also, correspondent sharyl attkisson on her book, "stonewalled: my fight for truth against the forces of obstruction, intimidation, and harrassment in obama's washington." ♪ >> good morning, everyone. congress is on holiday break, and president obama is on vacation in hawaii. in new york, ity police officers are on alert across the nation. divide the we will lines. law enforcement, we want to hear from you. please call us.

also, join the conversation on social media. you can also send us an email. [video clip] think that people can express their desire for a be en society, but they can no violence -- especially no violence against those who protect us. they must be respected. most important reflection i can give you right now is -- in this tragedy, of be we find some way would be rward that and the appropriate way to honor the fallen officers. knit our city together.

i've always believed that we can. there's no doubt in my mind, we are moving towards a day with harmony between police and our community. and to the commissioner, to his credit, he has devoted his entire life to this mission. i've learned from him every day how much perseverance it takes to get there. away ve to move people from anger. have to give people face of the concerns can be heard across the spectrum. we have to move forward. it cannot be the city that is as the o be used division. the headline on the post this morning.

people do not have respect for authority at all. in politics -- i was in charge of public safety. people need to have some respect for law enforcement. host: all right, gene. other way -- e those protesting to say the police need to have respect for communities? caller: they do have respect. if people put their arms up, and do what they're told to do. host: carl next. like to say -- a police -- i talked to him about the situation.

in any form.racist slice of are just a the community, they are just like us -- you got some bad ones, but not that many. i would like to say to barack obama, jesse jackson, al sharpton -- host: we're getting your is going on in t new york. what you think of the situation. by have divided the lines law enforcement and officers. here's a story on newsday.

on to say -- and union generated message warned officers that they should respond to every radio call two cars -- and not make arrests unless absolutely necessary. the present effective union work in threes, where bulletproof vest, and

keep aware of their surroundings. at the same time, in a memo from the nypd chief asked limit their comments, in all venues, including social media. a so, the new york times was similar story -- excuse me, the wall street journal. in this piece in the wall they say that , the shootings has led to soul-searching and other police departments. in pittsburgh, police will not use single man vehicles.

david, in athens, georgia. david, good morning. is a shame hink it that you have what you have. think it is partly because of and eric holder.

they really got this thing going. and why to have how sharpton and their -- in the white house for the an antagonist blacks. which, i hate to say, and i don't mean to be racist. to step back.d you some ant to show tweets. reverend al sharpton -- i'm outraged at the killing of two police officers in brooklyn. that is why we stress to violence is the only way fight for justice. from george pataki --

paper f opinions in the this morning, about the finger-pointing going on.

jeff, llaw enforcement. jeff, what you do? police officer? caller: yes i am. a rst of all, yyou put on good show, but what do people not get -- i work with these people who call themselves dedicated offices. you get all kinds of people. they bring the baggage that with as e raised children. hav the callers saying you have to respect these

police officers, yes you do. but, the police officer also have to respect the people he serves. only that -- most people don't have a clue about what they are saying about these black leaders questioning me and my comrades, tthe way we do our job. to be e supposed questioned. if you're not question on the can we do our job, how make the right decisions. when everything sounds like a spinoff from networks on tv -- it is a joke. on the uniform, the main thing you are supposed to have its respect for human life. when you have grand juries across this country that do not look at facts -- do not look at it is not --

another thing, if you asked a simple question -- if a police officer were gunned down in the middle of the street, without his weapon drawn, without can -- would the outcome be the same? ask you -- you say police officers bring their the job -- is the training that can be done to change the mindset? caller: we are a country of many nationalities. we do not even know i nationalities a lot of the time. just because you look white doesn't mean you are white. people do not understand that we are raised in a culture in this country -- not all white

people are raised the same, not all black people are raised the same. you have to give the on the way you were raised, and see human as human beings. the black parents who lost their children hurts no less losing a ite parent child. that is a painful situation. host: teresa from new jersey. caller: good morning. to say that i almost went through a detour other night -- tthe police officer screamed in my face. i'm sorry, officer. i have five minutes to get to my home -- by the time he'd be toward me, it took one hour and a half. the hallway -- i asked

god to forgive him, and me. he has a job to do. and i said, god bless them. >> damon. >> how you doing? >> doing well. >> i hear people on here talking about -- they want to on al sharpton and president obama. history of y has a racism. when it comes to those cops, raised like this -- with racial baggage. put them through all the training you want to. cops aare you

talking about? caller: i'm from the state of louisiana. when i say cops, i say these white cops here. host: i got your point. from the washington times --

eric in seattle. you are on the air. is systematic -- this is the fabric of america. the chief justice he said -- a black man has no rights. the politic situation --

people in these -- three strikes, you could get these kinds. these are democrats. the people who are talking now up in chicago -- they want along with this. we having crats congress, they need the african-american community to vote for them. 52%.ident obama won over you look at the wrong leaders. thank you. host: rich in pittsburgh.

