is there any particular moment in the fannie mae-freddie mac relationship witheter the whitehouse or congress where it truly got out of hand or was this a slow development over 15-20 years? >> i see it as a slow development. i think from fannie mae and freddie mac point of view it was out of hand quickly. if they recognized what they were doing and i think many of them within those organizations must have realized it because up until 1992 they wouldome make prime loans. they were famous for only making prime loans and after the affordable housing requirements were put in place and they had to buy loans from people below the median income 50% or 56% of those loans had to be to people whose credit relationships were not particular good they began to reduce their underwriting standards and realized they were taking huge risks in doing so. by 1995 for example they were accepting mortgages with 3% down payments and by 2000 they were accepting mortgages with no down payment at all. i actually don't blame fannie mae and freddie mac so much mt book as i blame hud. fannie mae and freddie mac

never changes. 30-year fixed-rate mortgages also known as conventional loans, are backed by fannie mae or freddie mac. they're amortized over 30 years, meaning you have 30 years of fixed monthly mortgage payments. this is a popular option because you have peace of mind knowing your loan payment will always stay the same. and with the 30 year fixed, you could pay as little as 5% of the total home cost on your down payment. or refinance up to 95% of your primary home's value. this can be a great option whether you are a first time home buyer or refinancing your existing mortgage. 30-year fixed-rate mortgages are perfect for home buyers who plan to be in their homes for many years because they offer the consistency of an interest rate and payment that never change. they're a great choice if you're looking for a lower monthly payment, and the 30-year fixed-rate option is also available on fha or v.a. loans. does a 30-year fixed-rate mortgage sound right for you? >> quicken loans also offers an adjustable-rate mortgage program with some of the lowest mortgage rates available. these arms are a great option

or something. >>> fannie mae and freddie mac fell by over 80%.her bailout on the horizon. and how the u.s. taxpayers would react to something like that. joining us now is david stevens he is president and ceo of the mortgage bankers association. thanks for being here. >> good to be here. >> so fannie and freddie have been placed in conservatorship and 2013 was a great year for them. they gave billions of dollars back to the u.s. treasury. 2014, not so great. there is an issue where they have to draw on the credit lines of the treasury if they fall below a certain threshold. >> that's right. if you think about the earnings unheard of with any in the world. those at one times were asset recoupments. and recoupments of reserves, legal settlements, those types of things. what we saw in the last drop was what we think will be returning their levels would be. that's certainly not sustainable for two companies that have no capital and are dependent on the lines of credit the treasury department holds. >> we know this was kind of i guess, kicked into pur

or subsidize it. and they do. today 85% of american mortgages are guaranteed with by the government your tax money. there's the fha, the federal housing administration, fannie mae and freddie macthem put taxpayer money at risk by granting mortgages or buying them. and these guarantees invite reckless behavior. the guarantees on top of politicians pressuring banks to loan to underserved needy people led to the inflated housing prices that led to the last economic bubble. >> the housing bubble burst. >> they owed more than a their home was worst. >> this incredible housing bubble that we created. john: it was incredible, a speck la tuf frenzy. otherwise smart investors started saying housing prices can only go up. we can only get rich issuing more mortgages, and the prices did keep going up wildly. until they didn't. the popping of the bubble is pretty bad. lots of people lost lots of money, but at least we learned something from our mistakes. government no longer guarantees loans to people with poor credit telling them, hey, you only have to put 3% down. except actually government's now doing that again. a few months ago fannie and freddie after raising their minimum down payme

or subsidize it. they do. today 85 percent of american mortgages are guaranteed by the government your tax money. the fha, federal housing administration fannie mae freddie mac put tax payer money is the risk by granting mortgages or buying them. these invite reckless behavior guarantees on top of politicians pressuring banks to long under served needy people they led to the last housing bubble. >> they owed more on their mortgage than the home is worth. >> incredible housing bubble they created. >> it was incredible a speculative frenzy. otherwise investors started saying housing prices can only go up the prices went up wildly until they didn't. the popping of the bubble is bad lots of people lost lost of money. we learned something from our mistakes. at the tell them you only have to put 3 percent down. except actually government is now doing that again. a few months ago fanny and freddie after raising their minimum down payment to a measly 5 percent lowered them to 3 percent. are they crazy? a sensible congressman tried to get an answer about that from the administration's mortgage regulator. >> all things being equal is a 3 percent down low riskyer than

