host: do you see a purpose to fannie mae and freddie mac? do you think they have helped americans in the past? guest: i believe they did supply liquidity. if you go back and you didn't have them, then i think your main street banks would have gone in and done that. i think what actually happened is they came into the market and they crowded out a lot of small and medium-sized lending institutions, including small banks and community banks. i think if we had it all over to do, we wouldn't have the interventions we ha#x i have always said, the large companies on wall street, they could hire lobbyists, come to washington, some of their former executives are working at treasury or the fed. they are well connected. they can get along. if there's a lot of government regulation, they have the lawyers to cope with it. small businesses don't. and the more government involvement and management you have, it's almost impossible for

number nine, business as usual at freddie mac and fannie mae. and number 10, our republican substitute ends the bailouts, restores market discipline and protects consumers, small businesses and taxpayers. reject this rule. reject this legislation. we can do better. we have it in hour hands, mr. speaker. and i yield back. the speaker pro tempore: the gentleman from california yields back the balance of his time. the gentleman from colorado is recognized. . mr. perlmutter: they try to compare the 170-page proposal they made with the 1,300 pages we have. in proposal he doesn't deal with hedge funds, with credit rating agency, he doesn't deal with derivative he doesn't deal with excessive compensation to executives, hn he doesn't deal with life insurance, he doesn't deal with a whole range of things, just deals with one thing. let's put them in bankruptcy. let's do a chapter 11. let's let these things go on forever in a chapter 11. ladies and gentlemen we can't afford this anymore. the status quo, which is more or less what the republicans are propo

we should talk with fannie mae and freddie mac. that would help. >> last question. >> i council people locally going through foreclosure. those foreclosures camps where people reach out and request funding, -- the foreclosure scams where people reach out and request funding, they are legal. to call them scams is a bit misleading. maryland is one of the few states where it is illegal, but in most municipalities it is legal. it is unfortunate, but keep that in mind. the treasury program is very well intended, but it is not indexed to the price of the home. as a result, just as we have seen the first-time homebuyer credit kind of a sop up the demand of the low-priced homes, it strikes me that by not making it based on a percentage of the home by you, that we are emphasizing homes on the low-end and we may not be reaching homes on the higher end. the servicer and the current mortgage holder will obviously respond to incentives. if the $1,000 payment makes the $200,000, or the $100,000 home mortgage modifiable, but it does not make the

moral hazard until we end tarp and provide an exit strategy and decide how we will proceed with fannie mae and freddie mac. would you agree? >> i do agree. they have to be addressed, but under the current situation, the tarp was used to bail out companies and make them whole under a well-designed resolution regime. many creditors should lose money which would create market discipline going forward, which is what is needed to avoid the moral hazard. >> the recent quarterly report states there is $317 billion of uncomplicated tarp funds available. do you support letting this expire? >> it is appropriate to begin winding it down. we should clarify what additional needs are still remaining to make sure the financial system is still stable and will not run into any new problems. i think the tarp has mostly served its purpose and it is time to start thinking about how we will unwind that program. many banks are paying back the tar and a lot of the money put out is now coming back to the treasury. >> do you believe we will recover all of the tarp dollars? >> if you look at the money put into fina

fannie mae and freddie mac, which the republican party -- i ask for another 30 seconds. ms. kilroy: i yield 30 seconds to the gentleman from massachusetts. the chair: the gentlelady has 30 seconds remaining. mr. frank: in the 12 years of congressional republican rule, they didn't do anything about fannie and freddie. we did pass a bill in 2007. it was too late. but we have language here that did not previously exist that bans the use of taxpayer funds, that bans the use of any funds to keep an institution going. so, yes, unlike the republicans who did nothing about fannie and freddie in their 12 years, never passed a piece of legislation, we passed a piece of legislation and it was too late but we learned from it and there is binding language here that contradicts everything that the gentleman from texas says but he's not easily said. the chair: the gentleman's time has expired. the gentleman from texas is recognized. the gentleman has two minutes remaining. mr. hensarling: madam chair, has all time expired on this? the chair: all time has expired on the other side. the gent

fannie mae and freddie mac are particular problem that need addressed. the t.a.r.p. was used to bail out companies and make all creditors whole except for the shareholders under a well-designed resolution regime, many creditors would, should lose money which would create market discipline going forward which is what is desperately needed to avoid the moral hazard problem you're referring to. >> the recent sig t.a.r.p. quarterly report states there's $317.3 billion of unobligated t.a.r.p. funds available right now. do you support allowing the t.a.r.p. authority to expire on december 31st, 2009? >> well, i think it's very appropriate to begin winding it down. i think we should be clarifying what additional needs, if any, are still remaining to make sure that the financial system is still stable and will not run into new problems. but i certainly think that the t.a.r.p. has mostly served its purpose and that it's time to start thinking about how we're going to unwind that program. in addition, as i noted several times, many banks are paying back the t.a.r.p. a lot of th

