fannie mae's stock price quadrupled from 1990 to the year 2000. by the year 2000 we had already been in the housing boom for about three years and the pool of potential borrowers was weaker. i only want to point out two elements of their characteristics. one, the down payment requirements basically had been replaced because these purchase money second mortgages could be -- bypass the private mortgage insurers and they could be funded in the capital markets or fannie mae itself was buying. so we no longer had the borrower with any stake in the game. a lot of these loans had teaser rates which means they didn't have to pay the full monthly payment and they didn't have to have enough income to qualify and they could refinance after the teaser rate was supposed to go to flit indexed rate. the borrowers worked only so long as house prices continued to rise. they didn't care what they paid for the house price because they were putting no equity into it. what that essentially leads to is a go for broke model. that is these were loans that people should h

fannie mae and freddie mac were cooperating. the fund of almost half of it and they did this to meet the housing goals because those securities counted for the gold at the same time they were competing with them for market share because they were required by the regulators to do it. so i called them pls. when they went for broke in the first half of the decade, fannie mae and freddie mac went for broke the competition with them. in the next three years to me and freddie mac went broke. i only have one slight left on fannie mae and freddie mac and then we are going to talk about how the private label securitization market worked. had there been a private label securitization market, fannie mae and freddie mac still could have caused a systemic crisis because they had no way of generating the capitol subsidy to get the home ownership rate of to 70%. now it's possible the politicians would have relieved them of that goal and just ignored it. with private label securitization going over the cliff, the market share mandate was going

he has a plan to shut down mortgage giants fannie mae and freddie mac.nd we'll talk to marc ginsberg. first up, this news update from c-span radio. >> it's 8:32 eastern time. comments this morning on the presidential election from former secretary of state colin powell. speaking earlier on nbc's "the today" show, he declined the endorsement he gave barack obama then a senator four years ago when he called president obama, "a transformational figure." he did credit the president with stabilizing the financial system and, "fixing" the auto industry, but he said he should have spent more time on the economy. as for mitt romney, colin powell calls him a viable candidate and says he's still listening to republican proposals. meanwhile, arkansas and kentucky hold their state and presidential primaries today. a total of 81 delegates are at stake in the g.o.p. president a.o.l. primary which is expected to bring mitt romney closer to the 1,144 delegates needed to clinch the g.o.p. nomination. mr. romney has 992 delegates, according to abc news. and the chief of t

fannie mae and freddie mac. which announced back stopped by taxpayers the exposures that the banks exposed to in the mortgage backed securities that they issued and especially for investors as well because if there is a break in the chain of title because mers now has lacked legal standing in several states. that what they may end up with in the six the half or seven trillion dollars in mortgage backed securities that are out there is it just that perhaps these were pushed back securities may be on securitized or unsecured and dr pham a lot of implications here is basically opened the door to this a characterization to these trillions of dollars of mortgage backed securities that break that had. rick and the economy into the financial system so when we get back we're going to talk more about that we'll have more with dr lanty pham former principal analyst and financial economist at the c.b. i will be back in just one minute stay right there also still ahead we'll have more with our was a blower dr pham about how

out there are owned by freddie mac or fanny mae.hose loans do we have any estimates on how many people are actually going to be able to benefit from this based on some of those restrictions, basically you have to stop paying, you have to know all these things about your loan, and the upward and downward price of your home as well. it's a lot. >> reporter: it's a lot. here is the deal. there are millions of borrowers who are severely underwater because they took out the subprime loans, negative am more tiization loans, the loans are basically no money down. what bank of america is trying to do is drive the principle balance of those underwater mortgages down to get this. 100% of the valve the home. that tells you where we were in the bubble where people were borrowing more than the house was worth. can you get this deal? you may not be able to until d.c. resolves the fight over whether or not freddie mac and fanny mae will be principle reductions. barney frank has got even involved. the overseer for freddie mac and fanny mae have got

