that is one problem with freddie mac and fannie mae. they had this culture where they were a company that issued stock but had government man dates. that -- mandates. that got them into problems. one thing also is interesting about the united states of america is involvement that we have in home ownership through government programs, whether it is fannie mae and freddie mac, ginny me or f.h.a. you don't see that in other countries and western europe or australia the amount of government support. as policy makers go through and examine that they will look at other countries. no one had a fannie mae and freddie mac like we did. very few countries had even a ginny me which is a government owned corporation. they are saying if these countries do it and they have home ownership rates comparable and sometimes better than the united states is there something we can borrow from their system and incorporate into ours. host: what are some examples of what they are doing? guest: there are a lot of countries that could do, for instance, there is co

but there's no question that come 2005, 2006, 2007, fannie mae and freddie mac jumped in full force. because of their scale in the market, they have an impact, no question about it. >> if you are going to say that fannie and freddie played a role, will you also be looking at the royal congress played in putting pressure on fannie and freddie to issue these types of loans and take on more risk so more americans could buy homes? >> absolutely. we are looking at what congress did over a long time in terms of policy regulation. we will look at what regulators themselves did. but i also want to point out that in many respects, fannie and freddie had a lot of characteristics as did the wall street firms. while they were created by the government, they were publicly traded corporations with a lot of compensation incentives that led them to take big risks. there are very concerned about their market share. so we will be looking not only at policy, but we have also been looking at what the management did and why it jumped in feet first. when you look at the compensation paid to the executives,

today the big news on thursday that the fannie mae and freddie mac, the government mortgage companies, will need billions more dollars of government support out of the financial crisis. they may come to the most expensive part of the crisis. can you tell us which degree that fannie and freddie played in the crisis? were they a cause of the crisis? >> we've looked extraordinarily hard at this issue. we've devoted a lot of time, energy, and resources to it. i would say just for context, i mean, often people think of the tarp program and as you know government officials are now saying that won't cost as much. but in the end, the taxpayers of this country would have shelved out trillions of dollars through two dozen programs to stabilize our financial system. look, there's no question that fannie and freddie, because of their scale, because they were deeply involved in the mortgage market, played a role. we're in our deliberations so i don't want to get ahead but i'll give you a couple observations. at least from the information i've seen, while fannie and freddie were clearly disasters,

the federal regulator says the taxpayer bailout, fannie mae and freddie mac could blow up and blow up 363 billion dollar of your dollars. and the government helping struggling home owners pay off their mortgages. what about the people who already are? hi everybody and welcome, i'm neil cavuto. and charles payne, dagen mcdowell, and adam lashinsky. charles? >> well, you know, i really believe-- we know this fannie mae, freddie mac thing, this 300 billion i think we'll be talking about a billion-- a trillion rather, soon. >> neil: figure right now. >> it's an unlimited paycheck, it's taxpayer money, but i think part of this is the philosophy, if you're a home owner and you're paying your bills and you have a job, you say, maybe, you know what, you've got that anyway from some unfair means, maybe, you know, something was unfair, why do you still have a job and therefore, you actually owe it to the rest of us. you have to, you know, you owe it to the people who can't pay their bills, so, you should be upset about this, somehow, you're staying in a job you should have the in first place, a

fannie mae and freddie mac are offering financial advice. i am serious. a new congressional oversight panel says the treasury department paid fannie mae and freddie mac nearly a quarter billion to run tarp. these are the same folks who helped dig the housing ditch for which tarp was supposed to dig us out of. and former governor huckabee. what we are doing is putting the inmates in charge of the asylum? >>reporter: we have to recognize the inmates are in the asylum but the guards also are as insane as anyone being placed there. this is one more reason i am so glad i was against tarp. i get lectured almost every week. >>neil: you were way ahead of a lot of people. >>guest: as recently as this week i was chided by another republican for not realizing how important it was that we did tarp and how it saved us. that is like the democrats saying we saved another million jobs. what we did, we teed up for the obama administration to continue this policy of bailing out businesses because we say they are too big to fail. the other side of too big to fail is all the