mac because with fannie mae and freddie mac which failed and lost $1 trillion, you had the regulator focused on safety and soundness who was saying one thing, but you had h.u.d. that was enforcing the affordable housing goals that congress had given h.u.d., those housing goals were to have one half of the portfolio in subprime lending, in alt a loans. and to make zero down payment loans. this was what the congress was muscling through h.u.d. now, these things made the regulators very, very nervous. we had the federal reserve regulators come up and tell us, this is a systemic risk to the entire financial system what is happening here. the overleveraging through this arbitrage now is 170-1. you have to allow the regulators to deleverage this. but congress would not. so to beat these affordable housing mandates, fannie and freddie straight into the junk mortgage market. they piled up over $1 trillion worth of subprime and alt a loans. and the housing goals were at odds of the liability of these firms and they led to 85% of their losses. as this past example has shown us, separating thes

mean at the end of the day i don't think congress did any favors or disadvantaged people i pushing fannie mae and freddie mac in mandating that half of their goals mandated that has to that be subprime. that was a huge mistake for congress to make. zero down payment alone by fannie and freddie was a huge mistake. for now living with the fact that people took advantage of that, obviously. as everybody would. if you can get capital at those rates and with no money down, if you could flip homes 30% of the homes in 2005 were flipped in this country. so we knew what was going on. let me ask you, professor your observation. >> well first of all i think you responded at the beginning that the write-down of principle law is desired by anyone that's in that position has serious moral implications about weeding and actually going to default. if you know you're going to get a principal write-down. but secondly on the secondary market fits. andy davidson knife votes a paper for the anti-macarthur and what we said was if we want to get the whole securitization market which is really, but important for the

i'm with fannie mae. i particularly want to say how much i appreciate your comments about the loss of wealth to the minority communities, and as lenders retreat, you know that is only going to exacerbate the problem. in other ways, something was not mentioned today in terms of foreclosures, what we hear from some of our partners, strategic foreclosures three families who are not in the delinquency situation but a situation that may be more appropriate for a harp, which we did not talk about today, deciding to foreclose and in some cases they have investment properties, they will foreclose on their primary residence, and move into an investment property. or you have a situation where the family -- the spouse may decide to go purchase a home and foreclose on the current home where the mortgage is not in both parties' names. i am wondering if in some of the outreach, hope now considers doing harp the dance or do they focus exclusively on the refi portion? >> the home affordable refinance program. i'll be hon

so we have be of a custody, saxon, fannie mae, legally binding agreements, with him, p.m.ac, freddie mac, one west, chase, wells fargo, we've got american homes, hsbc -- again, every one of the major servicers of the country and every one of the major investors in the country we have a legally binding agreement. there's only two real solutions out there. one is to restructure the mortgage for someone with a stable income to make a mortgage affordable, not to refinance, to restructure by permanently reducing the interest rate or the outstanding principal and make it affordable. and i say permanent. that means not a free set in five years to make the payment affordable. and we agree with what laura and some of the other people from the panel say. we should do more principle reductions so you can keep the interest rate at the market rate, make it affordable by doing principal reduction that clearly hasn't happened. when you do the other option is when someone does not have stable income because they are unemployed is a forbearance agreement and lenders have been doing for par

s and fannie mae and freddie mac, my record on that topic is well known here. after the recession that sended in 2001, which was preceded by a bursting of the dot-com bubble, the fed was concerned about a sluggish economy and the specter of deflation. and given throws concerns, the fed chose to hold interest rates remarkably low for years. and indeed, the effectivelyive federal funds rate was well below 2% between 2001 and november 2004. and during most of that period, now chairman, bernanke served as a member of the board of governors, of the federal reserve, and supported the low interest rate policies and in 2002, then governor of -- bernanke warned of deflation. he stated. li gover . . nanke o n. l e, should take most seriously its responsibility to ensure financial stability in the economy. irving fisher, 1933 was perhaps the first economist to emphasize the potential connections between violent financial crises which lead to firesales of assets and falling asset prices with general declines in aggregate demand and the price level. a healthy, well capitali

and fannie mae and freddie mac and all of this and it's government that is the problem. it might be a -- it's not -- i'm not suggesting that government is the answer, but a bankruptcy court system that has evolved from our constitution has proven to be a very effective instrument of helping people and at the same time being fair and equitable. that's my concern. i want your program to work. i really do. i think you need a little bit of a hammer hanging out there. go ahead. >> two things. i just want to be very clear. hope now doesn't really go on or off for what legislation should pass. with all the rules and the tools that are in the arsenal, to today hamp is a dominant part of what we do. if it fails hample, we do other mods etc. my personal background is a capital market background for the first 15 to 18 years of my career. i would share today we have a broken market still in a mortgage security market and the trading market and the government is unfortunately for all of us investing in those. what i do now is i don't know what a bankruptcy on a first lien mortgage wo

