the estimates just to the benefits for the gses i think chris mayer when he was here estimated a more than $20 billion benefit to the gses from lower default rates. those -- depending on the takeup, those may be at the high end of the range, but clearly there are very significant benefits that come not just to the economy more broadly but directly to fha and the gses as the housing market has improved overall. >> one last question. the administration's housing plan would also expand fhe refinancing to nongse borrowers who are still paying their mortgages. during our previous hearing you mentioned several ways to protect the taxpayers from the potential risk associated with these loans. as part of that protection, do you have more specific recommendations for standards these loans would need to meet? >> absolutely. and just -- i would start, mr. chairman, by reiterating that these are homeowners that are currently paying. they must be current on their loan and have made every payment for the past six months, missed no more than one payment in the last 12 months. and so they are already

i think chris mayer here, professor at columbia, testified about specific numbers that he expected that exceeded $20 billion. our expectations of takeup are somewhat lower than his. but still, you're talking about substantial sums that could be saved from lower defaults. >> as a matter of fact, professor mayer at our subcommittee hearing that i chaired a few years ago estimated that the results in gse profits of as much as $23.7 billion. so whether it's your lower range or that range, the reality is you're talking about significant saving taxpayers money and reducing the size of any fiscal challenge in the future. the other question i have is, do you believe that the h.a.r.p. 2 policies, some implemented by gses, some implemented by services themselves, are reducing competition among banks and ultimately decreasing the effectiveness of h.a.r.p. 2 and robbing homeowners of savings through lower interest rates? i think we try to address that based upon all the things we heard in the hearing and i'm wondering how you view those. >> there's no question that while many of those barriers to g

nice words second i wanted to say if you haven't go watch our march twenty seventh episode with chris mayer he survived war a financial he's author of world right side up and with him we spent the entire show talking about investment ideas and opportunities he traveled the world looking for them finding the good opportunities in these tough and bizarre paranormal times we'll try to do more of this kind of thing in the future though because obviously you want it and groovy and cow on you to pointed out an error that i made here it is too steady has got our attention we want to bring it to yours first americans work thirty percent more than americans. obviously americans can't work harder than themselves i met thirty percent or americans work harder then europeans i obviously misspoke funny because we combined that story with one about how americans also are taking their vacation days on a personal note we mused about how if the show some of us don't and after that i received a nice to eat about how we probably should so this is a good time to tell you that we are off for the memorial day hol

this is something that economists across a broad spectrum -- i know you had testimony from chris mayer laurie goodman, and many others here recently to this committee about the importance of refinancing. the fed has spoken clearly about the ways that reductions in payments that average 2500 to $3000 a year boost consumer spending and are a net plus to the economy, in terms of the ripple effects that that spending has. i think the broad case has been made very clearly that this is good for the economy. what i would add to that is that for every point -- additional point of increase that we see in home prices, as the economy improves, as the number of foreclosures is reduced, we see a substantial benefit to fha and the gse, because not just defaults go down, but as home values rise, the recovery that we make on any foreclosure that does go forward, are significantly lower. chris mayer, when he was here, estimated more than $20 billion benefit to the gse for the lower default rate. depending on the take-out, those may be the higher end of the range. clearly, there are significant benefits

mayer in here. >> let's do the call of the right. >> chris, i think the problem is the inmates are running the asylum, john boehner doesn't have control. american needs a republican party. you know this better than anybody. these people believe that compromise is evil. they will not compromise, it's all their way, it's partisan objection. we don't have a transportation bill because they only think roadways go to the far, far right. i think politically, they don't take advice from me, but anyway we can contrast democratic priorities to protect cuts for mill fairs. >> why would any voter say let's screw the poor people one more time. medicaid you can't go to the hospital or anywhere. and they keep coming ut with more breaks for the rich. no progress was made today when the president did meet with these leaders. here was jay carney's readout of it today. >> the president refuses a replay of last summer's self inflicted crisis. the president reiterated that any serious bipartisan approach to tackle the deficit must be balanced, and he wants to stake out an agreement along those lines. he will not accept

chris referred to those who are trapped in underwater mortgages. christopher mayer testified here. he said that excess mortgage payments have been made by those trapped in mortgage loans. i am assuming some part that folks trapped in underwater loans who have been defaulted, they have lost something there in terms of being able to get their full principal back. is there a sense of how these two factors have weighed against each other? the benefits of the higher interest, being trapped in higher interest loans, versus the foreclosures in that sector? >> well, generally in the prepaid models that they use, they also account for default. that is just a form of prepaid. if you look at the models, they were all saying, you know, this should've been prepaid faster. even accounting for the defaults. i think they benefited net, quite significantly. that is the first order. a second order effects would be significant. all of the things that policymakers didn't support for the housing market, to stabilize the housing market, obviously went to the benefit of investors. because he would've had