the bill seeks to address barriers to refinancing that continue to exist in the program by fannie mae and freddie mac. fha made some changes to the program last year at the urging of members of congress and the administration and continued to hear from constituents in the housing industry that more could be done to encourage competition in the refinancing market and give homeowners additional opposition options as they navigate current conditions. the housing market continues to struggle with home values far below those seen a few years ago. despite the dramatic decrease in home values since their peak in 2006, many homeowners are upholding their commitments to pay these loans back. however, as we have found in previous hearings, these responsible homeowners are at a disadvantage when it comes to refinancing the loans at today's record low interest rates. they often have limited options when shopping for the lowest interest rate, because put back risks mean they can only refinance with their current servicer. the gses have not applied benefits in a consistent manner. which puts unnece

fannie mae reports a net income of two harass 7 billion in the january-march quarter. we will take a break and we will be right back. [ teen ] times are good, aren't they, kids? it's nice having u-verse, isn't it? see back in my day, we didn't have these newfangled wireless receivers. fangled? we had to watch basketball in the living room... that's where the tv outlet was. what is he talking about? and if mom was hosting her book club that day, guess what...you missed it! we couldn't just move the tv all willy-nilly all over the house. ohh! ohh! kids today have it so good. ok. [ male announcer ] the wireless receiver only from at&t. get u-verse tv for $25 a month with free hd for six months. at&t. >>justine: >>darya: we are still on the scene in the menlo park of this hazmat situation. this is edison way and 11th. the tape is still up but the crews are all gone. there were hazmat cruise with suits on, they seem to be investigating some kind of smell coming from the truck we never saw them do any cleaning of anything or any kind of response other than investigating it.

our bill will help borrowers with fannie mae and freddie mac who are trapped because of the barriers to refinancing. most estimates it is likely to help 3 million borrowers to refinance but that depends how many take advantage. our bill will make it easier for homeowners to refinance and lower mortgage payments, which is a popular and common sense way to help the housing market. discussion about what already happened in fha's harp expansion called harp 2, not all of the barriers to refinancing were addressed there. for example harp 2 removed loan to value caps for underwater homeowners but doesn't apply to borrowers under 80% ratio who theoretically should refinance. my office heard from new jersey homeowners who are exactly in this situation. fha scaled back lender liability for representations and warranties which lenders cite as an obstacle to encourage them for same as far assers and refinancers in harp 2. they did not scale back representations in warranties, cases where a different servicers was refinancing the loan which has led to a lack of competition among lenders that has

fannie mae just did a couple of months ago, you know, and that's real money for the taxpayer. >> it isney for the taxpayer. >> sorry. >> jamie dimon lost jamie dimon's money. >> bertha coombs, what have you got coming up? >> relation nal hedge fund is going to disclose the state this afternoon. when they follow the f-13 funds and one of the things that the firm is telling sources and telling "the wall street journal" is that they believe the north american beverage unit should be split off. back to you. >> okay. thank you very much. look at that spike. we're going to take a break. we apologize. we were going to talk about the walking and texting fines but we'll get to that. see you. see you. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. an airline has planes... and people. and the planes can seem the sam

road blocks which is what we talk about in our study one of the big things is that right now the fannie mae and freddie mac. they have a big price competitive. they can out price anybody in the private sector towards buying mortgages so you don't have any private sector people coming in and competing with them and another big problem is that you have rating agencies that nobody trusts so private sector doesn't have any good way of measuring the risk in these mortgages so they're not going to want to get in the game really quickly do you have any response to that conclusion or i mean one irony of this is that nobody's buying homes so you know one way to shrink the amount of mortgages that are on the government's payroll is for no one to take out mortgages anymore and it's interesting that you know we built so many single family homes in the run up to the great recession and right now we didn't we didn't build enough multifamily homes enough condos and that's where people really want to go right now because the young people who would be first time homeowners right now aren't buying houses bec