by the way, law enforcement we you as well. from >> good morning. really quickly -- senator rand paul has said that in certain situations he can see himself smarting off the police officers. just tell you -- my boss, an african-american woman, one of the hardest i rking and nicest people have met, save for money to get a dream car -- after she bought she six months later, traded in. i said, why? she said for 20 years i was police officer y -- with my bmw, i was stopped three times for registration checks. are dealing we with.

that's all i have to say. host: we will keep getting her in ughts on the situation new york, and across the nation as police are on high alert. in pairs, d to work where bulletproof vest, etc. this comes as the mayor of new york calls for calm and unity. what are your thoughts? you can also weigh in on social media. also, send us an email. i was actually some other news some other show you news --

states way, the united was asked if north korea is destruction of internet, the papers of mourning calling the response state department a non-denial. [video clip] going to talk the response -- eexcept to say that as we implement our will be seen, e

and others won't be seen. i cannot confirm the reports, the president at has spoken to. host: usa today putting it -- north korea off-line. an m the new york times, interview with mitch mcconnell. a quote -- there are two kinds of people in politics --

it is said that senator mcconnell has already extended the work week. on fridays -- a major departure.

the new york times goes on to say that it does not look likely that mr. mcconnell will make that change. the r what happened after keystone bill, mcconnell said they are focused on three areas when it eventually find agreement. those of you that are interested in the affordable care act and what the supreme court might decide -- mark your march 4 -- that is when the supreme court will take up the state of obama care subsidies. back to your phone calls.

the police department is on high alert following the killing of those two police officers. what are your thoughts? ben is in law enforcement -- you're on the air. caller: good morning. need the police the police just like the police need the neighborhood -- a bad a good cop. my family is the police and as long as mily for i've been living. if you have a bad cop writing with you, you need to tone him down in the neighborhood. policing police -- it makes it bad for all police. if the criminal has been they look at all

please embed. but they are not. you have one bad grade in the bunch. host: from ohio. caller: i'm a victim of police misconduct. i live in a small town where everybody knows everybody. the police officer wanted to with disorderly conduct. i am going to a dispute with a middle school. are under they investigation for the police officer discriminating against my son and his disability. we had police officers in the school system -- , they work with the school, which is unfair for parents because we do not have the ability to discuss what they are doing with their children.

this police officer went to our court -- i do not know how he did it -- tthey came up with the document issuing the for my arrest saying i on not show up for court september 8, a monday. they did not take out this alleged charge until -- and between g happen in them -- the actual incident on august 29. the officer did not go and take up this particular charge until september. the incident happened in franklin county, an officer get out of the county to this -- host: what does this all mean in regards to the situation in york?

caller: police misconduct. does is it affects the faith that people have in the judicial system. it makes citizens feel as longer can no trust, not only law enforcement, but the judicial system. from columbus, m ohio and i'm 50 years old, so in e had a good relationship is neighborhood, which predominantly black, very good police officers. ohio lso a graduate of the state university, and my major was sociology with a minor in criminology. understand community policing

and how they address us. i do not think the training is so much the issue. if we do not understand that the police officers are held to the er standards than regular citizen -- i think that is what is being missed. give your background, to this -- this is a facebook post from the national association of police organizations. they quote here the baltimore police union president -- what you think about that? caller: i think it is sad. when he says that the bloodshed to continue -- i think it will only continue if

your callers said -- like one of your callers said present not pleased. if they are not held accountable for what they do wrong. it is not a colored thing. everybody is coming together to tell their stories about police misconduct. the policet how officers turned their back on the mayor. they have to understand that the mayor is responsible to the citizens, not specifically to the police department. they miss their mark when they do public things like this and -- turning their back on the mayor. there is a position that the theye officers hold, which are not supposed to break the law. citizens break the law, and they are there to arrest them and to make law and order.

to policemes training, if you do not have a system that will hold holies accountable for the wrong that they do, training is not going to help. they still feel like they can get away with the he hate your -- with the behavior. host: let me tell the viewers with the dr congressman, peter king, had to say. [video clip] >> the president says we have to have a conversation about race, and then it is up to the police to change their tactics and methods, implying the police are wrong. overwhelmingly, the police are right. i was going into the details of the brown case, and there was more of a quarter of a million misdemeanor arrests in new york alone. this is the one case they're talking about in staten island. there was an african-american toef acting in response

african-american store owners in the neighborhood to take eric garner away. whatever was right or wrong about staten island, it was wrong for the mayor and the president to imply that somehow this involved race. , congressmaning from new york, talking about this on the sunday talk shows, saying the language seeing used is demonizing police. the "new york times" weighs in this morning and the editorial. mr. diplomacy of dust mr. de bla harmony -- r

that's the "new york times" editorial this morning. the "washington post" editorial also has an opinion. officers down, the blame game goes too far. they write --