it wasn't the capital market that created fannie mae and freddie mac. that was us. it wasn't the capital market says that everybody in america should own a house. that was the president of the united states. >> you were asking about what the ceos of the banking, larger banks were think that i'm thinking they were thinking it's my money. it seems to me that the obama administration has not gotten very much credit for pulling our bacon out of the fire. and i was curious about what your take on that might be. >> your first question, unfortunately, too many of them didn't think it was their motive that they thought their play with other peoples money. if they had been play with their money, it might've been a little more careful. it's not an accident that this whole episode comes when the partnerships are turned into corporations, law firms are turned into profit maximizing things that we saw this earlier in the 2000s during a corporate scandal when all becomes about, if it's all about making money in one of these agencies or law firms are accounting firms, if you don't

and all all i hear is the cra and fannie mae and freddie mac and all of this, and that government isem. it might be a -- i am not suggesting that government is the answer, but the bankruptcy court system that has evolved from our constitution has proven to be a very effective instrument of helping people and at the same time being fair and equitable. that is my concern. i want your program to work, i really do. but i think you need a little bit of a hammer hanging out there. go ahead. >> i want to be very clear. we don't have an opinion on what legislation should pass. hamp is the dominant part of what we did. my personal background is the capital market background, for the first 18 years of my career. today we have a broken market still. and the mortgage-backed securities market, and the government is investing in all of those, fortunately for all of us. i don't know what -- our markets are not acting in a box and away. there are no global investors. the government is buying our assets. i do not know what bankruptcy would do. i worry about that. lot of experts and you know what i've

we ignored it with fannie mae.ere encouraged and assured that it was well capitalized yet we now know they were the primary player in creating these toxic assets and telling them around the world. we now know that loose monetary policy contributed to the creation of the housing bubble and other problems that we had in our economy. yet as we consider the confirmation of mr. bernanke we have not heard from him one commitment to change those policies. one new idea. we have heard some say he has learned from the mistakes. he will be better for it. but folks in the hearing we did not hear mr. bernanke say we will ease the loose monetary policy we have had, there is going be more accountability. we did not hear that yet he agreed he did not reach his goals. the constitution gives us the responsibility. we have delegated it to him. for us to wave the nomination by. i think we have had mixed respon response. we are told by many that we have been saved by a great depression. that is impossible to prove. had told us that if

mean at the end of the day i don't think congress did any favors or disadvantaged people i pushing fannie maes to that be subprime. that was a huge mistake for congress to make. zero down payment alone by fannie and freddie was a huge mistake. for now living with the fact that people took advantage of that, obviously. as everybody would. if you can get capital at those rates and with no money down, if you could flip homes 30% of the homes in 2005 were flipped in this country. so we knew what was going on. let me ask you, professor your observation. >> well first of all i think you responded at the beginning that the write-down of principle law is desired by anyone that's in that position has serious moral implications about weeding and actually going to default. if you know you're going to get a principal write-down. but secondly on the secondary market fits. andy davidson knife votes a paper for the anti-macarthur and what we said was if we want to get the whole securitization market which is really, but important for the mortgage market and the housing market to recover we have to establish

we ignored it with fannie mae. we were encouraged and assured that it was well capitalized yet we now know they were the primary player in creating these toxic assets and telling them around the world. we now yet as we consider the confirmation of mr. bernanke, we have not heard from him one commitment to change those policies, one new idea. we have heard some of our members say he has learned from the mistakes. he is going to be better for its. but we did not hear mr. bernanke say we are going to ease this loose monetary policy we have had, we are going to make changes, there will be more accountability. we did not hear that. if he agreed that he did not reach his goals. the constitution gives us the responsibility. it is not mr. bernanke's responsibility to protect the value of our currency. it is ours. we have delegated it to him. for us to waive this nomination by on a partisan basis perhaps today, although i think we have mixed responses from both sides. everyone expresses concerns. some are willing to overloo

by the fall of 2007, the alternative financial system, which you referenced, composed of fannie mae,tion function similar to banks without any of the safeguards congress had established. since the financial crisis began, a number of banks and other financial institutions have failed which required at fire sale price, conservative ships, or massive federal assistance to survive. these include aig, bear stearns, citigroup, lehman brothers, and merrill lynch. and what are the common threats to these failures are quite a sight-failures? they made bad investment institutions. they were overly dependent on short-term liabilities outside deposits to insure their investment. consequently they severed liquidity crisis when the creditors became aware of the magnitude of the investment losses. these liquidity crisis for the modern version of bank runs. computer clicks replaced queues of depositors withdrawing their money. last the goal had prevented commercial banks -- glass- steagal had been in commercial banks from these problems. i have a number of questions for the panel. what changes shoul

