purchasers in the 800,000 and under brackety they require to get more favorable financing go through the fha. >> when news hit that the government's credit rating was downgraded be standard & poors he got plenty of call from people in the market to buy. >> strongly urge buyers not sit around because if you're locked into an interest rate, you're locked in, which means they cannot raise you even if they rates the interest rates for everyone else. >> reporter: another worry a potential buyer has to consider but they're trying to keep things in perspective. >> doesn't keep me up at night knowing -- as long as it doesn't go back to the 1980s rate, we're all right. >> reporter: right now, interest rates are exactly the same as they were when news hit yesterday of this credit downgrade to the government reside credit rating, and so experts i talk to today said may take a few weeks and even a few months to see if this affects any of the interest rates. reporting live, abc-7 news. >> alan: top officials from standard & poors are defending their decision to downgrade the country's credit rating after

many loans have been fha loans. it is one of the only ways that some buyers are able to get into the market. that touches on another point. this is in regard to the new dodd-frank legislation and one of the proposals for qualified mortgages. one of the proposals from the regulators is there would be a 20% down payment. at a time when the housing market is fragile, we see a 20% down payment as something that would take a big bite out of the housing market. think about how long it would take a homeowner to save up 20% of the home to bite in their community would be 14 or 15 years. host: we will go next to lynn in north carolina. caller: my concern is getting the middle class and back to where they are buying and purchasing. i think they have been underwater for a while. i do watch this program quite frequently. i am concerned as an accountant that schedule a should not be used for these types of mortgages. i think reductions should go straight to the 1040 in the area of the child-care credit bank and all interest echo

the 800,000 and under bracket, where they require to get more favorable financing going through the fha. >> for these this couple, they may speed up their schedule to buy a home incase the downgrade affects interest rates. >> in this economy, people are already not qualifying to buy houses, and to have this happen is just making it worse in a sense. >> reporter: and again, experts i talk to say they're not quite sure if or enwhen this will actually effect any interest rates, and the reason why, as you mentioned earlier, is because this has just never happen. the federal government has never had its credit rating downgraded. and so the experts i've talked to are simply making their best guess at this point. abc-7 news. >> alan: a standoff ended this afternoon when an armed parolee surrendered to police in san francisco's mission district. the man ran into a home on fullsome street after he assaulted his sister around noon. she is expected to be okay. the s.w.a.t. team moved in to capture the pa rollee but he snuck into a nearby home, evading police. >> we had people watching the police,

many loans have been fha loans.t is one of the only ways that some buyers are able to get into the market. that touches on another point. this is in regard to the new dodd-frank legislation and one of the proposals for qualified mortgages. one of the proposals from the regulators is there would be a 20% down payment. at a time when the housing market is fragile, we see a 20% down payment as something that would take a big bite out of the housing market. think about how long it would take a homeowner to save up 20% of the home to bite in their community would be 14 or 15 years. host: we will go next to lynn in north carolina. caller: my concern is getting the middle class and back to where they are buying and purchasing. i think they have been underwater for a while. i do watch this program quite frequently. i am concerned as an accountant that schedule a should not be used for these types of mortgages. i think reductions should go straight to the 1040 in the area of the child-care credit bank and all interest echoes

in the 800 sundown under bracket, where they require to get more favorable financing go through the fhahen news hit friday that the government's credit rating was downgraded by standard & poors, he got plenty of calls from people in the market to buy. >> i urge buyers not to sit round because if you're locked into an interest rate, you're locked in, which means they cannot raise you even if they raise the interest rates for everyone else. >> it's another worry a potential buyer has to consider, but this couple is trying to keep things in perspective. >> keep me up at night knowing that we have an interest rate -- as long as it doesn't go back to the 1980s rate, we're all right. >> experts are not sure how long this will affect interest rates. if it even does, and this has never happened before. the government never had a downgrate in their crit rating - credit rating so the experts are making their best gais. >> alan: a nine-year-old baseball fan is still in critical condition after being plowed into by a suspected hit-and-run driver in san francisco. ryan white's family came to san fra

this is an effort to take properties that fannie mae, freddie mac and the fha have repossessed. instead of dumping them on the market, which would lower housing values and make construction markets weaker, turning them into rental properties. they have a number of different mechanisms for doing it. there is no magic bullet here. i don't think this is a magic bullet, but i think it will be helpful. >> susie: how would it help the economy? >> well, anything that can stabilize housing values, house prices, and help to support an increase in housing construction is a big plus for the economy. as we just heard, the housing downdraft, the collapse in the housing market has been arguably the most significant weight on the economy. so as that lift, that will be a nice support to economic activity. >> susie: one thing you've been talking about in many of your reports is getting policy-makers to make it easier for mortgage refinancings and also delaying a reduction of the so-called conforming loan limits. tell us about these two ideas and why they wow help. >> right. i think one of the th