in lancaster, texas, in law enforcement. i support law enforcement and those in corrections. they are the ones who run to gunfire as opposed to running from gunfire. most of us run from it. law enforcement have to own up to a lot of things that they cause. on example, you can listen the talk shows, and law enforcement officials are saying all the right things. but you have to take a look at actually what they are doing. i did my graduate studies in

corrections. for an example, you can talk to en, and they say things like, no policemen want to kill anyone. that is true. but the things that you do can trigger a situation where killing happens. i believe it was in cleveland where the young man was killed who allegedly had the toy gun. any one in law enforcement would tell you you do not run up within two feet of a so-called armored sailor. you put yourself in danger. you put your vehicle and harm's way. white ridden with friends, and they will stop along the highway and they will say things to people, like the checkpoints, couldn't you move this down to another part of town? do you realize that your causing

traffic it? this is a white officer. can you imagine if a black citizens stopped to tell a white cop, can you move your radar checked out? you will probably be charged with interfering with the duties of an officer. host: all right. tennessee.n, your opinion? caller: i am watching a lot of television about this subject. i notice al sharpton has been out there keeping on the heat and blaming everyone and everything like that. but the trouble of it is, i seen on television last night and it upset me, comcast and nbc has money, and he is a tax evader. he owes up to $5 million in taxes. he has been in the white house over 80 times.

i do not understand why comcast would pay someone like him to go out there and stir up trouble every time he gets a chance. everywhere, it does not matter. people need to look at him and comcast and nbc because there is no sense in all of this. usa today" page o" yesterday had these stats -- host: we will keep getting your thoughts here. a little over five minutes left to continue this conversation. the "washington post," federal hearing set for new york conklin -- new yorkm congressman michael grimm.

he originally pleaded not guilty to a 20-count fraud indictment and april, charged with tax evasion. it goes on to say -- host: he is expected to plead guilty. it says that the house gop leaders believe that the house's code of conduct could force to abstain from congressional activities, according to a house republican aide they requested to speak off the record. guide for a leadership as they consider the response.

also in the "new york times" this morning, a story on n releases.delays i a resignation dealing another blow to obama's efforts to close the facility. officials at the state department and white house have express frustration with the slow pace of transferring approved prisoners. .lso, this story on oil prices the front page of the "financial times" this morning. the opec leader vowed to maintain oil output, even if the price hits $20 a barrel. in an unusually frank interview, the saudi oil minister tore up the opec strategy of keeping

prices high by limiting oil output and replacing it with new policies. an effect on russia's economy, as you all know. here is the international section of the "financial times." rocked russia's neighbors. so it is the countries around russia, as well. let's go to the next call. lisa, what do you do? caller: um, hi. [indiscernible] ok, what do you make of the situation? caller: i think it is terrible that these protests are going on, because we need poll lease in every part of the country. every- we need police and part of the country. also, there is a citizens review

panel for complaints lodged by citizens. our former chief of police was indicted on stealing the money of the people of pittsburgh. i think this younger generation has -- they have to be taught respect. they have lost respect along the line with broken families. host: deborah in chicago, your thoughts? hello, good morning. i am a professional bus operator in the inner-city. i work night hours. my job is to pick up everybody there from 1:00 a.m. until 6:00 a.m. afraid to, if i am pick up whoever is at the bus

unfit for them job. now, these police officers are afraid of these people in their community, and they cannot work with them. they are unfit, period. job, not to do their be afraid of who or what community that they are protecting. that is not service. service people, we do not work in fear. host: all right. florida, part of the law enforcement community. go ahead. caller: first, let me just say this, i am an 80-year-old retired military man and i also worked for the police department, the largest one in

the country. i want to say two things. one, the police department seems admit wrongdoing, so i can understand why they do that. on the other side of it, in this situation where race is involved, you have people with these very, very strong views on both sides, and they seem to get a lot of place of the press. i think this is one of the problems. flaming, inflammatory language that is used, like some of the politicians and people on the police force, only worsens the situation. andeed people with calm -- i think president obama is one of them that can address race in this country. it needs to be done very badly. i do not know if this is the time to do it or not. i do not know if you can mix race and shootings and all that together and come out with a good result. host: another piece of reporting ,his morning from the papers

from senator tom coburn, republican of ogle -- oklahoma who is retiring. he writes this in the "wall street journal" this morning about nasa, saying it is "lost in space." he writes -- in the "wallurn street journal" this morning. let's go to don in chicago. caller: i feel the police department, they go by this code

blue -- not code blue, but they have to stick together. you have a police officer and they could be beating someone at another officer could be standing by and will not step in. they should be accountable, also. they stick together no matter what. it is always, whatever they do is justified, and that is incorrect. one more comment. about those cameras they are ,oing to put on policemen what happened to the young man in new york was on camera. they do not do anything about that. so what makes people think that if they do have cameras on policemen, it will work? from thearly shown beginning what happened to the young men in new york. host: a headline from the "richmond times dispatch." former governor bob mcdonnell convicted on 11 charges and will ask the court to consider several options for his