the bad guys were in congress at fannie mae and freddie mac. >> paul: one more break.we come back, hits and misses of the week. [ j. weissman ] it was 1975. my professor at berkeley asked me if i wanted to change the world. i said "sure." "well, let's grow some algae." and that's what started it. exxonmobil and synthetic genomi have built a new facility to identify the most productive strains of algae. algae a amazing little critters. they secrete oil, which we could turn into biofuels. they also absorb co2. we're hoping to supplement the fuels that we use in our vehicles, and to do this at a large enough scale to someday help meet the wor's energy demands. did you know a problems ain your heartugh scale can cause a stroke in your brain? it's true. an irregular heartbeat, called atrial fibrillation, or afib, can make a blood clot form, here, in your heart, thstraight to your brain where it can cause a serious stroke. having atrial fibrillation gives you a 5 times greater risk of stroke than if you didn't have it. strokes that are twice as likely to be deadly or severel

fair, if barney frank lost that race in massachusetts. >> he was the biggest single enabler of fannie maeeddie mac in the house of representatives. >> in 2004, fannie and freddie bragged that countrywide held 20% of the single home business, but this was an enormous-- >> countrywide issued the submarine prime loans to many people who couldn't pay and sold those to fannie mae allowing countrywide to issue even more loans, so that they were business partners in a fundamental sense. but-- >> well, i think there's a big less on son here, we often hear people say, why can't business and the public sector work together more, private sector, public partner, this was the biggest private-public partnership in the history of the world. more corruption and possibly criminality. >> paul: here is what it is, private profits, socialized risks. that's what a public-private partnership often ends up with. >> i think the problem with it mozilo, we got, that's the end of it. those in congress and-- >> the regulators. when we come back hits and misses of the week. [ male announcer ] opportunity is a powerfu

fannie mae and freddie mac in 2001. the republican party wanted to destroy freddie mac and fannie mae. what they did was that they took in, and just basically the - got rid of those who were running freddie mac and fannie mae and they put in those people in about 2003 to run those. at the time that happened, freddie mac and fannie mae went in and bought these bundles and this is part of the problem. and i - and i - your grinning at me. i understand i don't know what purpose there. is other thing too is that, just like the oil industry. we have put mortgages into the commodity industry, and this is the part of the problem, and thank you for listening. host: john let me get to the fannie mae and freddie mac part. you have served on the board is of each of those? guest: yes, i was a big critic of them for what they were doing and not doing. i tell you, there's been so much miss information about the role they played. there's no question that staying out of this. predator lending for a very long period of time. they did ver

i hope he does a better job on foreign policy than he did as executive vice president of fannie mae. i think the biggest picture is the turnover. they lost the chief of staff, national security advisor, budget advisor, top economic aide, chairman of the economic advisory council. head of the national security intelligence board. white house council. we have the privilege of being at the white house senior staff meetings and those are the most -- of the five or six those are the most senior people in the white house senior staff. they are all gone. it is amazing and suggests there was more turmoil than the white house press corps perhaps captured going on at the obama white house. on the other hand it gives them a chance for a bit of a fresh start after the election. i'm not so sure it is a bad thing. we could sit here and say chaotic and embarrassing to lose these people within two years and it is such a great privilege to work there that people should want to stay there and help the president and the country as long as they can. people walking away. rahm emanuel who wanted to be may

and now the scandal has touched mortgage giants fannie mae and freddie mac because they used law firms that have been pumping out foreclosure documents. kelly cobiella on the crushing falloutav all of this on home owners. >> reporter: when donnie thomas fell two months behind on his mortgage in 2008, he tried to reach his lender to make a deal. >> that's when default was put on my door. that's when i said i-- they says 30 days to move out or something. >> reporter: the lender foreclosed, repossessed and resold thomas' home in three months. his attorneys believe it's another case in another stack of foreclosures pushed through by so-called robo signers. the lawyers interviewed 150, among them out of work beauticians, wal-mart clerks and fast food workers given impressef titles but with little or no experience, hired to sign paperwork as fast as they could. >> they're signing fault affidavits. they're signing affidavits that would say things like every allegation in the complaint is true, and they never saw the complaint. some of them had no idea what a complaint was. >> reporter: in one

fan any -- fannie mae and freddie mac aided, the housing crisis. they were the conveyor belt for all that came out of wall street. all of a sudden they waded in, one year you do not put 1.7 trillion worth of bad loans on your sheet. they didn't get out like everybody else, they were reckless. >> neil doesn't it concern you some might be encouraged not to pay their mortgage bus they see so many let off the hook? >> there's a huge moral hazard. what we are doing now is compounding it. with the fha, allowing people to get new homes with only 3 1/2% down. we are encouraging people to take on loans they can't afford to pay back. they are giving them tax breaks up to $10,000. if you can't afford a house we've decided we are going to throw bad money after the good and still sell morehouses to people who can't afford them. as a way to support the housing market >> vicious circle going on. >> neil is right david. the big problem is with all this involvement from washington taking over the housing market, it hasn't allow home prices to reset. we still have a