said that they want to take 100,000 foreclosed homes that are owned by fannie mae, freddie mac and fha possibly several hundred thousand more in the pipeline in delinquency and they are looking for ideas on how to turn those into rentals. they would partner with private investors to manage those homes and rent them out and the idea is it would help stabilize neighborhoods. it doesn't do anybody any good to have a home be vacant and multiple foreclosures. people vandalize them, squat in them. we still have the name number of people who lost a home to foreclosure still need a place to live. >> are we seeing a permanent sourg on homeownership which was the hallmark of the american dream. is this a permanent attitude? >> americans slide around with their issues. there has been a significant change at the peak of the real estate bubble in about 2004, a 69% homeownership rate in this country which i think is the highest ever. now it's down to 66%. that's a pretty significant drop. 3% of the population. and i do think maybe, you know, younger people, gen-x, gen-y, millennials don't have the s

this is in addition to the oversight already in place by the states, fha, va, fannie mae, and freddy mac. they are taxed with 150 lending rules over the course of the next 18 months. it will be difficult for small mortgage lending business to keep up with so many new rules in such a short time frame. it is essential to develop an orderly process for the rule making initiatives not only to ensure meaningful input from industry, small business, and other stake holders, but do develop clear rules that are not in conflict with those of the states or other agencies. the cfpb must have a process for providing timely, reliable guidance to the industry and prior to implementation of new rules. we believe this is a historic opportunity to set the tone for the future regulation of the mortgage industry in finalizing the ability to repay and defining mortgages as a safe harbor characterized by traditional, well under written, and properly documented loans. by pursuing a course, they can preserve the best practices and products of the industry, yet still curve the abuses of the early 2000s. if t

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the fha can play a large part in this. we can lower them further on a gradual basis. it would enable the private market to open up. you could limit the amount of borrowing that banks can do from the system. he could encourage bonn the legislation to open up and be in other funding vehicle. i think there is a portfolio of approaches. they will attack the u.s. housing system and be the solution for mortgage finance. there are several things we can do it in the next few months without legislation. they are a few things that we should work towards and we can rise to the top quickly. >> thanks very much. this has been very helpful to the subcommittee. as the senator suggested. do not be surprised if you're called again to give reviews and advice. this has been extraordinarily helpful. some of my colleagues may have additional questions. we ask that those questions be submitted before the end of the week. it is wednesday. by friday, i think that is fair. we will get them to you and return them as promptly as possible. again, thank you very much. the hearing is adjourned. [c

seeking ideas from investors on how to rent 300,000 homes owned by the fannie mae and freddie mac and fha. the goal is to shrink the pool of properties for sale. they own or guaranteed about half the nation's mortgages. >> opportunities is knocking for nasa this morning. the mars remove ver is sending back new pictures of the surface. they or the edge of the 14 mile wide endeavour crater that looks like a lot like mojave desert, don't you think? they took three years to cover 13 miles to the endeavour crater. they say it's the best shot to determine whether there is any water on mars. if you outlook at those pictures you could never imagined we would see images from master. >> but i was looking for a gecko. that is right on the coast here. >> it's all in a conspiracy, it's all in the mohaje. >> i shouldn't have got him going. >> it's very fascinating. >> and following the tweets. >> they are developing. thick clouds. check out the clouds and brought the flight delays into sfo, 53 minutes. check out flight tracker at abc7news.com and follow kristen and i and eric on twitter. have you tweet

purchasers in the $800,000 under bracket where they require to get more favorable financing through the fha. >> when news hit friday that the government's credit rating was downgraded, they got plenty of calls from people in the market to buy. >> i would strongly not to sit around because if you are locked into an interest rate, you are locked in. that means they can't raise you even if they raise it for everyone else. >> it's another worry that potential buyer has to consider but they say they are trying to keep things in perspective. >> it keeps me up at night but it doesn't go back to the 1980s, think we are all right. >> they are not sure how long this will affect interest rates if it does and reason why, this is something that has never happened before. the government has never had a downgrade in their credit rating. so the experts are making a bet, yes. >>> a back fan is in critical condition after being plowed into by a suspected hit-and-run driver in san francisco. he came from philadelphia to watch the giants' series. police credit witnesses to help them capture the driver that str