sentencing other than prison time. he is extended to challenge the determination by the u.s. probation office that he faces a prison term of 10 years and seven months under federal sentencing guidelines. his lawyers will argue that the guidelines call for a sentence of three to four years. coming up next, we will turn our focus to the housing market and predictions for the industry in 2015. later, we will talk with a former cbs investigative journalist, sharyl attkisson, talking about her latest book about covering the obama administration. president obama last week announced a shift in u.s.-cuba relations. on monday, the latin american initiative of the brookings institute posted something about what led to that. [video clip] >> i think it marks the beginning of the end of five decades of hostility between these two neighbors. yes, we have distinct systems of

governance. i think it will take some time for those changes to happen in cuba. i think it certainly is the end of the cold war as we understand it. a newlly, this talk of cold war between washington and a bit in thiscede context. and it is a reset of u.s.-latin american relations. in the last year or two, we have seen latin american leaders take a much firmer stand fan in the past, want to cuba to be integrated into the inter-america family. yes, it did mean a difficult decision on our part to beognize that cuba could coming to the americas not as a democracy. that is a standing rule and something we should acknowledge and something that needs to be addressed over time. i think, some

thing else about u.s. policy, which is a comprehensive set of punitive sanctions that affect a general population is not the way to go. you turn a whole population against you, and it allows those leaders to turn it into a david versus goliath scenario which does not work for us. we have, i think, a series of different sets of countries, more targeted sanctions, as we so recently with the case of venezuela. that is interesting timing, which some people have commented on, whether this was a bone to throw to hardliners. i think there is real concern in cuba -- there has been for some time, for the last several years, i would say. writing on the wall that we cannot keep depending on venezuela. we need to diversify our relations. diversifying relations to include the united states is critical for their economic future, and they have come to realize that. host: that conversation

yesterday at brookings institute 's latin american initiative and washington p recover the whole thing. if you want to watch it, go to c-span.org. joining us is chief economist and senior vice president for the national association of to talk, isi lawrence yun about the housing market. let's talk about 2014 and the housing market. guest: the year has gone through a cycle. we started out very slow. there were snow we weather conditions that had an impact. also, the interest rate began to rise about 18 months ago, so you have the residual negative impact. why the second half of the year, it came around nicely except for november here are the most recent housing data that came out was a disappointment. host: yeah, why? sales declined.

it is somewhat of a puzzle. sales continue to develop, and we have job creation. you have this exceptionally low mortgage rate. rising, and that generally begins to tip some renters that can qualify to seriously consider buying a home. these things are developing. one reason why there may have been a decline in november is a lack of choices in inventory. we have limited inventory. the buyers want to see plenty of inventory before buying. this is a major expenditure. host: why is there limited inventory? would characterize it as a new home construction depression that is still ongoing. historically, home building activity runs about $1.5 million

-- runs about 1.5 million a year. we have had under one million for seven straight years. this is beginning to filter into the broader market with a shortage of inventory. i concerned that once we reach the spring buying season next year, inventory may not be there thanrices may go up faster income or wage growth. host: what is the follow-up on that? caller: it is not good news because it would hinder affordability. it could be a housing shortage, not only in terms of lying, but apartment, rental housing shortage. it is interesting -- everyone knows about following gasoline prices. they are happy about it. but next year, if the new home construction continues to lag behind, america could encounter housing cost problems where rents and home prices are rising much faster than income and

wage. we are lacking supply. we need more new home construction to reach the market. is it incumbent upon new home construction? what is going on with existing homes and people not -- the lack of turnover guest? guest: existing homes are about 90% of the market. czar about 10% of the market. there are changes in family circumstances or new jobs as reasons to buy homes. marriages, divorces, a school age kid, finding a better school district. when they are buying a home, does not really improve the inventory picture. the only way to get a sustained increase is either new home construction or for people

owning more than one home, say, investors, who want to sell the house. home construction, is it concentrated in certain areas or is it a problem across the country? guest: it is across the country this time around. generally speaking, new home construction is much more difficult in heavily populated areas be an naturally, new york city, boston, san francisco, and l.a. even in the state of texas, very few regulations, therefore, when there was demand for new homes, there was construction of new homes. supply always match up. this time around, even in the state of texas, you see price growth of 10%, implying housing shortage and lack of new home construction. one interesting factor, lack of construction orders -- construction workers. many of the past construction

workers moved on to oil drilling. the second reason is the difficulty of obtaining construction loans by small homebuilders. for large homebuilders, they can go to wall street. but small builders are essentially getting shut out of the market. host: we're talking with lawrence yun of the national association of realtors. he will take your questions and comments about the housing industry, what happened in 2014, and where it is headed into 15. eastern part of the country, 20 2-748-8000. here are the other lines -- host: what is the prediction for 2015? guest: 2014, looks like home