one of the tools the federal government had over the years was fannie mae and freddie mac. what is the, this show another shows -- obviously, this show and other shows talk about the downfall that occurred with these two housing gse's. the japan had a secondary market -- did japan have a secondary market in the 1990's? did they create that? we used to have housing recessions in the oil patch, going back to the 1980's, and part of fannie and freddie's structure was to ensure that the entire regional disparities in the housing market place did not occur. host: ok, we will get an answer to that question. what do you do for a living? caller: i work in the housing finance sector. host: thank you. mr. hilsenrath. guest: japan was and remains a very bank-centered economy. most of the financing of real estate went through the japanese banks. you have to realize, it is geographically, and a sparse population, a smaller country -- and as far as population, a smaller country. it did not have the widespread secondary market at the united states has. when the japan's real estate when th

fannie mae and freddie mac own or guarantee nearly $200 billion worth of past-due mortgages that could be foreclosed. uncle sam took control of the mortgage siblings in september 2008. since then, taxpayers have given the companies $150 billion just to stay afloat. james lockhart spent three years as the chief regulator of fannie and freddie, beginning at the height of the housing bubble. he thinks the foreclosure paperwork mess will make the cost to taxpayers even more. >> there is a foreclosure process. different states have a different process. in many states it takes a very long time, and in the meantime fannie and freddie are not getting any money, not getting any principle payment on the mortgage and as a result, effectively the taxpayer is giving a free loan to the homeowner. >> reporter: the average homeowner in default hasn't made a payment in over a year. but it's not just homeowners who may get a free ride. investors in mortgage backed securities guaranteed by fannie and freddie keep getting paid until a home is foreclosed and taken off the books. karen shaw petrou says fore

well, freddie mac, fannie mae, fox, guess which "f" congress is blaming for a congressional seat.ge! >>neil: this is a fox technology alert. our servers cannot handle the tremendous influx of voters trying to participate in the "your world" poll. that many. tens of thousands. hundreds of thousands. probably millions. trying to answer today's question: who was right on shovel ready jobs? the president of the united states? or the guy many of you say should be president of the united states? enough about me back to me and my poll on the fox website. of the 1,600 that got through before the service crashed because millions were trying to vote simultaneously, 99.51 percent say i was right on shovel ready jobs and eight individuals have said the president was right. it emmates from the white house, the url, on those eight individuals. i have no idea if that is true. the attacks multiplying that barney frank could be sliding in a fundraising letter where he says the tea party is part of the right wing and we have two words "get ready." the freedom watch, and now judge napolitano. and i

mac, and the financial reform bill did not address fannie mae and freddie mac.ave seen a recent report, $124 billion might have to go to sustain fannie mae and freddie mac. we have to address that so we don't keep putting our taxpayer dollars into it and really get a vibrant, private housing market going with our economy. >> what is critical is that we stop the abuses that led to the crisis. i voted against the wall street bailout. i voted against it because i said we need to help small businesses and we need to deal with the foreclosure problem at the beginning, not wait until now. we should have done it when there was 20% in the subprime market. now we have to have stronger reform. my opponent wants to repeal wall street reform. she favors policies that will let wall street run wild again and do exactly to was what they did before. barney frank and i did not see eye to eye, and i think we should have done something about fannie mae and freddie mac earlier. as a senator, i will make sure that we put in place tough new regulations to make sure that homeowners ar

eventually fannie mae will buy into them.out going through the painstaking effort of visiting each county office, filling out the forms, paying the county fee, et cetera, et cetera. they just as soon as the mortgage is made, they throw it into the black box that is mers and then when they need a document at the time of foreclosure or sale, then they have the document produced. and the critics are saying, hey, the mortgage system never got legislative authority to do that. >> interesting story. all right, allan, thanks very much. >>> could legalizing and taxing marijuana help pull california out of its budget crisis or open the door to more crime, greater addiction and safety issues? talking politics, money and marijuana up next. >>> three weeks to election day, 21 days. one of the hottest issues on any state ballot is california's proposition 19. it would legalize marijuana for recreational use. legal sales of marijuana for medical use are already a proven moneymaker in the state. supporters say recreational sales would only