properties, seeking ideas from investors how to rent 300,000 homes own bid fannie mae, freddie mac and fhaal is to shrink the pool and help boost home prices. fannie mae and freddie mac own or guarantee half of the nation horts -- mortgage autos there is a three alarm fire that began just after 1:00 at river city waste recyclers. officials say it looks like it spread to construction waste materials. crews expected to be on the scene several more hours. >> and the so called doherty gang has been broken up. police found two brothers and a sister who had been on a cross-country crime spree. >> and video thatzv is igniting outrage in the united kingdom. days of violent demonstrations subside. >> and taking a look now at the golden gate bridge, traffic flowing nicely in both directions and just a little bit of clouds there. let's check in with spencer now. >> and traffic is flowing nicely in the air across the country. no reports of delays in major airports with two exceptions, newark airport is experiencing about 40 minute delays because of high winds and some disturbed weather there. boston r

i worked on mortgage issues and fannie and freddie and the fha. my january report was called "what the fair credit reporting act should teach us about mortgage servicing ," and it makes a simple point. in 1970, it exists today for mortgage servicers. the single most important fact is that the consumers, the homeowners, are not the clients. the climates to the credit reporting agencies are the companies who pay for the credit reports, the lenders and reporters. they pay the services, and those are the investors in mortgages. mortgage servicers owe their legal duties to the investors, not the homeowners. now in saying this, i'm talking about when rights are sold, and appears not to be the model that's followed where they keep the services in house close to the market, but the large majority of mortgage servicing rights today are sold out into the market to new buyers and servicing, often the biggest banks. the structure of the market that we have today leads to problems. consumers have no market or legal checks on the servicer. the homeowner doesn't

mortgages over the last year that have been initiated are either guaranteed by fannie and freddie or fhahe government presence in housing is enormous right now. >> yeah, when you're talking about things being guaranteed, you are talking about our money is backing up. great. >> exactly. trillions of dollars of mortgages that are being guaranteed by taxpayer dollars and, you know, if the housing market continues to slide, that means more americans are underwater. more foreclosures and unfortunately steve, what that means is your and i -- my money is very much at risk. >> steve, we're putting up a graphic right there. the amount, the numbers of bad loans so far, the first one had fannie mae, $200 billion. this one showing freddie mac, $79 billion. but you point out, steve, 90% of the loans at least touched fannie and freddie in some way. give us a number. $5 trillion, $6 trillion, $7 trillion in loans if things would potentially go south. a lot of money on the hook. >> you're exactly right. what's frightening about this is these numbers that you just talked about. that $6, $7 trillion of ex

we have, in fha and fannie may and freddie mac, we have 300,000 foreclosured homes that belong to those agencies, sitting there waiting for someone to buy them. it's not going to happen in this market. fix them up, spend money fixing them up, it will put a lot of construction workers to work and rent them to families and use the rental income to offset the cost of the money to fix them up. you know that part of the most successful part of the stimulus was cash for clunkers, but there was also a great rebate for buying energy efficiency environments and weatherizing your homes, that was sold out. put it back into place right now, october 1, it will create a lot of new activity and jobs and do good for the country, so there are a lot of good ideas out there, and if he spells it out and shows the price tag, people are going to look up and say you mean we could create those decent jobs for "x"? let's do it. the republicans then would have a choice, rachel, do it and get the country moving again or explain why not. and i think jobs, explaining why for a jobs bill is going to be hard than deb

in the $800,000-and-under bracket where we require to get more favorable financing going through the fha. >> when the news hit friday that the government credit rating was downgraded, he got plenty of calls from people in the business to buy. >> i would strongly urge buyers not to sit around because if you are locked into a interest rate you are locked in. which means they can't raise you even if they do raise the interest rate for everyone else. >> it's another worry a potential buyer has to consider. but they are trying to keep things in perspective. >> keep me up at night that we have an interest rate that as long as it doesn't go back to the 1980s rates works i think we are all right. >> they aren't sure how long it will affect interest rates and even if it discuss because it has simply never happened before. the government has never had a downgrade in their credit rating so the experts are simply making their best guest. in san francisco, abc7 news. >> one teenager is hospitalized and another questioned by police after a shooting in san francisco. it happened shortly after 10:00 las