sales will be down about 3% from last year. last year was a good recovering year, the second year of recovery, with home cells having risen 10%. now we're coming down 3% from that level. in regards to home values, most important for homeowners, many homeowners are not in the market to buy or sell. they are just trying to enjoy some housing equity growth. are continuing to increased 5% this year on a national average basis. and going into 2015, i anticipate, given the size of the pent-up demand, but home sales overall will be rising 5% to 7%. and value probably moderating a is, about 3% to 5%, but that assuming home builders will come onto the market. if homebuilders continue to remain sidelined, we could see a faster home price growth. host: what does it mean for the

economy if home prices rise 4% to 5%? picture. is a mixed net, i would say it is positive because a majority of americans are homeowners. they are seeing positive wealth. once they feel wealthier, they spend money on furniture or going to restaurants. they stimulate the economy, something called wealth effect. but for attentional home buyers, renters who want to convert into ownership, it is much more difficult cousin of affordability challenges. 4% to 5% inrices up 2015. mortgage rates rising. about 3.9 percent for 30-year fixed in 2014. what does that do to not only the new homebuyer, but other folks who have seen their wages remain flat over the years? have a situation where home values outpace wage

and income, not good news for potential buyers. and then you have rising mortgage rates. this year, very fortunate, very welcoming that they did not rise. i thought that they would rise. there was global economic uncertainty, so it continued to remain at these low levels. but next year, coming out of the federal reserve, looks like mortgage rates will be rising sometime next year. another piece of bad news for potential buyers. the positive is the underwriting standards. underwriting standards have been exceptionally stringent. was some dialing down of the underwriting standards, both in terms of government policy and also from private lenders. mortgages originating in the past few years are one of the best-performing mortgages ever with very low default. that means there is a natural market. we may again to see some dialing down and mortgage standards.

moving towards more normal -- we do not want less underwriting standards like the bubble years, clearly. but it has been extremely tight and we may see some relaxation. that ray have melon -- that may bring millennial's entering the market. host: by rain, what was your experience like? , ther: my experience situation to get about 11 months to sale the property. i did have a buyer. but we know what happened with the economy after 2007. i sold a home in san antonio, texas, as well. there is a lot of demand down there. and i have one more home in delaware with three offers right

now. but i will be one of those buyers next year then you mentioned, looking to get into a new home. host: ok. 4% mortgagenk the rate of today's market is historically very favorable. sometime next year, in may across the 5% line. i'm not sure. whyt does, people will say, didn't i groep that 4% mortgage rate? why didn'tat the -- i grab that 4% mortgage rate? they should not rush into it, but given that the mortgage rate will probably rise, that should be one of the considerations in making that decision. travis in coal just her vermont, you are on the air. caller: i wanted to reiterate the point that the housing shortage really does make housing affordability

tremendously difficult. particularlynt, around burlington, there is a huge housing shortage. most of us are making very good $90,000 $75,000 to year, and we're still paying at least one-third of our income for rent. buy aare you trying to house but there is nothing on the market? caller: it is hard to buy a house when you have to pay so much for rent and you cannot save up very much for a down payment. but it is true, the housing costs themselves are extremely high. you get a 900 square foot condo for like $250,000. host: how much is your rent? in --: right now, i live it is technically a one-bedroom, and i am paying $1500 a month plus utilities, and the utilities in vermont are quite

high, especially in the wintertime. host: right. nt for that square footage, that amount, it is on the high end. when one looks nationwide, the rent increases have been 3.5% most recently from 12 month ago. that is the fastest growth in rent in seven years. s are also accelerating because of the broad housing shortage. it means that a person's wage, more of it is going towards rent, and it is more difficult to save for a down payment. one clear way to solve much of the housing shortage problem is to build more, build more thely, and that will tame home price growth and rent growth, and people will have a better chance in terms of affordability for renters and home buyers. host: what needs to happen to make more building possible?

is it all up about loans? guest: before this housing downturn and current recovery, during the more normal times, more home building was done by mom and pop, small local builders, rather than the large wall street companies. but now it is the wall street companies coming kb home'ss, le toll brothers. the mom and pop builders are essentially sidelined. the way i understand it, the long-term lending arrangement by the local builders for the local lenders, the local lenders are saying that, because of burden some new worlds and financial regulations, it is much more difficult to make construction loans compared to the past. maybe there is an area to look at regarding how to open up the construction loans here from the banking side, they have plenty

of cash. cash is not working through the economy and getting to main street. boughtichael in virginia a home in 2014. tell us your story. caller: good morning. happy holidays. guest: happy holidays. to ronnieill move on in georgia. apologies for that. go ahead with your question or comment. caller: it is my understanding that the housing market was , and now, allmal of a sudden -- i am a master electrician. complete streets, i mean, one-third of housing completely empty. is this what he's talking about with new housing or are they

talking about housing resales? we have the unfortunate case of increased foreclosures, a large number of abandoned homes. after a few years, what you sow was many of the investors beginning to come into the those and scoop up property at bargain prices. smalltime investors, as well as a new group of institutional investors raising money through hedge funds, private equity from wall street, and they were buying properties. in many parts of the country, because of the strong investor activity, those empty, abandoned homes were picked up and now are being rented out. but now there are far fewer of them. of course, there are some pockets across the country, detroit being a prime example, where there is still an abundance of abandoned homes. host: let's take the next call from alabama.