secondly, freddie mae and fannie mack -- fannie mae and freddy mack, they keep sweeping that away.this last finance reform bill, we could have dealt with freddie mac and fannie mae, but they said it was too big to deal with. we need to start looking at these and looking at true solutions. first, we have to investigate what caused the problem in the first place. this problem has been going on ever since senator reid has been in leadership, and that was before the obama administration, but they failed to do with it in the obama administration as well. >> we do have a commission. to find out what really happened at the collapse. i called for a federal reserve audit in 1985 -- 1987. so i agree with my opponent on that. there should be an audit. we have not gotten that yet, but we have made some progress. fannie mae and freddie mac, all experts say it needs reform. but you cannot do away with them. we would have no way of sustaining the housing market we have today. our next question goes to, ms. angle, and it is on unemployment record. t. you're quoted as saying we can make more on une

secondly, freddie mae and fannie mack -- fannie mae and freddy mack, they keep sweeping that away.n this last finance reform bill, we could have dealt with freddie mac and fannie mae, but they said it was too big to deal with. we need to start looking at these and looking at true solutions. first, we have to investigate what caused the problem in the first place. this problem has been going on ever since senator reid has been in leadership, and that was before the obama administration, but they failed to do with it in the obama administration as well. >> we do have a commission. to find out what really happened at the collapse. i called for a federal reserve audit in 1985 -- 1987. so i agree with my opponent on that. there should be an audit. we have not gotten that yet, but we have made some progress. fannie mae and freddie mac, all experts say it needs reform. but you cannot do away with them. we would have no way of sustaining the housing market we have today. our next question goes to, ms. angle, and it is on unemployment record. t. you're quoted as saying we can make more on u

fannie mae's name is nowhere to be found on the documents.e lawyers say the bankers are not following proper legal procedure. this is assignment of mortgage meant to shortcut the system. it's less about the truth and help get the property foreclosured on. >> what did you get wrong? >> reporter: the servicer of the loan says there's no foul play here. this is how it operates all the time. in fact, citimortgage owned the loan very briefly, for only a couple months back in 2006. the original lender, home loan center sold the mortgage to citimortgage on november 3, 2006. the very day she borrowed the money. less than two months later, citimortgage turned around and sold the loan, as an investment to fannie mae january 1, 2007. the mortgage documents is dated june 24, 2010. that information on the document comes from a virginia company owned by citimortgage, fannie mae and other big mortgage players. mortgage electronic systems. when banks sell a mortgage, they use it to keep track. they have 64 million loans in the data base. if a bank wants to f

fannie mae owns it with millions of other home loans. fannie mae's name is nowhere to be found on the document. citi mortgage produced in the bankruptcy case. instead, the document states the mortgage was assigned to citimortgage. the lawyer says the bankers are not following proper legal procedure. >> this is an improper assignment of mortgage meant to shortcut the system. it's less about the truth and more about how fast can we get the property foreclosed on? >> reporter: citimortgage that collected the monthly payments as the servicer of the loan says there's no foul play here. it's normal procedure. and fannie mae agrees pointing out this is how it operates all the time. in fact, citimortgage owned the loan very briefly for only a couple of months back in 2006. the original lender home loan center sold the mortgage to citimortgage on november 3rd, 2006. the very day she borrowed the money. less than two months later, citimortgage turned around and sold that loan as an investment to fannie mae on january 1st, 2007. yet the assignment

fannie mae and freddie mac. and you know what?ation has done to fannie mae and freddie mac? exactly nothing. this is the epicenter for the entire crisis and we have done nothing to solve it and i think that is really for two reasons. one is the politics of it, if we were trying to solve it we'd have to have congress admit maybe we shouldn't be forcing people to buy house or pushing people to buy houses and wouldn't think that three-1/2% was a fiscally responsible down payment. but, more importantly, when we look at fannie mae and freddie mac, we have to look at the economics of this, we have dumped billions, tens and hundreds of billions of dollars into this and in fact the agency that regulates them came out yesterday and said by 2013 we will have dumped between $221 billion and $363 billion. they are not too baying ig to f they are too big to i-96 they say the republicans will repeal the land you trash the economy and what is the g.o.p.'s plan and does it make sense? obviously, less regulation according to them is better. but, a

