and that went beyond the fha. banks decided who they were going to lend money to based on fha policy, they responded to that in much the same way. on "the atlantic" website, you'll see, we have actual maps where you can look at a city like chicago and see where the loans were and where the loans weren't. and this was a practice that lasted on paper into 1960, and likely much longer than that. >> so you go on, "until america reckons with the moral debt it has accrued and the practical damage it has done to generations of black americans, it will fail to live up to its own ideals." talk for just another moment about that practical damage. >> the most obvious example is obviously the wealth gap. when you have a family, on average that has 20 times the wealth, a white family has 20 times the wealth of black families and then you can really trace this to actual policy. you see it. again, you know, when we look at these incarceration rates, we see it. i mean, the gap is so, so huge. it's not a mere, minor discrepancy. w

one thing that i found that was really fha underwriting guidelines and what it took. this was exciting stuff. what it took to build a house that would be guaranteed by the federal housing administration which is the entity that basically in the postwar years will underwrite -- if you have fha approval, they will guarantee 80% of the bank loan. so if there is a foreclosure, the federal government will basically ensure that the bank is protected. one of the things, one of the main components in there, is houses that have multiple electric circuits. one for lighting and another for major appliances. the fha, the federal government, is of a way guaranteeing the houses will consume ever higher rates of electricity in order to receive this insurance. so i think that that is one of those ways, like carl was saying. i think the central dilemma of resolving climate change right now is the way that, at least in the united states, the way that the american built environment set in place is so deeply dependent on heavy and extensive uses of electricity. and that finding -- and so

. >> fha and freddie mac? >> they are lowered to 3% and 5% from fannie and freddie loans. there's a bigger problem with them. controlled by the government, the profits go straight to the treasury. they have spent a quarter of a trillion dollars into the u.s. treasury. it's $38 billion more than the bailout. they paid that back plus 38 billion dlarls. you know what? here is the thing. these are revenue sources for congress, for lawmakers. >> i don't like the name, fannie mae and freddie mac. ben stein, what do you think? >> i think if they are doing favors, why not have nothing down mortgages. this is begging for problems. the slightest deviation in a work habit, they are under water, put the house on the market and we have a new crisis. i think the stock market is better for people than a house in any event. the idea is when you have little skin in the game, you don't really have skin in the game. you are not really caring that much about what's at stake because you don't have a lot at stake. >> i agree. i don't think they should be involved in anything less than 20% down

we have fha mortgages doing almost the same. yes, it is. it sounds risky, right, to the lender and for the mortgage insurer who will insure these. it is only a 3% margin. if someone defaults and they have to sell the house they mat. the good side is usually people don't default for a year or two at least. >> he good news is we won't have another crash for a year or two. >> that's a question. home prices -- our latest numbers are going up at 5% a year. if that keeps up, 3% margin will turn to an 8% margin for lenders in one year. >> although we have seen years where home prices may decline by 10%. >> that's what worries me. we are seeing a deceleration. they are going up but at a lower pace. in history that's been the precursor todecline. the fact it is slowing is a concern. this might be more like the 1970s or the '80s boom, not like the really big one that led to the financial crisis. >> we can cross our fingers on. that one of the concerns is that millennials aren't buying houses the way previous generations have. what's happening there?

it's still costly, let's face it, to get an fha mortgage, and so that is holding some people back. but i wang we need do as an industry is get the word out there. we look at first-time homebuyers, on average, first-time homebuyers put down 6%. cheryl: because the banks are requiring them to, no? >> that's great. many first-time homebuyers think they have to save 20% down payment. it's not necessarily the case. we need to get those millennials out of the rental property and buying homes. >> all of the baby boomers are looking to sell their larger homes or family homes to downsize as well. let's talk about that between the millennials and the baby boomers. one of the things you say is important is lifestyle. talk about that on the show that 18 hour is a new trend. do you see that happening as well? >> it's happening around the country. we launched the friendlyist search at better homes and gardens of real estate. people aren't buying a house anymore, they're buying lifestyle, community and convenience, that's a big trend. cheryl: that's the key word, convenience, what kind of things

you will not be able to put 20% down you can't do a fha loan on second house.steps are all the same as buying a first house. give them all the information and w2s and all the information from the brokerage accounts, et cetera, when it gets down to the loan itself things change of the you have to put down a bigger down payment, 20%, or more, who knows. depend on lender. interest rate will not be good as it would be for primary home. tell us why that is. a lot of people don't understand the way lenders come to this business. >> you know i think is a matter of risk. we went from sort of pendulum swung from 2005 if you could fog up a mirror somebody would give you money all the way to where we're at now. this is about risk aversion. lenders worry about how much risk they want to accept. if buyer buys a second properties easy to walk away and make a short sale or foreclosure around the lender gets holding the bag. that is why they want you to have more skin in the game than you would with a principal residence. gerri: is it always better to pay cash? >> different sc