we ignored it with fannie mae.we were encouraged and assured that it was well capitalized yet we now know they were the primary player in creating these toxic assets and telling them around the world. we now know that loose monetary policy contributed to the creation of the housing bubble and other problems that we had in our economy. yet as we consider the confirmation of mr. bernanke we have not heard from him one commitment to change those policies. one new idea. we have heard some say he has learned from the mistakes. he will be better for it. but folks in the hearing we did not hear mr. bernanke say we will ease the loose monetary policy we have had, there is going be more accountability. we did not hear that yet he agreed he did not reach his goals. the constitution gives us the responsibility. we have delegated it to him. for us to wave the nomination by. i think we have had mixed respon response. we are told by many that we have been saved by a great depression. that is impossible to prove. had told us that

host: you have talked about phasing out fannie mae and freddie mac. >> that's right. the first crisis was not last september. we had a failure of fannie and freddie about two months before that, and secretary paulson asked for $300 billion to bail them out. we said we want to reform them and get the government out of the business, and really even the bush administration, and chairman franks is always saying, well, the bush administration helped us do this. it wasn't just the obama administration. it was the bush administration. well, the anger on the american people is directed it everyone. it is not any certain political party. it is at anyone who continues to, i think, intervene and bail people out, and shield people from their consequences of their actions. host: do you see a purpose to fannie mae and freddie mac? do you think they have helped americans? >> i believe they did supply liquidity, but i think what happened, if you go back and you didn't have it happen, then the main street banks would have done that. i think what actually happened is they became into th

they did it to the fannie mae freddie mac thing and that was preoccupying and people disagree and argue about whether they did that the right way but they did something. >> host: they had to do that. >> guest: the question is whether they could have -- this all a problem, had planned and executed it. they didn't get ready for another bear stearns. they didn't go to congress and say we don't have i've enough power or money or equipment to cope with a fire like this again. they say paulson and bernanke if we asked we would have been turned down, it was election year and that would have been worse by the the cut in not asking at all. they don't do what would have happened if we do this again? is a little discussion about options but not really a lot. so i think they are not well prepared for lehman brothers. they get into trouble. paulson to some extent bernanke are very reluctant to do another bear stearns. they've both been pummeled by their colleagues for bailing out bear stearns. >> host: and by the public. >> guest: and they say there's three issues here. one, wall street shouldn't co

not a piece of legislation passed to deal with fannie mae and freddie mac. we did in 2007 pass such legislation. the damage had been done. we want to expand the regulatory power to stop the kind of mortgages from being granted that was a major problem in the crisis. one member said, well, we would do nothing to stop the a.i.g. crisis. in, we do many things to stop the a.i.g. crisis. first of all we do not allow, under the legislation we're putting forward, an entity like a.i. gimplet to get so overextended by issuing credit default swaps they can't pay off. they would be restricted because derivatives would be better regulated. they would not be allowed to be so leveraged. y would give regulate dwhrorse power to hold them in. the notion that it's socialism when you have bank regulation is quite odd. we heard members say this is socialism. there is nothing in here about the only ship of the -- shift of the means of production, there's nothing about the government taking over ongoing institutions. we have bank regulations. that's the deal. these are people who

we ignored it with fannie mae.raged and assured that it was well capitalized yet we now know they were the primary player in creating these toxic assets and telling them around the world. we now know that loose monetary policy contributed to the creation of the housing bubble and other problems that we had in our economy. yet as we consider the confirmation of mr. bernanke we have not heard from him one commitment to change those policies. one new idea. we have heard some say he has learned from the mistakes. he will be better for it. but folks in the hearing we did not hear mr. bernanke say we will ease the loose monetary policy we have had, there is going be more accountability. we did not hear that yet he agreed he did not reach his goals. the constitution gives us the responsibility. we have delegated it to him. for us to wave the nomination by. i think we have had mixed respon response. we are told by many that we have been saved by a great depression. that is impossible to prove. had told us that if we did no

you do need more of a down payment to get those kinds of rates from fannie mae and freddie mac.tunity to get lower rates directly. host: keith on the republican line. caller: my wife and i have been trying for a year, since last january, to get our mortgage company to help us modify our mortgage payments of it without -- so we would not go out into default and they have put option -- put us off. every time we contact them they tell us to fill out of work that we have done it multiple times. then we send it in and they put us off again. we have been trying for a year to get them to help us. what do we do? guest: have you worked with any third parties like housing counselors across the country, or the hope hotline? a third party can get the documentation and push it out to your lender. because there's a lot of good access and held out there from a third party if you are not getting the support you need. caller: yes, we have tried that. we tried someone locally that was affiliated with our mortgage company. we got on conference call with them and us and we tried to resolve this mat