department of defense, if we go to the jon stewart co., there are days when somebody got fired from fannie mae and they made a lot of money and someone is not respected. what he supervisors should do it is that you did not want property managers to be involved in huge development where they get millions of dollars from the state. they had a lot of money and john stuart employs over 1000 employees. what we need in the bay view is for local people to build those houses. this would have been the opportune time for -- to come and speak on behalf of the constituents. this is an area where over 50% are unemployed. people i've been promised this, that, and the other. nothing is happening. we need you to put this back up. is there any other member of the public that would like to comment? a motion to move forward with recommendation in that passes without objection. that is our agenda, is that correct? >> we are adjourned. the biggest issue in america today? segregation still exists... racism... the repression and oppression of women the educational system stem cell research homeless people cloning go

donilin's action at fannie mae to undercut meaningful reform participated the largest taxpayer-fundedity." >> i feel like i should echo and say i have had productive relationship with tom donilin. hopefully he has better job with foreign policy than as president of fannie. the picture is the amazing turnover. in less than two years of the administration they lost the chief of staff, national security advisor, budget director, top economic aide larry summers, chairman of the economic advisor, head of the national intelligence board denny blair, white house counsel, greg craig. dana and i have been in the staff meetings and those are the important -- intelligence director and the others are the most senior people in the white house staff. they're all gone. amazing. it does suggest there was more turmoil than the white house press corps captured going at the obama white house. on the other hand, gives them a chance for bit of a fresh start after election. not so sure it's bad thing. we can sit here and say it's chaotic and it's embarrassing to lose the people. it's a great privilege to w

i hope he does better with foreign policy than as the executive vice president of fannie mae and theig picture is the amazing turnover, within less than two years of the administration they lost their chief of staff and national security advisor and budget director, and, top economic aide, larry summers, chairman of the council of economic advisors, head of the national intelligence board, dennis blair, white house counsel, greg craig, and we have had the privilege of being at white house staff meeting and those are among the most structures, and the five or six are the most senior people in the white house senior staff and they are all gone. it is pretty amazing and suggests that there was more turmoil than the white house press corps captured, going on at the obama white house and you know, give them a chance for a fresh start that he have election. i'm not sure it is a badening from his point of view and we -- thing from his point of view and we could say it is chaotic and embarrassing to lose these people and it is a great privilege to work there and people should want to stay th

fannie mae owns it along with millions of other home loans.here to be found on the assignment of mortgage document citimortgage produced in the bankruptcy case. the document states the mortgage was assigned to citimortgage. her lawyer says the bankers are not following proper legal procedure. >> this is an improper assignment of mortgage that's meant to shortcut the system. it's less about the truth and more about how fast can we get this property foreclosed on. >> citimortgage which collected the monthly payments says there's no foul play here. it's normal procedure. fannie mae agrees pointing out this is how it operates all of the time. in fact, citimortgage owned the loan very briefly for only a couple of months back in 2006. the original lender, home loan center, sold the mortgage to citimortgage on november 3rd 2006, the very day she borrowed the money. less than two months later, citimortgage turned around and sold that loan as an investment to fannie mae on january 1st, 2007. yet the assignment of mortgage documents stating citimortgage

>> cannot testify as to what fannie mae and freddie mac did in reference to mers. mers has been part of the mortgage securitization system for a long time and there have been many legal cases on it. >> is it the opinion of the department of treasury that mers system works to deliver a good legal title to property? that it properly allows notes to be endorsed, and allows for proper sign hinges-- signages. >> we are continuing to dig deeper on this, but at the early stage it does not appear to be a fundamental legal issue, but rather how mers is used based on a different state and local laws governing the real estate transactions across the country. there is still more work to be done there. >> ok, let's say that in the ceo of a too big to fail, and i made a lot of second mortgage loans. i know that people are encouraged me to write this off, but if i do capital will be impaired, and will be a substantial loss, and i will be hurt, possibly put out of business. so, my response to people ask me to write them off is that i may have the money today, but in another couple

