fiscal side gets going. let us take a moment to pray. >> should there be more -- we talk about renter nation. now the attitude of the newer generation is that renting makes it more affordable with less risk involved.

then why bother? do we deceit rental subsidies -- do we need to see rental subsidies? >> take a look good the numbers. it will cost about $131 billion in 2012. that's more than all of the hud outlays. they were $40 billion. which is need to equalize some of the stuff we are doing already.

i would get push back on this from doug. the only part of the panoply of programs that is producing rental housing for lower income families is the low-income tax credit. >> you are so wrong. >> new construction is down. it is producing it heavily in terms of rehab and renovation. an awful lot of that stuff is in markets where if the use restrictions are allowed to expire, it will be lost for low-income families. another piece that got lost about investor owners of small properties is that one to four- family buildings that have

relied of rental units in them were always financed as single- family homes. it is hard to get financing for that kind of housing now. a lot of it needs to be rehabilitated or refinanced. we need to figure out how we can effectively finance those small buildings. it is up to 50. that is not a subsidy but paying attention to how the financing system affects rental, and rental that is not luxury rental. >> it will be largely hispanic. during the housing boom, hispanics and blacks were targeted by mortgage lenders and in some cases terribly fraudulently targeted. do you believe the safeguards

put in place are sufficient going forward to serve the population that is coming in? >> i think dodd-frank did a great job of taking care of the retail abuses that we saw. i think we will see a better market going forward. how to make sure good products are available. we still need to make sure there is enough liquidity to make good products available and enough incentive for those good lenders to market and locate in the neighborhoods where communities of color are. predatory lenders moved in to fill a vacuum where could it

lenders were not serving. we need to make sure the housing finance system makes good products acceptable -- accessible going forward. >> counseling is critical. it's been almost entirely

>> i think there was a moment where there was a possibility for change. to start the film out of that feeling that voices were bubbling up, coming up to the surface to say, this is not

something we can accept any more as a normal part of our culture. >> she gathered essays and personal stories together in bully. find a more "book tv" online. >> now, president obama on the school shooting in conn. he said it is time to take meaningful action. he was first notified by, and security adviser john and brennan. this is five minutes. >> this afternoon i spoke with gov. malloy. i offered him my condolences and

made it clear he will have every resource he needs to investigate this heinous crime, care for the victims', and counsel the families. we have endured too many of these tragedies the past few years. each time i learned the news, i react not as a president but as anybody else would. as a parent. that was especially true today. i know there is not a parent in in america who does not feel the same overwhelming grief that i do. the majority of those who died today were children. beautiful little kids between the age of 5 and 10 years old.

they had their entire lives ahead of them. birthdays, graduations, weddings, kids of their own. among the fallen were also teachers, men and women who devoted their lives to helping children fulfill their dreams. our hearts are broken today. for the parents and grandparents, sisters, and brothers of these little children, and for the families of the adults who were lost. our hearts are broken for the parents of the survivors as well. for as blessed as they are to have their children home tonight, and they know their children's in essence has been torn away from them too early and there are no words that will ease their pain. as a country, we have been

through this too many times. whether an elementary school in new 10 or a shopping mall in organ or a temple in wisconsin or a movie theater in aurora. these are our neighborhoods and these are our children. we are going to have to come together and take meaningful action to prevent more tragedies like this regardless of the politics. this evening machel and i will do what i know every parent of in america will do, which is how our children a little tighter. we will tell them that we love them. we will remind each other how deeply we love one another. there are families in conn who cannot do that tonight. they need all of us right now. in the days to come to those communities need us to be at our best as americans.

i will do everything in my power as president to help. nothing can kill the space of a lost child or a loved one. -- nothing can heal the space of a lost child or loved one. we are praying for them. did the love they felt for those they lost in doors not just in they're memories but and hours. may god bless the memory of the victims. hearted, andken bind up their wounds. >> john boehner and majority leader harry reid as well as other members of congress have expressed shock at theand ferede families of the victims.