. >> larry: didn't you support fanny mae? >> for rental housing. yes. i opposed it. i think pushing people into owning houses when they can't afford it was a mistake. i was pushing for rental housing. >> larry: ron? >> doint think we should make those decisions. he may be right. i like people to make their own choices. but i do think we push some of the programs with community reinvestment acts and easy creddy. there are things that encourage it where i'm convinced if we had a sound or monetary system or didn't have the ease credit -- >> ron has it backwards. the community reinvestment act is not the problem. it on the covers banks. to take insured deposits in thach made a small percentage of the bad loins. the bad loans were made and too little government, not too much. you had private citizens and we tried to get rules adopted to prevent them. >> barney, i didn't want him to think we agreed on everything. no, go ahead. >> larry: all right, the republicans today had a freeze today for a few hours on the debate incests that the 767-page amendment be read allowalloweo

you do need more of a down payment to get those kinds of rates from fannie mae and freddie mac. a year, since last january, to get our mortgage company to help us modify our mortgage payments of it without -- so we would not go out into default and they have put option -- put us off. every time we contact them they tell us to fill out of work that we have done it multiple times. then we send it in and they put us off again. we have been trying for a year to get them to help us. what do we do? guest: have you worked with any third parties like housing counselors across the country, or the hope hotline? a third party can get the documentation and push it out to your lender. because there's a lot of good access and held out there from a third party if you are not getting the support you need. caller: yes, we have tried that. we tried someone locally that was affiliated with our mortgage company. we got on conference call with them and us and we tried to resolve this matter and they still put us off. they will not help us. guest: i would escalate. pat 888-995-hope -- at 888-995- hop

no two institutions better fit that description than the government-sponsored enterprises fannie mae and freddie mac. over the years, some of us pleaded for additional regulations. you may recall in 2005 we tried to pass strong legislation to fix this problem and bring reforms to the government-sponsored enterprises. i brought an amendment to this floor to give their regulator the ability to rein in their mortgage portfolios that were spiraling out of control. the federal reserve came to us and said, these institutions at the heart of the u.s. mortgage market pose a systemic threat to our economy. that is why i offered my amendment which was defeated, as were others, that would have provided stronger regulation. that is why senator chuck hagel offered similar legislation which passed the senate banking committee on a party line vote but was blocked by the senate democrats from coming to the floor. we understood the risk posed by those government-backed companies, especially when it came to the affordable housing goals the democratic-controlled congress mandated in 1992. those afforda

fannie mae, freddie mac is ensuring this. we have to be very careful of the implications of what we're doing. >> the people who are holding those notes have been the greedy ones. i don't mind them losing because they get greedy and the first place. >> if pension funds and the federal reserve are the greedy ones. >> i don't think so. t not what you call the greedy folk. it's going to the folks around the world who suffer when we get inflation and interest rates going up. >> okay, thank you. >> next the chair recognizes mr. miller for five minutes. >> thank you mr. chairman. i was puzzled by mr. royces questions that would have on voluntary modifications. the congress did something very similar in 1986 to what we've proposed with respect to how mortgages. to allow modification of mortgages on farms. and it would reduce the amount secured to the value of the collateral, the value of the forum which is all that really is secured anyway. treating the rest has been secured and then set a term and interest rate that's a little bit a

that the black community has largely supported the programs that have caused a meltdown with the fannie mae and freddie. freddie talk about the programs that have encouraged the breakdown of the black community. i did tremendous work with a group called new york youth at risk who work with the most at risk members of community. the stuff that held these kids back had nothing to do with the programs you are talking about the greatest metric you should focus on is single-parent families. it has nothing to do with government progress. it does have a tremendous moral program -- breakdown of morality within that community. hollywood encourages that. here is an interesting statistic. if you take away the metric that has to do with single-parent -- primarily the mother families -- correlate that with incarceration, the difference between white and black incarceration disappears. when you look at that statistic and say that society is broken do to racism, no, it is broken because of single parents in the black community. guest: we're members of congress. we're public policy makers, not members of t

host: you have talked about phasing out fannie mae and freddie mac. >> that's right. crisis was not last september. we had a failure of fannie and freddie about two months before that, and secretary paulson asked for $300 billion to bail them out. we said we want to reform them and get the government out of the business, and really even the bush administration, and chairman franks is always saying, well, the bush administration helped us do this. it wasn't just the obama administration. it was the bush administration. well, the anger on the american people is directed it everyone. it is not any certain political party. it is at anyone who continues to, i think, intervene and bail people out, and shield people from their consequences of their actions. host: do you see a purpose to fannie mae and freddie mac? do you think they have helped americans? >> i believe they did supply liquidity, but i think what happened, if you go back and you didn't have it happen, then the main street banks would have done that. i think what actually happened is they became into the market