. >> coming up president obama's new advisor was a fannie mae executive during the housing boom.om donlan the best choice to help with security. >> and uncle sam has banned texting and talking while driving and now they want to ban hands-free, too. is the federal government going too far? we'll debate it. ♪ [ e. clark ] i'm an engineer. i love my job. i can see what's it's doing for the community on a day-to-day basis. natural gas is cleaner burning than most fossil fuels and it's vital to our energy needs. increasingly we're finding gas in hard to reach areas, but now we've developed technology that enables us to access gas in hard rocks so we can bring more fuel to homes and help provide a reliable source of energy into the future. ♪ into the future. activia is better than ever! hey, you guys. want to try activia's great new taste? isn't this the yogurt that, you know... helps regulate your digestive system. ooh, i think i'll pass. no, no, no! trust me. it is beyond tasty. mmm! wow! i can't believe it, i love it! mmm, this is really good! new best tasting activia ever! ♪ activi

and we are just representative of fannie mae. then i --. >>shepard: do you have a place to stay?. >>shepard: and so that is the state of things. we will find out what happens moscow and we will let you know. good luck to you and your family. >>guest: thank you. >>shepard: the f.b.i. searching for two suspects considered armed and dangerous. they are wanted in connection with a deadly armored trust -- truck heist. 29 days until the midterm elections and we have it covered. stay tuned. let me tell you about a very important phone call i made. when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out o

>>neil: that law you are braking -- law you are brag out leaves out fannie mae and freddie mac.there was a hearing on wednesday and there will be action taken to result, and major action on fannie mae and freddie mac but the fact is, the middle-class is always the target. >>neil: on monday i will start eating salad. the reality is, you gave a pass to the very culprit of this entire crisis and the reason why memberships when they are questioned on this, and you are tipping the hat to tarp but they don't share your zeal and your glee and 86 percent of them feel that the economy is still rotten, and 15 out of ten c.e.o.'s feel they have in reason to spend and expand, is because they are not optimistic, they don't see the government getting out of their way, they don't see regulation, and they don't see taxes easing or the environment improving so they are on something or you are on something. >>guest: they look for the days when there are no controls. c.e.o.'s have tremendous salaries, they are not worried about increasing their salary and bonus but increasing department. >>neil: a

reform freddie mac and fannie mae. it is an abdication of federal responsibility by not doing so. >> just a reminder, please keep the applause to a minimum. the third question is addressed to greg knott. do you support the extension of the bush administration tax cuts or only those for the middle class? how would your policy affected the debt? >> i would respectfully disagree with the wording. there is no such thing as a tax cut with borrowed money. it is not monopoly money. we have to quit pretending that because people are saying there is a tax cut, it is a true tax cut. it is actually a tax deferral. we have to pay it back with interest to china. that hurts our economic security. it is wrong. it is a wrong policy for southern indiana. i think if we are going to have true tax cuts, that will include spending cuts to pay for those tax cuts. i am the only candidate who has proposed spending cuts in the right areas. that includes wasteful military spending. we spend more than every other country in the world combined on

in fannie mae and freddie mac when he knew they would be bailed out. >>reporter: if you want to make big money in washington you become a special interest but having said that, i think all of the staffers should be under a responsibility not to invest in areas where their boss has oversight or they have issue knowledge. it looks back. it smells bad. it's above the fold on the wall street journal which is bad for senator reid. >> the aides say, no, no, this was disclosed. it is not like the wall street journal dug and found out it was hidden, it was above board. >>reporter: there are 1,700 financial disclosure forms and there are another 15,000 to 17,000 staffers that do not have to fill the forms out. so there could be more of this going on. they could be lucky. they could be trading information. it looks bad with america, with high unemployment, that staffers are getting good deals in stock and quick turn arounds and it looks bad. >>trace: what do you do? it looks bad. congress is exempt. how about the aides working for congress? >>reporter: the easy

fannie mae massive numbers of foreclosures.f the president obama does not want to do a full moratorium, but why not make the government owned entities, the ones the taxpayers own and control, let's start with them. let's say fha, a moratorium on foreclosures. fannie mae, a moratorium on foreclosures. give us the opportunity to restructure the mortgages. in essence, the american taxpayer are foreclosing on ourselves. people are fed up. we should be able to do this without $1 of taxpayer money. >> we interviewed new york supreme court justice arthur schack earlier this month he made national headlines for rejecting dozens of foreclosure filings due to faulty paperwork from banks and lenders. >> right now active foreclosures in brooklyn in my county are probably one-quarter of all the civil cases we have. there are 12,000 foreclosures that are somewhere in the pending whether the early stages or further down the road as the case develops where as we went back for five years ago, there were probably 3000 or 4000. we are getting bur