we stimulated the living daylights out of housing -- tax laws, fannie and freddie, fha, and so on. we need to deal with some of those things. we had a flawed regulatory system. it wasn't a matter of not enough regulation. we needed better regulation, but we have a system that was just plain broiled. -- brokaw, just plain broken. somebody put it in place just after the great depression so we had an emergency powers to deal with banks but not with non-banks. we need to learn our lesson and a lesson to take away is not that capital markets are not worth while and don't provide social benefit. the lesson we need to take away from all of this is what mistakes were made so we can correct them. it that is one of the things we do in the united states of america. when there is a problem, we shine and light on it and we move quickly to correct it. we need to do that. in terms of his first question on the tarp. this is something i heard a lot. let me be really clear on what we were doing. the purpose of the tarp bank capital program in october when we announced the program, and on a single da

without freddie, fannie, and fha, there would have been no mortgages. they are now 90% of the market. this isn't a good thing. the question is how do we restart the private market? one possible move suggested that would be a good indication of what appetize for mortgages exist out there would be to lower the conforming loan limit that caps of size that fannie and freddie can buy. they are as high as $727,000. it's set to go to $625,000 this fall, and we'll see what happens at that time. because every mortgage above that side will have to be financed in the private sector. a final question is what support, if any, should housing entities provide for so-called affordable mortgages. there's a theory that it was the drive and the push for affordable mortgages that encourages freddie and fannie in particular to issue mortgages to people who are otherwise unqualified. some years ago, lending institutions were foragedden from red lining urban areas for mortgages and excluding them from financial activity. clinton administration, while i was there, decided that

without freddie, fannie, and fha, there would have been no mortgages. they are now 90% of the market. this isn't a good thing. the question is how do we rstart the private market? one possible move suggested that would be a good indication of what appetize for mortgages exist out there would be to lower the conforming loan limit that caps of size that fannie and freddie can buy. they are as high as $727,000. it's s to go to $625,000 this fall, and we'll see what happens at that time. because every mortgage abovehat side will have to be financed in the private sector. a final question is what support, if any, should housing entities provide for so-called affordable mortgages. there's a theory that it was the drive and the push for affordable mortgages that encourages freddie and fannie in particular to issue mortgages to people who are otherwise unqualified. some years ago, lending institutions were foragedden from red lining urban areas for mortgages and excluding them from financial activity. clinton administration, while i was there, decided that sinc

if you have less than that, he says look into an fha loan or check your eligibility with the government'sordable refinance program known as h.a.r.p. there are calculators you can use, at cnnmoney.com and bankrate.com, figure out if it pays to refinance. if you do this, you want to identify your goals. if you're if your 30s, starting a family, you may get more money into your family and savings. if you're close to retirement, mcbride says consider refinancing into a shorter term loan so you have more money for the golden years and you're not still paying off the mortgage after you've stopped working. >> so we have more to talk about this refi, alison, thanks so much. we'll take a quick break right now. then we'll be back with alison. she'll tell us how to avoid ruining your chance of getting the best mortgage refinance. [ male announcer ] this is the network. a network of possibilities. excuse me? my grandfather was born in this village. [ automated voice speaks foreign language ] [ male announcer ] in here, everyone speaks the same language. ♪ in here, forklifts drive themselves. no, he d

and another thing that we could do quickly is fha, fannie mae and freddie mac own 300,000 homes that are in foreclosure. most of them need work. the federal government is trying to sell as homes with no market. what they ought to do is hire workers through the private sector to get rid of those homes quickly. put them out to rental. you can use those revenues to help us save it is significant amount of the cost fixing them up. we could put those workers to work in two months. there are a lot of things we can do. the transportation financing program -- there is 300 there is $3 billion that has been allocated that has not been awarded yet. let's get those sings out. that is 75,000 new, good paying jobs. let's get those things out tomorrow. there is a lot that the president can do. i hope the republicans and conservative democrats act responsibly for the country's well-being. host: who is the biggest republican threat in the presidential race to president obama? guest: i think governor mitt romney. that is a ticket that would appeal to many voters. theink they've are strongest candidate

fannie, freddie, and fha are now 90% of the market. isn't a good thing. the question is how do we restart the private market? one possible move suggested that would be a good indication of what appetite for mortgages exist out there would be to lower what's called the conforming loan limit that caps the size of mortgages that freddie and fannie can buy, yet in the areas is as high as $727,000. it is set to go to $625,000 this fall, and we'll see what happens at that time. because every mortgage above that size will then have to be financed in the private sector. a final question is what support, if any, should housing entities provide for so-called affordable mortgages? there's a theory extent that it was the drive and the push for affordable mortgages that encouraged freddie and fannie in particular to issue mortgages to people who otherwise were unqualified. some years ago, under the community reinvestment act, lending institutions were forbidden from redlining urban areas from mortgages and excluding them from financial activity. a clinton administrati

