christopher mayer testified here and said bondholders have received $60 billion in the last three years in excess mortgage payments from homeowners trapped in high-interest rate loans. i'm assuming some part, also, though, that folks trapped in underwater loans would then be faulted, bondholders 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 -- being trapped in higher interest loans versus the foreclosures in that sector? >> well, generally in the prepay models that they use, they also account for default. that's just a form of prepay. and if you look at the models, they were all saying this should have all been prepaid a lot faster. even accounting for the deall the defaults. i think they benefited net certainly. second-order effects, all the things that policymakers did to support the housing mash, stabilize the housing market, obviously were to the benefit of investors, right? you would have had house falls fall to a much greater degree. i think it

at the very high end, christopher mayer who was here testifying before the committee thought that it would increase refinances by close to 12 million. our expectations are significantly lower than that. there's some who would estimate that it's as low as 1 million. we think that's probably too low. but somewhere in that range, i think it's fair to say millions of homeowners would be able to benefit through refinancing. there are 11 million homeowners who are what we call in the money, could benefit from a refinance with gse loans that haven't refinanced. we don't think all of them under the criteria that were laid out in the bill, we don't think all of them will -- >> how do you get them to do that? you know, interest rates are low, very low, historic low, you mentioned that earlier. the best thing anybody could do is lower a house payment, say, 5.5 to 3.7, whatever, 3.6, think about that. put money in their pocket every month. stabilize the housing market some. under most loans they can refinance without penalty, can't they? >> so here are the two key things that are stopping them.

at the high-end, christopher mayer thought it could increase refinances by close 12 millioin. n. our expectations are lower. some say as low as a million. we think that's probably too low. owner would home be able to benefit. we do not think all of them under the criteria that were laid out -- >> how do you get them to do that? interest rates are at historic lows. the best thing anybody could do was to lower their house payments from 5.5% to 3.6%. that would put money in their pocket every month. they can refinance without penalty. >> they are not allowed to to refinance. they may be above water on the first lien but have a second lien that makes it impossible for them to refinance. this would allow that family to be able to refinance. they may be able to refinance but the costs are too high. they may need an appraisal. whoever holds their current loan, they can charge them very high fees. as much as $15,000 in additional costs because there was not competition between servicers. we're trying to remove those barriers. that would take a family who says it doesn't make sense to spe

at the very high-end, christopher mayer who was here testifying before the committee that it could increase refinances that close to 12 million. our expectations are significantly lower than now. there are some who would estimate it is as low as a million. we think that is probably too low, but somewhere in that range i think it is fair to say that millions of homeowners appealed to benefit your refinancing. as 11 million homeowners who will be called in the many could benefit from the refinance with gse loans that haven't refinanced. we don't think all of them under the criteria laid out in the bill. >> had to get them to do that? interest rates are very low, just to let you mentioned earlier. the best thing anybody can do is lower house payments they 5.5, 3.7 -- whatever 3.6, think about that. put money in their pocket every month. to stabilize the housing market sand. under most funds they can refinance at a penalty, can't they? >> you are the two key thing stopping them. one is they are not allowed at all to refinance. they may be, for example, above water in their first lien but have a

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

at the high-end, christopher mayer thought it could increase refinances by close 12 million.xpectations are lower. some say as low as a million. we think that's probably too low. millions of home owner would be able to benefit. we do not think all of them under the criteria that were laid out -- >> how do you get them to do that? interest rates are at historic lows. the best thing anybody could do was to lower their house payments from 5.5% to 3.6%. that would put money in their pocket every month. they can refinance without penalty. >> they are not allowed to refinance. they may be above water on the first lien but have a second lien that makes it impossible for them to refinance. this would allow that family to be able to refinance. they may be able to refinance but the costs are too high. they may need an appraisal. whoever holds their current loan, they can charge them very high fees. as much as $15,000 in additional costs because there was not competition between servicers. we're trying to remove those barriers. that would take a family who says it doesn't make sense to