and fannie mae agrees, pointing out this is how it operates all the time. in fact, citimortgage owned the loan very briefly for only a couple of months back in 2006. the original lender home loan center sold the mortgage to citimortgage on november 3rd, 2006. the very day demilio borrowed the money. less than two months later, citimortgage turned around and sold that as an investment to fannie mae on january 1st, 2007. yet the assignment of mortgage document stating they still own the loan is dated june 24th, 2010. that information on the document comes from a virginia company owned by citimortgage, fannie mae, and other big mortgage players. mortgage electronic registration systems. when banks sell mortgages, they use mers to keep track of the real owners. if a bank wants to foreclose, it simply turns to mers for the necessary documentation, much faster and cheaper than retrieving local title records. but the mers papers like those for the home sometimes don't reflect the true status of the mortgage. >> we're seeing forgeries, we're seeing back datings, po

and that risk taking still exists inside of our federal reserve, inside fannie mae, inside freddie mac, those banks are now booking higher profits or excuse me, higher compensation than ever. wall street compensation this year up 23%. while profits are down 20%. and yet the business practices as we continue to learn are these. it all begs the question, i think of all of us, why is the federal government not only condoning and allowing this, but why is the federal government by way of the treasury department and the federal reserve helping to facilitate this and make it more difficult to solve? why won't they give us an audit of all the loans, 1.6 trillion of them inside of our government? many questions, not enough answers. however, a slightly encouraging sign today as a handful of democratic senators did send a letter to the obama administration and its leaders including tim geithner at the treasury and ben bernanke at the federal reserve calling for action on what they call a systematic problem. still, it will take much more than letters to sort out this mortgage mess, a mess that ha

they pass that loan on to an eventual holder such as pimco or fannie mae and freddie mac, and in betweenhich i think is an important analogy here, you have a referee called the servicer. the servicer is the referee on the football field to decide whether or not to call a penalty, whether or not the home should be foreclosed on. in many cases these servicers are the same banks and originators that produced the loan in the first place. so therein lies a potential for some of the conflict and some of the problems that we're beginning to see in terms of the interpretation of the foreclosure law. >> what are the implications of this type of development, and broadly the relatively tepid nature of the rate of economic growth right now on both government policy and investment and basically the dynamic of our own economy as we are forced to reconcile trillions and trillions in various housing agreements and all the rest of it? >> well, the more foreclosures that take place, the lower and lower the neighborhood goes in terms of its valuation and the potential for homeowners, or ex-homeowners to, y

no sign of that happening for freddie mac or fannie mae anytime soon.ngs playing a big deal on wall street. ebay and netflix beating expectations. ebay profit up 26% with a big boost from the paypal business. ist revenue up 22%. netflix up to 16.9 more subscribers in the prior quarter. that's 50% higher than a year earlier. it expects to be up to about 19.7 million by the end of the year. much better than what they had forecast earlier in the year. stock market is moving higher thanks to t is moving higher a inform strong earnings including caterpillar, travelers, dow up 57 points. nasdaq up by 16. s&p is up by 5. this coming off strong gains yesterday in which the dow closed back up over 11,000. sydnie and juliette? >> jason brooks with kcbs and cbsmoneywatch.com, thank you. >>> we are a little distracted here. we have some friends in the studio. >> celebrities, real stars. start making plans for the weekend. >> celebrities! >> oh, hey. >> we have a weekend of comedy and music and liam mayclem with some special guests. ♪ [ music ] >> well, good morning

we have fin reg with fixing too big to fail, yet we've got too connected to fail still, freddie, fannie mae, jpmorgan, why is this a danger? what should be done? >> the u.s. legislation you had the volcker rule which meant to separate the saving from deposit banking and that is incorporated but it's already diluted. and it left to the federal reserve to implement. >> and interpret. >> and interpret the regulations. and you can be sure that the republican congress, the regulations will not be very well introduced. so the principle here is recognize in the international negotiations, it's recognizing principle but nothing has been done. >> my thanks to george soros. next on "wall street journal report," serving up profits and hospitality. with the restauranteur behind the most successful spots. from union square to the road. find us on ♪ >>> americans ate more than 9 billion hamburgers in 2009, amidst weak consumer spending. diners rekindle the love for comfort food. burgers are big business at new york chain shake shack. the customer waits sometimes an hour to support the trend and the botto