bill and jimmy may programs and fha programs, the goal was to have the government recognize that theresome value in inventing homeownership, but in doing so directly to us greater control and less likelihood for seepage of profiting. and fannie and 794 at the front end of co-mingling the social policy with financial america policy. and that really is a departure point i think is very important because in 2001, i wrote a paper called houston in the new millennium, a home without equity is a rental with it. and in that paper, there was no -- there really was no private label mortgage-backed securities market. i had been part of the creation of what we call the subprime 1.0 in the 90s, where we thought a lurch number of small sub prime originators come. really what they were doing was making loans that were still relatively traditional mortgage products 15 year, 30 year fixed meat products, traditional and products, to borrowers have blemished histories. in that industry therefore had a very small market that it could tap into. ultimately it went away because prepayment rates accelerating

mortgage market is controlled through the investor guidelines through fannie mae, freddie mac, and fha lenders participate and those guidelines govern the service. there are choices to user community bank versus online or 800 numbers. they have the right to buy or sell those loans today. some do. >> that is a good point. i believe a lot of the things we do around here -- we look at some of the regulatory practices that were put in place by dodd- frank. there is a concern that that provides consolidation over a period of time if we put in place uniform standards by law, will there be consolidation? >> i believe you can have standards and have a. protections in place for smaller servicers or banks that have too much burden with that. you can have standards to protect customers. >> how does that happened exactly? some committee bankers note that the market is going to migrate away from them if they charge higher fees than larger institutions. how would that actually work? if the one else want to chime in, that would be helpful. >> one of the basic distinctions whether the bank retains the

and another thing that we could do quickly is fha, fannie mae and freddie mac own 300,000 homes that are in foreclosure. most of them need work. the federal government is trying to sell as homes with no market. what they ought to do is hire workers through the private sector to get rid of those homes quickly. put them out to rental. you can use those revenues to help us save it is signifint amount of the cost fixing them up. we could put those workers to work in two months. there are a lot of things we can do. the transportation financing program -- there is 300 there is $3 billion that has been allocated that has not been awarded yet. let's get those sings out. that is 75,000 new, good paying jobs. let's get those things out tomorrow. there is a lot that the president can do. i hope the republins and conservative democrats act responsibly for the country's well-being. host: who is the biggest republican threat in the presidential race to president obama? guest: i think governor mitt romney. that is a ticket that would appeal to many voters. theink they've are strongest candidate bec

seems to me that's really difficult given the overwhelming market share that fannie, freddie and the fha have and for any of you, mr. valkenburg, in particularly, what are some of the interim steps that can be taken to transfer some of that credit risk? to move it away from fannie or freddie. mr. davidson, do you want to -- >> yeah, i'd be happy to suggest -- so i think right now even within the existing gse structure, there's no reason why the gse's can't work to start setup these types of markets. there's no reason that why they can't be using more external private capital in the form of insurance either pool insurance or mortgage insurance. there's no reason they can't set up a credit default swap market or the solution i said which they should set up a subordinate bond market where they sell off some of this credit risk. so as a transition we can start building private capital markets even within the current gse structure. >> thank you. mr. hamilton, you wanted to comment? >> i would just point out that some of this technology already exists at the u.s. agencies, freddie mac for thei

and ginny mae and fha.he goal was to have the government recognize that there's some value in insent ihome ownership, but in doing so directly, there's greater control and less likelihood for seepage of profit-taking behavior. and fannie and freddie really were at the front end of comingling the social policy with financial market policy. and that really is the departure point that i think is very important. because in 2001 i wrote a paper called housing in the new millennium, a home without equity is just a rental with debt. in that paper, there was no -- there really was no private label mortgage-backed securities market. i had been part of the creation of what we call subprime 1.0 in the 90s where we saw a large number of small subprime originators come. and really what they were doing, they were making loans that were still relatively traditional mortgage products. 15 year, 30 year fixed rate, traditional arm products to borrowers with blemished credit histories and that industry, therefore, had a small