were government backed that means that at will and that combined with the bailout so we had for fannie mae and freddie mac. taxpayers are on the hook for five point eight trillion dollars and rising trillion five point eight trillion of mortgage debt that does not and that's before we even get into you know the larger budget concerns in the debt we're talking that needs to be rolled back and if you ask the white house they say yes we the government shouldn't be backing ninety percent of the mortgage market the house republicans of course are going to say the same thing the problem is as it stands right now there's no private so. money flowing to housing because a whole series of books which is what we talk about in our study one of the big things is that right now fannie mae and freddie mac. they have a big price competitive. they can out price anybody in the private sector towards buying mortgages so you don't have any private sector people coming in and competing with them and another big problem is that you have rating agencies that nobody trusts so private sector doesn't have any good

fannie mae is saying that they don't need more help.s it time to let them stand on their own two feet? >> and three top strategists gear you up for tonight. stay with us. how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. and i thought "i can't do this, it's just too hard." then there was a moment. when i decided to find a way to keep going. go for olympic gold and go to college too. [ male announcer ] every day we help students earn their bachelor's or master's degree for tomorrow's careers. this is your moment. let nothing stand in your way. devry university, proud to support the education of our u.s. olympic team. [ man announcing ]ity, what we created here.e education w

. >> freddie mac and fannie mae are a tarnished brands. they cost taxpayers billions of dollars. they're a broken system and a damaged system. there is a key to seeing that we have robust capital flowing into the housing market. what this bill does is put freddie and fannie in a receivership, create a new entity called the mortgage finance agency, and have a 10 year plan for them to go out of business of the taxpayers are no longer on the hook for those mortgages. >> eventually transferring mortgages to the private sector. it also creates a self funding catastrophic fund to prevent taxpayer bailout. talk about that. >> first of all, the program in great britain known as the catastrophic business insurance were there is a surcharge that goes into a sinking fund to back up catastrophic insurance, we use the same thing in the mortgage finance agencies were buying -- whereby any surplus goes into a catastrophic sinking fund to go -- to be the first, against a government guarantee. host: senator, you worked with senator boxer of california on the helping responsible homeowners act to

those owned by fannie mae and freddie mac will not qualify. >>> some twitter accounts may have been hacked. most of them are spam handled. there was a emergency posted online saying 55,000 accounts were come promeased. it also post lad link to a pasting site where it said the use are names and passwords for the account. twitter is looking into the situation and pushed out password resets to some of the accounts that were affected. >>> a bus runs over a man in texas and it's caught on tape. we'll see how he's doing and what happened to the driver. >>> plus, one, two, three -- fall. they and up in a chilly lake. we'll show you how they got soaked and how it kept them from ruining their special night. >> wow, right, kelly. that would be amazing. back here, we're tracking some rain. that's right, more rain that we need headed our way tonight. when does this head out. we'll talk about that straight ahead. >>> some disturbing video out of austin can texas. the surveillance video was rolling. he was not seriously hurt. the bus company says the driver is on administrative leave and faces disciplin

barack obama with a guy with a swiss island accounts, o owns shares of goldman shs, a stockholder in fannie mae and freddie mac, who thinks the rest of us are too stud to put together the ts and understand what this is ababt." this will be in negative campaign and a lot of it is from the republicans. the unemployment figure is bad for the administration. we have the smallest percentage of americans eitherr looking -- the working orooking for work in 31 years. it is disappointing and the discouraging news. >> it has got to be a winner in terms of his argument. >> glad to know that mark always comes prepared. great quotation. the numbers are terrible, and mark is exactly right. the only reason it down to 8.1 is so mamany people of the workforce. it is a perverse way tmeasure things. if you look at the number o of new employment, it is but that could add that rate, unemployment will risese, if you count the people who drop out. u need a quarter of a llion just to be standing still. the recent it is in a threat to obama is one of the reasons he has recovered in the polls is there was a sense in jan