get an fha loan. >> one thing i learned, edward, prices follow job growth.row, prices move up, so if you can get in at this price and have 1,000 new buyers coming in behind you, you'll probably make some money. second listing, a single family home at 3500 woodside road, 699,1, that would be $700,000, annual taxes of about $7,700, five beds and four baths and 2,400 swear feet of living space. that's a nice up. where is this one, ed in. >> in wilton woods in the neighborhood. it has a lot of demand for wilton woods. if you look on a map, it's just barely south of the beltway. it's known for real big lots, old-growth trees, and it's within about a mile as the crow fly to the huntington metro. you can literally live on this third-acre lot with a five-tier deck that climbs up the backyard. the views from the top are amazing. here you are surrounded by trees yet you could literally walk to the huntington metro. >> are these alexandria city schools or fairfax county schools? >> these two are both fairfax county schools which, you know, are always in high demand. >>

you can go with 5% down and fha. some things are more expensive. you can still go 3 1/2% down.ow payment options are out there. liz: are you worried at all about the homebuilder sentiment ticking down? >> it was down one. went from 58 to 57. above 50 is still good. here's the thing, the homebuilders i talk to are feeling pretty optimistic about the future and traffic levels. it is kind of goldilocks. you don't want it so hot that it is unsustainable. this is really good clip. we've been going four or 5% appreciation. people don't realize how powerful that is over time. >> the market was colored red and don't look what happened to the homebuilders, what happened. you piled on to the homebuilder sentiment survey that wasn't greatest number we have seen. home prices have salubrious effect on homebuyers. more money to use it for a down payment or fill a house or renovate a house, correct. >> i actually have a different take on that a lot of people are talking about the positive of low oil price. liz: right. >> we like going to the gas steaks and not taking out home equity loan to g

let's start with fha limits. you may have additional benefits you're missing out on.here. >> that's right. the vast majority of large employers in particular and even smaller employers are offering health plan options that include a health savings account. and my recommendation is that if you haven't already p signed up for it, you should sign up for it or at least consider it and fund it to the max. gerri: so if you're still in open enrollment, you can do this. what are the benefits of this account? even though there's a little bit of sticker shock because you have a premium to pay and a health savings account to fund, the cost of a health plan is about 20% cheaper than an hmo plan. there are multiple tax benefits, and many employers, particularly large employers, fund your account. that money can roll over year after year, and it's yours to each even if you lose your -- even if you lose your job. gerri: you set the money aside tax free, right? you take the money out tax free, and your employer may contribute to it. so there's a lot of free money there if you're havi

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it is something we work very but fha said, occupation -- after a 10 year occupation, they do not wants to stay in iraq. were focused on isil -- but run problem began to out the solution -- out run the solution feared by the conflict in syria. iraq the one can only draw one of two conclusions. one, that he is abysmally ignorant or simply not telling the truth. by the way, here's what ryan crocker said on iraq. quote -- as a former ambassador to iraq 2007-2009, do you think it was a mistake not to push heart for the status of force agreement with iraq before the u.s. pullout?" i would remind my colleagues, ryan crocker, probably the most

working with you and your staff this congress to develop legislation to address housing finance reform, fha reform, improving the terrorism risk insurance program, and other important topics. we've had a productive collaboration over these years, and i wish you the best and thank you for being a great partner. turning back to the task at hand in the hearing, as director watt's primary roles are conservator of fannie mae and freddie mac and regulator of the federal home loan bank system, that's where i want to focus today. these are two separate and distinct tasks that are incredibly complex and important. in his role as conservator, director wot isable ga oge gate conserve the assets of freddie mac and fannie mae. i wish we were sitting here today to hear director watt describe his plan for the implementation of the phase into the next housing finance system. i suspect director watt may wish this were the case as much as anyone else. while we were successful in passing a bipartisan path forward out of this committee, the ultimate goal of enacting legislation is not going to be achieved in t

with everything we've seen from fha lately, the putback rules more clear, we're hopeful the first-time back. but this community is very targeted. >> we have to talk about mortgage rates. it's fed day. we're seeing mortgage rates today lower than they were in may of 2013, before we even talked about taper. and yet, we're seeing mortgage applications for home buyers down again. is credit still too tight? what are you hearing from pulte financial? >> we have projected that the housing market was going to be on a slow, steady recovery. ever since it started rebounding three or four years ago, and frankly we've been more right than not. i know many would like to see the market boom. we think there are a few impediments, including kred. job growth, while it's not robust, it's good. we expect the market to continue to improve but on a slow and steady pace. >> do you expect your buyers here are going to be able to get the credit? these are retirees. they don't have income. they can't document employment. that's tough for some of them. >> here's a great number for you. 43% of our active adult b

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