most of it under the hand of president obama, the nationalization of three large investment banks, fannie mae, freddie mac, a.i.g., the large insurance company, general motors, chrysler, all of that, swept through in a period of time of approximately a year. and at the tail end, framing the nationalization of those eight huge entities that represent about 1/3 of the private sector property -- about 1/3 of the private sector profits in the united states, framed on the other end of that nationalization effort on the part of the white house and those who supported that, was the $787 billion economic stimulus plan. all of this just raced us toward the nationalization of an economy, the socialization of our economy, mr. speaker. the american people looked at that and it went so fast and they didn't believe they had the expertise and they trusted wall street and they trusted big business in america and they believed, as i did for a time in my adult life that wall street was looking out for the foundations of free enterprise capitalism so that over the long-term, they could continue to do business i

emerson: fannie mae and freddie mac send the chills down our backs. the institutions at the heart of the worse financial crisis in modern american history. the crisis was explosive more than a decade in the making. during the slow leadup to the crash, fannie and freddie guaranteed that a national subprime lending problem would seep into every other financial sector of our economy. the g.s.e.'s ignored their public responsibility to assure a stable u.s. market for lending. so if that's the case then, why is this bill silent on their misdeeds and the perverse incentives that drove our country to the brink of financial disaster? as the government gets bigger this bill requires government to regulate everything but itself. as of october 31, fannie mae held $771 billion in its growth mortgage portfolio and another $2.8 trillion in mortgage-backed securities and other guarantees. there are omissions from this bill is glaring. it's irresponsible to exempt g.s.e.'s from this legislation. america, you must take notice. the speaker pro tempore: the gentlelady's

the republicans were stymied year after year opening up freddie mac and fannie mae and making them more we hadn't done so free with them, i don't think that the crisis would have happened. and several other mistakes, the idea of opening up mortgages to people that were not credit worthy, that was a huge contributor and that goes back to the carter administration. it turns out it was a mistake to force lenders to get into these risky mortgages. so i think we learned from history, but there is enough blame to go around. host: senator wicker is also retired u.s. air force, we have margett joining us from louisiana. caller: good morning, let me ask him these questions, sir. i am 76 years old, and i tell you what, we are not going to get a raise this year or next year on our social security. and sir, those people up there in the senate and house, they are always giving themselves raises. and yet the democrats are wanting to take medicare away from us elderly people. you know what? if they even dare do this or any of you republicans or anyone takes it away from us where we can't even -- i hav

i think we should take a hard look at fannie mae and freddie mac. that is all i have. host: we talked a moment ago about the founding of the fed in 1913. this information is from the fed website. they conduct the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. they are also in charge of supervising and regulating banking institutions to ensure the safety and soundness of the financial system and to protect the credit rights of consumers. they maintain the stability of the financial system and contained systemic risks that may arise and provide financial services. here is newark, new jersey. leo is a democrat caller. caller: i do think they have too much power. they were created in 1913. before they were created, the united states was a sovereign nation. she did not kno0 anybody any mo. a certain group of people were trying to establish a way to print money. that is when they came up with the federal reserve act in 1913 to create the federal

acorn was it they came to this congress and asked us to lower standards for fannie mae and freddie mac said they could pick off the loans that have party been shaken down by them? and a shakedown term is not mine. that is the chairman of the judiciary committee, john conyers, who put that into my years. a number of the appropriations committees, this congress needs to do it full court press. i'm interested in hearing from one of the witnesses to see if he has the resources to do way investigation of the national organization that are engaged in these things, including the of the small -- the embezzlement process, the coverup, the facilitation of false and fraudulent voter registration forms, and by the way, i will make a point also that i believe that when this investigation is finally finished, whether it is done with legitimate investigation of state and federal authorities working in conjunction with congressional investigations and hearings, or whether it is finally uncovered by the historians, we are going to find out that these roads falling acorn to lead to the white house. we k