. >> if i might, the fha, the low funded agencies are in that property now. >> so we are working with them to take i believe it is 350,000 square feet and we are working through the typical process to find a tenant and make sure the rent is appropriate. >> listened, thank you mr. chairman for holding this. it's another area every time you hold the hearing i learn more and more where we are wasting money and i'm hopeful that the president and both houses listening to what we are doing because we are giving a great things to go and fix. the executive order number one, fixed at. estimate as i sit here before the gao leaves us a2 do list and it's not as high risk for the committee or the senate or the house it is for all of us including the president and federal agencies and certainly of us. i want to follow-up on the senator brown's line of questioning and ask for the space that is now occupied in the constitution center it sounds like they will be occupying one-third as originally thought. is that correct? >> senator, we are on the hook for one-third of the spaight but we have no intent

and another thing that we could do quickly is fha, fannie mae and frede mac own 300,000 homes that are most of them need work. the federal government is trying to sell as homes with no market. what they ought to do is hire workers through the private sector to get rid of those homes quickly. t them out to rental. you can use those revenues to help us save it is significant amount of the cost fixing them up. we could put those workers to work in two months. there are a lot of things we can do. theransportation financing program -- there is 300 there is $3 billion that has been allocated that has not been awarded yet. let's get those sings out. that is 75,000 new, good paying jobs. let's get those things out tomorrow. there is a lot that the president can do. i hope the republicans and conservative democrats act responsibly for the country's well-being. host: who is the biggest republican threat in the presidential race to president obama? guest: i think gernor mitt romney. that is a ticket that would appeal to many voters. theink they've are strongest candidates because they do not scar

we stimulated the living daylights out of housing -- tax laws, fannie and freddie, fha, and so on.ed to deal with some of those things. we had a flawed regulatory system. it wasn't a matter of not enough regulation. we needed better regulation, but we have a system that was just plain broiled. somebody put it in place just after the great depression so we had an emergency powers to deal with banks but not with non- banks. we need to learn our lesson and a lesson to take away is not that capital markets are not worth while and don't provide social benefit. the lesson we need to take away from all of this is what mistakes were made so we can correct them. it that is one of the things we do in the united states of america. when there is a problem, we shine and light on it and we move quickly to correct it. we need to do that. in terms of his first question on the tarp. this is something i heard a lot. let me be really clear on what we were doing. the purpose of the tarp bank capital program in october when we announced the program, and on a single day we put capital in nine big banks

another thing that we could do very, very quickly is the fha and fannie mae and freddie mac own # -- 300,000 homes in foreclosure, and most of them need work. the federal government is trying to sell those homes. there's no market. no one is buying the homes. what they ought to do is hire workers, again, through the private sector to re-add those homes quickly, and put them out for rental. there's a rental market. use the rental revenues to help us defray significant amount of the costs that we spend in fixing them up. we could put those workers to work in two months getting the houses repaired. there's a lot of things we can do. tiffea, for example, the transportation financing program, there's $3 million in this year's current budget that's been allocated. the tf allocations has not been awarded yet. that's 7,000 new well paying jobs. get those things out tomorrow, tomorrow. there's a lot the president can do, and i hope he does it within the frame work of deficit reduction and i hope the republicans and democrats act responsibly for the country's economic well being. >> host: gove

just emulated the bidding de las -- daylights out of our house is their tax laws, a freddie and fannie,fha. we need to deal with some of those things. we had a flawed regulatory system. we needed better regulation, but we had a system that was just plain that broke. somebody put it in place after the great depression. we had emergency systems to deal with banks but not nonbanks. we need to learn our lesson. the lesson to take away is not that capital markets are not worthwhile and cannot provide social benefits. the lesson we need to take away from all of this is what mistakes were made so we can correct them. that is one of the things we do with the united states of america. what there is a problem, we shine a light on that. we move quickly to correct it. we need to do that. as far as his first question on the tarp, this is something i have heard a lot. it let me be really clear what we were doing. the purpose of the tarp bank capital program in october when we announce that program and on a single day, we put capital in nine big banks with over 50% of the deposits. then in the days and w

bill and jimmy may programs and fha programs, the goal was to have the government recognize that theree value in inventing homeownership, but in doing so directly to us greater control and less likelihood for seepage of profiting. and fannie and 794 at the front end of co-mingling the social policy with financial america policy. and that really is a departure point i think is very important because in 2001, i wrote a paper called houston in the new millennium, a home without equity is a rental with it. and in that paper, there was no -- there really was no private label mortgage-backed securities market. i had been part of the creation of what we call the subprime 1.0 in the 90s, where we thought a lurch number of small sub prime originators come. really what they were doing was making loans that were still relatively traditional mortgage products 15 year, 30 year fixed meat products, traditional and products, to borrowers have blemished histories. in that industry therefore had a very small market that it could tap into. ultimately it went away because prepayment rates accelerating af