barack obama with a guy who has a swiss island accounts, shares of goldman sachs, a stockholder of fannie mae and freddie mac, who thinks the rest of us are too stupid to put together the dots to understand what this is about." this is going to be a negative campaign and a lot of it is coming from republicans. the unemployment figure is bad for the administration not smallest percentage of americans eager working or looking for work in 31 years. discipline and the discouraging news. >> it has got to be a winner in terms of his arguments. >> glad to know that mark always comes prepared. great quotation. the numbers are terrible. the only reason it went down to 8.1 is because so many people left the work force. perverse way to measure things. if you look at the new appointments, it is pathetic. at that rate, unemployment will rise because of people dropping out. you need a quarter of a million for it to a standstill. one of the reasons obama had recovered in the polls is there was a sense in january and february and march that we were in a new sustainable recovery, but it might have been a fals

ago, "we will not beat barack obama with a guy with swiss island accounts and is a ockholder in fannie mae and freddie mac while he tries to think that the rest of us are too stupid to put together the dots to understand what this is about." this will be a negative campaign, and a lot of it is coming from republicans. the unemployment figure is bad for the administration. at the smallest percentage of americans either working or looking for work in 31 years. this is disappointing and discouraging news. >> how does -- better be a winner in terms of his argument. >> glad to know that mark always comes prepared great quotation. the numbers are terrible, and mark is exactly right. the only reason it went down to 8.1 is because so many people left the work force. a perverse way to measure things. the numbers of new employment, 115,000, it is but that it. you need about -- t.s. but tha it could ne about a qrterf a million to stand still. the reason i.t. is a threat to obama is one of the reasons is recovered in the polls is because in january, february, march, we were in a sustainable recovery,

mortgage giant fannie mae has posted its first profit since the government took it over, in 2008. the company reported todayhat it earned $2.7 billion during the first three months of this year. it said it will not need additional federal aid. fannie mae already has received $116 billion from the treasury, making it the costliest bailout of a single company. the nation's rural post offices won a reprieve today. the u.s. postal service abandoned a plan to shutter 3,700 sites, after running into strong community opposition. under the new plan, no locations will close. but, more than 13,000 rural mail facilities may have to cut back hours of operation. postmaster general patrick donahoe spoke in washington: >> a balance here between costs and services is an important issue, and we think we ended up with a win-win here for our rural communities. plus, at the same time, we're able to take the necessary costs out of the postal service. we've listened to our customers. we've listened to the communities that we serve. we're going to keep listening. >> holman: the postal service has said i

the uncertainty created by the nearly four-year conservatorship of fannie mae and freddie mac is just one such challenge. the resulting lack of clarity in the secondary market is a major impediment i believe to private capital returning to our housing finance. without that capital, think it will be difficult to have a sustainable recovery in our housing market. the statutes and rules created by dodd-frank are also proving problematic. the potential consequences of rules pertaining to qualified mortgages or q. m. and qualified residential mortgages or q. r. m. have drawn concerns from industry participants and consumer groups alike. fha has also been woefully neglected. four years fha has severely misjudged the risk to which the taxpayer has been exposed, making a taxpayer bailout a real possibility. despite these past mistakes we can take steps to help the market move forward if we honestly assess our current situation. i think today's hearing is a first good step mr. chairman in that direction. thank you. >> thank you senator shelby. are there any other members who wish to make a bri

what developed quite a while ago, beforeç security, mortgag- backed securities, fannie mae, freddie is a peer the antiquated system that has not kept up with the changes in the industry. i think what this report shows is that the system is completely broken, for us, as county recorder, the mortgage industry, the system is broken for consumers. we have plenty of laws on the books but they are clearly not being followed. equitas reviewed this together with us. each of those records show at least one clear violation of the law. çanother percentage applied to suspicious activities. that is like backdating documents. not a violation of law, but odd when you submit documents that are backdated two yearsok prior, submitted on behalf of the agencies that no longer exist. almost every single document we reviewed of the 2405 foreclosuresç between january 2009 and november 2012 showed that. a sample of 382 documents between -- of that total -- 2405 foreclosure sales. the main challenge we face is we want to ensure, asñr reporters, that we have a clear and transparent title process. i think w