. >> matt: fannie mae sullivan the in up one three-point shooter on this auburn team nails the threes the horn sounds. and virginia who led for most of the first half still does but their lead only two as they go to the locker room. ( thumping ) ( rhythmic clapping ) ( chanting ) ( shouting ) gatorade-- that's "g." >> matt: and we are back halftime at the beard-eaves coliseum on the campus of auburn university. virginia with a 34-32 lead at halftime. but it was five and now it is two because frankie sullivan nailed one right before the horn to give the tigers a big dose of momentum going into the lockinger room. >> daymeon: not quite sure if coach jeff lebo called it like this or drew the play up but a big-time shot but the sophomore in frankie sullivan. more,sn't play like a so mar, matt. all tournament team at daytona beach and a guy who i think really is kind of the future for this auburn team. >> matt: in this ballgame we have seen one of the best freshmen from a year ago, sylven landesberg who was named the acc fresh man of the year. let's take a look at six of this year's top f

collar criminals whose fraudulent behavior caused this mess or bring to justice the wrong doers of fannie mae and freddie mac. there are bills to do that but not included in this bill and puts the treasury department, so much a part of the problem, in charge of the financial services oversight council. it fails to strengthen independent financial regulatory and supervisory agencies. the political appointees on this oversight council are clapping in the wings. this bill gives more power to the federal reserve. and you know, you would think that after all the damage that's been done in the republic, this congress would have the guts for real reform. this bill isn't it. and i urge my colleagues to vote no on final passage. i yield back the remaining time. the speaker pro tempore: the gentlelady's time has expired. the speaker pro tempore: mr. paul from texas, ms. woolsey from california. mr. smith from new jersey. mr. sablan from the marianas. mr. pitts from pennsylvania. ms. kaptur is already gone. mr. stupak from michigan. and ms. foxx from north carolina. for what purpose does does the the ge

i have some plans for treasury and fannie mae and freddie mac. >> you are as good as it gets. how about helping us in coming up with a concept or a mechanism to do that back option, and let's not create a new bureaucracy. some sort of additional authority to the trustees are whatever. i am really concerned about this. i am going to turn the gavel back to the real chair of the commercial and administrative law subcommittee, mr. steve cohen of tennessee. >> i thank the distinguished gentleman from massachusetts for that discussion that he led and for the time he spent and for his many good words and years of service to the bay state as well as the united states. i'm sure is he is disappointed as i was in the vote today. there were several votes that i was disappointed and. sarbanes-oxley was not fully implemented. and the cramdown position, loan modifications were not pass, but we passed a bill. you do not get everything. i appreciate you all being here. if you can bring something to us to consider, it looks like -- although you can put these provisions on other bills. that is t

conservatives say it was when fannie mae and freddie mac was forced to lead people who could not possiblypay it back. other people think it is when the sec fell asleep at the switch and allowed banks, mortgage banks to do investment- banking. other people think it is when the s&l crisis happened. everybody has a moment, but it was a collective failure in washington. the point the caller is making a thing is inarguable. you had democratic president, democratic congress narrowly gone along -- the early going along with no longer needed regulation. of course it needs to be regulation trip. host: jim on our lines from seattle washington. the release of the movie "avatar, cut its computer generation -- the lead caller: the release of the movie "avatar," this computer- generated effects. additionally, the film has two themes that are in the public discourse right now and will be for the next decade and beyond, and that is the treatment of our environment and the ethics and prudence of one nation invading another for its resources or any other reason. thank you. host: thank you. guest: well, i t

conservatives say it was when fannie mae and freddie mac was forced to lead people who could not possiblyay it back. other people think it is when the sec fell asleep at the switch and allowed banks, mortgage banks to do investment- banking. other people think it is when the s&l crisis happened. everybody has a moment, but it was a collective failure in washington. the point the caller is making a thing is inarguable. you had democratic president, democratic congress narrowly gone along -- the early going along with no longer needed regulation. of course it needs to be regulation trip. host: jim on our lines from seattle washington. the release of the movie "avatar, cut its computer generation -- the lead caller: the release of the movie "avatar," this computer- generated effects. additionally, the film has two themes that are in the public discourse right now and will be for the next decade and beyond, and that is the treatment of our environment and the ethics and prudence of one nation invading another for its resources or any other reason. thank you. host: thank you. guest: well, i th

acorn was it they came to this congress and asked us to lower standards for fannie mae and freddie mac said they could pick off the loans that have party been shaken down by them? and a shakedown term is not mine. that is the chairman of the judiciary committee, john conyers, who put that into my years. a number of the appropriations committees, this congress needs to do it full court press. i'm interested in hearing from one of the witnesses to see if he has the resources to do way investigation of the national organization that are engaged in these things, including the of the small -- the embezzlement process, the coverup, the facilitation of false and fraudulent voter registration forms, and by the way, i will make a point also that i believe that when this investigation is finally finished, whether it is done with legitimate investigation of state and federal authorities working in conjunction with congressional investigations and hearings, or whether it is finally uncovered by the historians, we are going to find out that these roads falling acorn to lead to the white house. we k