caller: what about the people who were foreclosed and have no credit on the housing market? guest: very good question. the bubble was in 2005. subsequently, harsh landing, harsh crash in the immediate years afterwards. 2015 now, turning into very soon, so this is almost a 10-year cycle. for people who went through for closure, they generally have to sit out for seven years before they can reapply for mortgages. there is a slight variation looking at whether it was a fannie mae or freddie mac-backed loan. but we went through this 10-year cycle, and many people could be now in a position to come out of the penalty box, in a sense spirits of they have been locked out, and now they are able to enter the market. toit is worth talking

realtors and talking to lenders to see whether a person can now qualify for a mortgage. one is your way to qualify for a mortgage in this environment is to go on the low end. do not go for the dream home on the first try. go for the lower-priced home. put some sweat equity into it, build it. that will be an easier way to get into the ownership latter. that is the old-fashioned, hard-earned way, build equity over time and then trade up later. int: realty trac said november, the foreclosure rate, looking at about over 110,000 total properties, down 9% from october, down 1% of november 2013. the 50th consecutive month decrease. what do you make? guest: the number of seriously delinquent mortgages, for closure, those are cut roughly in half from peak levels.

it continues to move downward. the number of distressed property sales in the most recent data was 9% of all transactions. in the previous years, it had been about one-third. to be only 9%, maybe this time next are it will be almost insignificant, less than 5%. so we're working through those. host: rob is next from tennessee. yeah, you know, the biggest issue i have run into, and i have bought homes before 2007. but real quick, in short, this time i went with the government-style loan. just the policy change in getting the loan -- i mean, i had to look at three homes. during those three homes, i had to pay -- quality inspections and everything, and they just did not pass inspections. and the buyer is stuck with all

$2500fees that went up to . i put out-of-pocket three times. i have heard this complaint many, many times. you did not lose the earnest money, did you? caller: i did not lose the earnest money, but i lost all the other moneys as far as inspection fees and then the home appraisal. what happens is your appraisal comes after all the inspections. for thees not appraise asking value of the home, then you are stuck if you cannot come up with a reasonable agreement on paper. you are stuck right there. upit is the buyer that ends forking out all the cast. the policy change alone is just that there it seems has to be a better way to adjust

these policies so that the buyer does not have so much out-of-pocket right out of the gate. guest: those are precious thoses taken away on because of appraisal issues or inspection issues. way to minima -- a minimize it, could be state regulations or federal government program, loan program where you have to meet some criteria. it would be one way to help clarify it. talk to your realtors or local realtor association. eventually, it filters up to the national association of realtors. we can share this information with congressional staff, members of congress, other policymakers in washington to say, look, it is really difficult to save money for down payments. now, because of inspection errors or appraisals not coming in, it has been taken away. it is not a good picture. now thatl say that

prices are stabilizing much better -- prices are rising 4% rather than the big swings or declines and increases, it makes the appraisals much better now because there is some stabilization in home values. hopefully the problem steadily disappears. did earnest money become part of the equation? caller: it always has been pretty much the case, because we want to ensure that the buyers are serious. it requires a lot of time for the professionals to help search for the home. offerant to be sure the they are making is a serious offer and not something that can easily change their mind on. but the earnest money would go straight as part of the down payment, so it is not a money loss. it is just money put on the side to assure the seriousness of the

purchase. host: so, to assure the realtors? theer: to ensure transaction occurs. the earnest money would be part of the closing costs, help reduce closing costs. it could be part of the down payment. if the consumer -- it is the consumer a prosperous money put on the side to assure that what they are offering is a serious offer. host: how much are we talking about? guest: it varies. some people will put a modest amount. others, it is a competitive environment. there is a home with five people that want to buy. to indicate the seriousness, they will put up much more earnest money in the bidding of the home. host: tens of thousands? guest: oh, yeah, it could go to that level. caller: betty, selling a home in 2014. caller: i wish we could sell the home. it is tax appraised at $62,000.