anyone 700 or better will get the best interest rate you've ever seen. in this environment, fannie mae and freddie macuying things -- credit score 620 and above. one single item will probably not sink somebody low enough that they'll be shut out altogether, unless they have some other dents in the car also. so if you've got good credit and proof of income, money for a down payment, that one erroneous payment won't shut you out. it may bring your interest rate higher. >> we should mention, lest you think people that don't pay their bills get a free ride, if you wait 180 days, it's fair game for these agencies to put that debt on your credit rating. right? >> yeah. in the case of the medical debt, absolutely. this is not something that will let people skip out on bills they otherwise owe. it gives that 180 day period, if it's a dispute between the provider -- >> which it almost is. you're almost always in dispute with some part of your insurance bill. it just makes sure that that doesn't interfere with your overall credit rating. >> absolutely. the whole idea is accuracy here. as consumers, we have to d

fannie mae and freddie mac. [applause] [inaudible conversations] >> 1st let me say how much i enjoyed the book. some of the issues dealing with finance orse to my own heart. also as well my dissertation work was on regulatory areas during the progressive era. i i found that chapter to be very much of interest. let me make an emphasis. the subtitle of the book really is less about the size of government and the structure of government. if if you read this book and then immediately read marxist historian in the classic conservatism you would be hard-pressed to find differences. i really would suggest despite the big government tail, this really is about that anybody at any.in the political spectrum would enjoy. it is a great introduction to the history. some of my critiques would be that -- and this is going to reflect my bias as an economist. there is a whole literature of economics someone corruption some unconstitutional design. this is a political science history book. despite my own temptations that every single book everywhere. a small slight. to me some of the conversation particularly about some of the bank wars my friend alex pol

or go below. one other thing that i would mention particularly important to wall street, that this legend anticipates that fannie mae and freddie mac are privatized, and that on the too big to fail front this budget anticipates removing the ability for the fdic to bail out and failed financial institution. stephanie: peter cook, thank you. joe: back to the israeli election, voters are choosing between incumbent brian minister benjamin netanyahu, and a coalition led by herzog. our bloomberg middle east editor is in tel aviv. elliott? elliott: thank you very much. we have the polls closing in just under six hours. great to have you with me. you are quite close to benjamin netanyahu. is he on his way out? >> we think he is on the ropes. the optimal -- outcome will be very tight. the segment of the electorate of that is right of center is larger than the electorate that is left of center. so just and broad numbers of the aggregate vote share that is sympathetic to him and his point of view is greater than the opposition. but it is a fragmented white -- right wing. he has been in power for a long time. he is focused on security issues.

if that number's true or not, but let's assume that three out of every four mortgages in this country are fixed rate 30-year mortgages. if you eliminate fannie mae and freddie macinate the 30-year fixed rate mortgage because no one's going to make 'em, and no one's going to hold 'em. if you eliminate the fixed rate mortgage, then the monthly cost of owning a home goes way up, and the price of that home goes way down, and that's not just the homes that are under the 30-year frms, it's every house in the united states. so if they get rid of fannie mae and freddie mac, they're going to drop the value of every house in this country. >> well, dick -- charlie gasparino here, thanks for joining us. let me play a little devil's advocate here. they may not get rid of it, but they may not do what investors and what analysts like yourself want them to do, meaning the government may not do, and that's repatriate the profits to fannie and freddie, repatriate those profits back to the shareholders. you know, in october the shareholders -- who are suing the government -- suffered a pretty big loss. the federal judge basically said that the government is well within its, the l

fannie mae and freddie mac. thank you very much. [applause] [inaudible conversations] [inaudible] first of all let me say how much i really enjoyed the book. obviously some of the issues dealing with finance or close to my own heart having spent my time on the hill trying to work on financial issues. but also my dissertation work was on radio two areas during the progressive era. i found that chapter to be very much adventuress. the subtitle of the book is sort of device at the government and i think it really is the book less about the size of government than about the structure of government. in fact, if you read this book and immediately read marxist historian classic tribal conservatism you'd be hard-pressed to find a difference on the errors. i would suggest a site of a government that title might be off putting some of my friends on the left this is a book at anyone in the political spectrum would enjoy. it's a great introduction to the history. some of my critiques would be again this will reflect my biases as an economist. there's a whole literature in economics, some on corruption, some unconstitutional design. this is a political science history book despite my own temptations that