host: what is the role of fannie mae and freddie mac and refinancing?uest: they are planning a major role in refinancing now. they are part of the administration's new refinance program and it started off working really well. ñrit is a well thought out progm on refinancing. it allows you to refinance if you are as much as 125% upside down, meaning your mortgage is valued as more than 125% of the actual cost of your home. that is a solid program. the problem we are facing in this market is not so much refinancing, but it is the loans in imminent threat of default or are actually already in delinquency heading to foreclosure. host: you mention the second wave in 2010. how big is it? guest: a huge wave. one of the big challenges, we started with a lot of unfair deceptive products and mostly at households who really were not sophisticated about the market. so when they were told how the mortgages work, which is not accurate, in terms of how the housing market worked, we did not all of the sudden wake up one morning and find 3 million of 4 million people jus

host: what is the role of fannie mae and freddie mac and refinancing? they are planning a major role in refinancing now. they are part of the administration's new refinance program and it started off working really well. ñrit is a well thought out progm on refinancing. it allows you to refinance if you are as much as 125% upside down, meaning your mortgage is valued as more than 125% of the actual cost of your home. that is a solid program. the problem we are facing in this market is not so much refinancing, but it is the loans in imminent threat of default or are actually already in delinquency heading to foreclosure. host: you mention the second wave in 2010. how big is it? guest: a huge wave. one of the big challenges, we started with a lot of unfair deceptive products and mostly at households who really were not sophisticated about the market. so when they were told how the mortgages work, which is not accurate, in terms of how the housing market worked, we did not all of the sudden wake up one morning and find 3 million of 4 million people just rec

we have also had a very big program of purchasing fannie mae and freddie mac mortgage based securities. the current program will be wound down, tapered off through the first quarter of next year. that's currently on schedule. so what we have is a -- if you will, a lolling exit process. the special programs are running off because of lack of interest. they'll be shut down over time. we've bought a lot of treasuries and mbs. we've announced tapering off of those programs. the next step, at some point, when the economy is strong enough, is to begin to tighten policy, raising interest rates. we can do that by raising the interest rate on excess reserves. congress gave us that power. by raising that rate, we can raise rates throughout the money markets. we will reduce the amount of reserves in the system. we'll do that over time. from a technical perspective, we have plenty of clarity about how to commit from the programs. how we can tighted policy, raise rates, remove the accommodation at the appropriate time to get a sustainable recovery without inflation. the xun occasion, timing, and so

we were writing about fannie mae and freddie mac problems well into the beginning of this decade. one where i think we can take a little pride. but i am not going to sit here and say that we saw it all coming. certainly not the severity of it, or that we should be congratulated. host: yesterday, our guest john hilsenrath had a piece posted online at washingtlaw street jol but come. we have a twitter comment saying of a " history will show that low interest rates caused most bubbles." guest: that is something that has come up a lot, and it came up at bernanke's confirmation hearing yesterday. it certainly looks like that on the face of it, that the fed kept interest rates too low for too long. bernanke's argument was that if you compare what happened in the united states to would happen in other countries, then the logic of interest rates too low does not hold up because the british, for instance, had higher interest rates than the u.s., and they had a housing bubble as we did. you had other countries like the germans, who had relatively easy monetary policies, and they did not hav

. >> there may be more money needed for fannie mae and freddie mac. >> i go back to the point that bill made -- we are talking now about trains of dollars that have gone out to a huge private -- trillions of dollars that i've got a huge private institutions, and we do not know how much money and under what terms it went out. we do not even know who received 0% interest rhones -- loans. >> what you think you're one of very few members -- why do you think you're one of the very few members to see this? >> let me tell you a secret. wall street is very powerful. not quite as strong as the drug companies. this is washington, d.c. the financial institutions in the insurance companies over a 10-year period spent $5 billion and lobbying and campaign contributions in order to deregulate wall street. to do away with glass- steagal and other laws to protect consumers. you must understand the enormous influence they have over the political process in this country. ben bernanke is there a guy. and they want their guy to stay in office. and they're pulling out all the stops to make sure that that hap

. $91 billion in bailouts for fannie mae and freddie mac. those, of course, are the g.m.a.'s set to housing programs. $73 million in unemployment benefits due to the recession, again, associated with this loss in tax revenue due to the fact that so many americans are unemployed and the fact that the stimulus dollars that we spent were not adequately weighted toward infrastructure construction like what the bill that mr. austria and mr. lance and i co-sponsored at the beginning of this year. and then $112 billion in other accumulated bills throughout the course of this year have gotten us to this point. $1.4 trillion in deficit. now i'd like to yield to the gentleman from new jersey, mr. lance, to talk more about what are the consequences of all this debt? mr. lance: thank you very much, congresswoman lums, for your leadership and certainly it is a pleasure to be associated with this special order and i commend you for your knowledge about what is occurring here in washington. it's also a pleasure, always, to see our distinguished freshman colleague, congresswoman dahlkemper,