three bedroom, one bath, garage, nice house on a nice flat. the best offer in the rising health price market was $30,000. host: have you gotten any explanation? this is what buyers are offering you. caller: that is it. that is all you can get. the market is just so depressed in this area. host: what is going on in the area? what are the jobs like? caller: low-wage. host: has it declined over the decades? caller: the job market or the housing market? host: both. caller: both? both have declined, really. i mean, i do not think people want to buy a house, but they will go out and pay six under $50 a month in rent -- they will

pay $650 a month in rent. i do not know the explanation. guest: what thing about realistic, there is tremendous local market variation one cannot get a home in washington, d.c., and move it into indianapolis or indiana. medium price in san jose, where the silicon valley companies are located, reaching close to $1 million. many homes in middle america in a rural area, a home may be selling for $60,000. if it is a more distressed local economy, a large factory shuts it done, then you have a situation where home rallies decline. there are no new people coming people there are few looking at the home p therefore, independent of the tax appraised value, the market value would be

much lower. , whatsouth dakota, greg is it like in your area? caller: [indiscernible] cannot figure out why. one thing i am trying to figure out is -- trying to follow the money trail here. people will put money in a bank cd and getting 2.5% interest. interest rates on a 30-year mortgage, i think, is like 4%. why would people even want to go this route when they can make 10% to 12% on wall street or even higher rates on foreign markets? you know, because they are tired of the low interest rates for so long and they are not getting any income off of their savings and retirement and stuff. what is enticing the money to come into the mortgages, or is the government heavily involved? just how solvent are fannie and freddie? fannie and freddie made a huge mistake during the bubble

years and cost taxpayers times of money. they have new management, and with a new management coming in, they wanted to play a quiet, behind-the-scenes, traditional role, rather than being aggressive like a wall street type role. they have to recover all the taxpayer money, and now they are making a good profit which will turn over to the u.s. treasury. so it is money for the taxpayers coming in. fannie and freddie have made tremendous progress after the mistakes from past management. of the fannie and freddie special role of government-guaranteed mortgages, the government borrowing rate -- at the u.s. government can borrow at 2%, then fannie and freddie would be able to borrow something a little above that. the government guarantees they can pass on that low borrowing costs to the consumers. that is why mortgage rates today are at 4%. host: fannie and freddie now

expecting 3% down? guest: they are looking to 3% down payment along with private mortgage insurance. they looked at analysis, and they are finding that even people who make low down payments, if they stay well within their budget, loans perform well. one of the better indicators is veterans affair mortgages. the requirement is zero down payment, but it has been one of the best-performing mortgages because they stay well within the budget or the problem was whether consumers made zero down, 20% down, if they overstress their budget, that is when they get into trouble. .ost: 3% down though are there tighter lending restrictions with what you can buy with 3% down? down, compared to 20% down payment, for example, it carries more risk, therefore, one would pay a slightly higher

mortgage rate to compensate for the lower down payment. we are taking your questions and comments by the housing market in 2014 and what it is looking like in 2015. lawrence yun here with the national association of realtors. phil you are next, ohio. i wondered, during these hard times and people have not gotten raises for years and a lot of people have lost jobs, hum -- how come the national realtors association cannot lower the rates nationwide? in northeast ohio where i live, why couldn't they lower them? if you sell a house at the $50,000 rate, 5% is good. but you sell a house at $150,000, maybe take 3% or 4%. that would help everybody move along. they used to clump a lot of fees into their fees, like prorating taxes. they actually get fees on top of those. they should not be in the contract. last but not least, say they do

take 5%. all the realtors, nationwide, federal law, part of that money goes into a nationwide escrow fund. a small part of each fee to help when the house goes into for .losure they have to maintain, cut the grass and shrubs, maintain so they do not devalue the neighborhood. guest: thanks for your concern. our organization takes zero from the commission of the transaction. iesgoes through the compan involved in the professionals involved a people search for who they feel comfortable working with. not your organization. i think he is talking about agents in the community. during the recession, during this recovery, why would they continue to take 5%, 6%? guest: it is all determined by

the market forces. fee andnts charge one others charge a different fee. consumers would search for which agents would best serve their interest. what we have found is when you take a survey of consumers, 80% of consumers would say that they would want to work with the realtors they have worked with .efore they feel comfortable and very happy with the transaction. naturally, there will be few people unhappy with the transaction and they will be searching for different ways to do it. but we are very pleased that 80% of the consumers are happy with their transaction and would recommend friends and colleagues to their realtor. host: after the housing market crashed and the recession hit, where there changes put upon it the real estate industry? there was changes regarding some of the appraisal process to assure there is no

inflated home values. there were changes regarding the loan availability, which went from very lax underwriting standards to overly stringent standards, and now i think the market has settled down. they are trying to move the dial back towards normal. regarding the industry, it has a ways been very competitive. competitive among realtors, among brokerage houses, and the consumers. as for consumers, whether they're going to department stores, they are shopping around for who will serve their interest best. 80% of consumers who recently purchased homes or sold their homes, they were very pleased with their realtor. host: a front-page story in the "wall street journal" recently about appraisals. appraisals making a come back. industry executives see parallels with pre-crisis valuations. regulators are wary. one in seven appraisals

conducted from 2011 through early 2014 inflated home values by 20% or more. guest: regarding the value, this is what people have difficulty. value should be what the seller and buyer is willing to transact. they look at the comparables, which means a home sold three-month months ago, and that particular home may not be exactly the same. they may not have the modernized bathroom, for example. appraisals are using their judgment regarding that. want regardingrs the appraisal process is to point out that they do consider this traditional modeling in the kitchen area, so they will point it out but the appraisal work itself is independent, and the appraisers work for the lenders. lenders want to make sure that the loans do not default to what we have seen is that the past 3,