it happened in the district of chris murphy who is about to become the next senator from connecticut. earlier he said he was praying that it would reached safely quickly and he said his thoughts and prayers were with the families and victims. the president has ordered flags to be flown at half staff until december 18. an anti-gun prayer vigil was held outside of the white house. it has been reported 20 children died in the school massacre in newtown. participants called on president obama to address gun violence. >> today is the day. today is the day. >> today is the day. >> today is the day. >> today is the day. we are going to call for a

moment of silence. all of us that have candles, we are going to ask you to lift the candles as a career -- p rayer to the children who lost their lives today. let us pause for a moment of silence. let us lift up our candles as a light shining in dardanus. as a light shining in dardanus' all across this country. we can change -- as a light shining in darkness. we can change pain into joy. we can change the sarraute into gladness. today -- the sorrow into

gladness. lift up those lights, brothers and sisters. let the lights shine so everybody can see that today is the day. mr. president, we are calling on you, citizens who voted for you,

who gave you in another term to lead us, by the state of the union address, please let out a plan of action to how we may address this scourged of gun violence in our community. it is not just in our inner cities. it is not just in the urban settings. it is not just in the suburbs. it is everywhere. we cannot the scape the scourged unless you lead us, mr. president. we call on all members of congress to encourage. the country is with you. lead us out of this shadow, out of the dark valley of the shadow of death. lead us. lead us even when the men fail us every time.

we call on you, our god to comfort to the hearts of every mother and father who have lost their child in newton, connecticut today. comfort the hearts of the mothers who lost her son of in chicago today, who lost her doctor in philadelphia today, -- daughter in philadelphia today. in new orleans, alaska, missouri, alabama, all across this country. comfort our hearts and bring us out of this dark, dark place of sadness. give us courage that we may act. give us a wisdom that we may act together. give us peace, for use a blessed are the peacemakers, for they

will be called your children. we ask for your divine wisdom to descend upon this place. let us as adults model the peacemaking that we so long the. we will continue to look to you, our god, the god of all peace. in your name, we pray. we shall overcome. ♪ we shall overcome ♪ sunday. -- someday. deep in my heart i do believe we shall overcome someday ♪ ♪

>> on news makers, cathy mcmorris rodgers. she spoke about the school shooting in connected to it. >>-- connecticut. >> i am a mom and i have two kids. it is really hard to imagine. i think we have to -- we need to find out what happened and what drove this individual to this place. we have to be careful about suggesting new gun laws. we need to look at what drives a crazy person to do these kinds of actions and make sure we are enforcing the laws that are currently on the books. yes, we definitely need to do everything possible to make sure something like this never

happens again. >> that answer has been given by democrats and republicans alike this year after the shooting in colorado, more recently last week in oregon. if it is not gun control, then what about mental health and troubled youths who decide to do this? could congress discuss this issue a denture a more serious way? >> we need to ask those questions. we need to search for the answers. that is part of what we can do a in congress. we can hold the hearings and dig further and try to better understand exactly what happened and what drives individuals to take the lives of the innocents this way. it is very important we ask those questions, get the answers so we can prevent these types of situations from happening.

>> "newsmakers" this sunday at 10:00 a.m. and 6:00 p.m. eastern on c-span. >> next, your calls and comments on "washington journal." than a discussion on the future of syria. a forum of the impact of the latino population in future elections. >> i wanted to explain how this totalitarianism happens. we do know the story of the cold war. we know the documents. we have seen the archives that describe relationships between stalin, church hill, and truman. we know the events from our point of view. i wanted to show from a different angle from the ground up, what did it feel like to be

one of the people who work subjected to this system. how did people make choices and how did they react in the cave? one of the things that has happened since 1999 is the region we used to call eastern europe has become differentiated. these countries no longer have much of in common with each other. >> from the end of world war ii through 1956. from "iron curtain" on c-span a &a. >> how states are bracing for sequestration. the schedule for january affecting many agencies and