cayman island accounts and owns shares of goldman sachs who closes on florida and a stokeholder in fannie mae and freddie mac while he thinks that the rest of us are too stupid to put the dots together to understand what this is all about. >> so now, the obama team, maybe they are not as sharp as your team, buzz th -- but they will everything that i have said. >> here is the problem they have got, and i am surprised they used this, because it didn't work. >> well, you didn't have the resources. and if you could havech maed him dollar for dollar, you would have won this election and you know that. >> well, that issue didn't work. >> in the republican party, it didn't work. >> no, not in general. >> yeah? >> watch what is happening right now. there is a reason that you the governor of massachusetts and a senator from california and -- >> they like the equity of the boys give them and they hang out with those guy guys, because th want their support. cory booker,m cop on, leval patrick, come on. >> you are saying the only honest ethical guys are barack obama who is the number one choice -- >> no,

right now the residential mortgage market is dependent on two defacto government institutions, fannie mae and freddie mac. how do we wean away from that? it's going to take years. let's not make the same mistake of having the quasi government institutions half public, half private. they're private when they're making money, and public when they're in trouble. that's a recipe for not very disciplined, effective mortgages. that's a big issue. >> thank you very much. >> thank you mr. volcker, the group of agencies working on the volcker regulations the 30 pages have indicated they might not be prepared to implement then in july. the two-year time period after the passage of dodd frank. should they hold their deadlines solid and get those rules inch ymted in july? -- implemented in july. >> i'm not clear what their attitude is. i've seen a couple of statements that confused me a little bit. my basic understanding is they're aiming to get the rule out by jewel, whatever the date is. they recognize it will take some time to adapt. they recognize over a two-year period there may be some thinging

fannie mae reported the biggest profit since the mortgage giant was bailed out in 2008. ose reflect a drop in bad loans on fannie's book and they've paid back to the treasury. they won't need any more taxpayer money. it's drawn $117 billion in aid since 2008. >>> and the u.s. postal service is backing off a plan to close thousands of smaller post offices this year. instead proposed to keep them open, but with shorter hours. another option would be to close a post office in one area but keep another one nearby open full-time or communities could set one up in a local library, store, or walmart. that project a loss of $14 billion this year. back over to you. >> thank you very much. we'll check with you later on in the show. >>> there's good news and bad news in america's battle with weight gain. according to a government report, more people will be obese in the coming years. right now, 36% of americans are considered obese. that figure is expected to grow by 42% by 2030. the good news is that the rate of people becoming obese has slowed from the record pace it's been settin

. >> rose: freddie mac and fannie mae. >> fha you would never have seen it. we created that, that is the one thing in the dodd frank we didn't fix. again, is it the role of government to try to direct the economy or will adam smith's invisible hand actually, do markets work? they are not perfect, but they are better than any other system that we have ever seen in terms of elevating the most number of people. >> rose: but your argument for creating growth today, for creating growth today, is to cut taxes and cut spending. right? >> that is how you create growth? now that is exactly the opposite from what, in fact, paul cruising man is saying, he said last night you have to have growth and you can't do it by an austerity program an he looks what happened in europe and it says it proved my case you have a live experiment right now. >> the opposite proves my case. >> they did the opposite, they did the austerity and the economy -- >> you are using one word austerity to imply they didn't cut taxes they didn't cut taxes they raised tacks they cut spending and raise

dealing with fha, dealing with gses, fannie mae and freddie mac, there have been a lot of proposals by the administration to deal with that. write-downs. the basic property laws, you've got a first lien which is the first priority. you've got a second lien, right? which is the second. if you -- if the value of the first lien goes down, or you pay it down or negotiate it down or whatever, then the value -- it would logically follow the value of the second lien would go up. is that correct? generally. generally speaking. >> generally speaking, yes. >> assuming the property values were there. if you had a $250,000 mortgage on a piece of property, first lien, and fannie and freddie or fha, whoever, government-sponsored enterprise, government-run, had a first mortgage, and you ladhad a $50, second mortgage, and if you, by negotiations or something, lowered the $250,000 lien to, say, $180,000, just throw that out, wouldn't it follow that the value -- assuming the property was worth so-and-so -- the value of the second lien would be enhanced, perhaps? >> if there's no requirement that you wri