4 years, the mortgages that have been originated have extremely low default rates. so you find the appraisal, even though there may be some disagreement on whether it is overvalued or not, at least there is no increased default rate in loans. loans are performing very well right now. host: nancy in red hook, new york. caller: i am most interested in this program. i find that if you want to know a good value and a home in your area, you should seek out those closed with v.a. loans. those are the loans that we started with in 1979 to 1983 when we had a terrible, terrible market in america. the v.a. loans set the bottom or set the appraised value to work off of. the other thing i would point out to my friends across the nation listening is that in your county, tried and have a broker or a few brokers keep track of

all the sales in your community. you look at whether appraisers need to appraise a home, and they will have assets to turn to come all the written up, closed mortgage listings. that is what i wanted to say. i wish everyone a good year. guest: that is very good advice. host: frankie, south carolina, go ahead. yes, i live in beaufort, south carolina. when people buy a home, they want their investment protected. the communities down here are policed very well. if you do not cut your grass, they will cut it for you in those kinds of things, and they charge you for it. they seem to do very well, the gated communities. the non-gated communities have empty houses. people turn around and rent the house and a very prominent

neighborhood but not restricted. so all these houses on the street are for sale because anybody can move in and rent. i am wondering, how is the homeowner, except for moving to a gated community, supposed to protect a very valuable investment? for most americans, the largest financial investment is housing. people do have some exposure to the stock market, 401(k) and other pensions, but one looks at the value amount, and for most americans, it is the homes where the most values reside. in places like beaufort, south carolina, it is all about neighborhoods here is for whatever reason, one neighborhood gets that special attraction, while other neighborhoods lose their touch. i am not sure exactly all the details happening in that part of the country. you see the neighborhood affect somehow takes off.

so you see large value stateences across the railway train stations sometimes. one way to assure that it is really a community, things like trash cans being turned over, they can really help -- not help the neighborhoods, but having some kind of home ownership associations. i think those are positive developments. host: on twitter -- how much is hud, low-income housing, and section eight the pressing the housing market? guest: the section eight program is assistance for people in the low to moderate income to help with rent assistance. now, whether van saying you have to live in one area, they are saying to find the area and we will supplement the payment. overall, i think that helps well

, because now you see more competition as a result. but rather than focusing on hud right now, the critical issue is broader housing storage. if we do not have new home construction independent of the funding for hud, we could have rising housing cost problems in the upcoming years. oft: what about the decline oil and gas prices -- what impact does it have on the housing market? guest: i can go back to sort of the reversal of the question, which is that when oil prices spike to several years ago -- when oil prices are gasoline prices are past four dollars a gallon, people were shocked. at that time, the outlying areas of the major cities with long commute times, those were the neighborhoods that were hard hit. people were looking for closer .n shorter commutes now that the gasoline prices have declined, it will be

interesting to see if the demand the outerer regions, suburb areas, get greater interest. host: this is from the "new york times" this morning. year: a steady course -- the federal reserve has a dual mandate. one is to help on the employment front, but also to contain inflation and we saw during the of0's the damaging effect high inflation when the prices were rising at 10% or a faster rate. economists have characterized

inflation like a toothpaste. once it is out, it is hard to put it back in. we want to be sure that inflation is contained in brain up, inflation is running only at 1.5%, a very moderate level that is within the comfort zone. but the rising rent and housing costs, that is something the beeral reserve may underestimating. but at the moment, the low gasoline prices, inflation not really an issue, therefore, federal reserve can maintain their low interest rate policy for a longer period. in your opinion, will prompt them to bring interest rates higher? guest: i think when the unemployment rate goes down even further and they see there could be wage pressure that leads to higher per digital inflation. or they see the overall consumer price inflation, for one reason or another, including housing costs or a reversal in gasoline prices, lead to surprisingly higher inflation, and the fed

will then pull the trigger to raise interest rates. host: what about wages, incomes for folks? will be determined by supply and demand. steadily, there is less of a of unemployed, so we may begin to see wage growth accelerate in the upcoming years. there is still the case were many college graduates are not finding a job for which they were educated for. there is a lot of frustration involved. overall, the wage growth will come from the increased productivity of the labor force, and that means more innovation in america, more entrepreneurship. host: but that means the workers are earning more? generally, with rising productivity, that translates into demand for workers. if workers can produce 10

widgets compared to nine widgets, that worker will be sought after. america andtion in rises in productivity should lead to a rise in the real wage. host: b host: let's hear from death in edgewater, maryland. what he just said about increase in productivity leading to higher wages, that has proven false over the past 30 years. the middle class has stagnated and now is shrinking, and without the middle class you don't have a housing market. that is my comment. caller: guest: the caller makes a good point on micro-level data. people on the higher income