better risk of fha and that forces fha to have to raise premiums and threatens the viability of fha and i do think there's a way that i can make sure that my friend across the street has not been undermined by what fannie and freddie are doing. >> thank you. final question. what sort of counter cyclical role should play in the market? >> fha, fannie and freddie are all created to be counter cyclical. they really should be the support there in times of stress. they should be there to put a floor under the market. my view is they should not be leading the charge over the cliff. they should be there to be the net to catch the market when it goes south. >> thank you. thank you to each of you and with that, chair, i yield back. >> thank you. >> the gentlewoman from pennsylvania, mrs. dean is recognized for five minutes. >> thank you, madam chair and thank you for holding this important hearing on the question again on the lack of affordable housing and the need for more affordable housing and the reforms that the administration seeks. i thank the secretaries and directors for being here

>> is this a question on fha? >> it was. >> i want to make sure that the fha and gses are competing in a way that's not counterproductive. i would call it as a skimming of the cream, taking the better risk away from fha. that forces fha to have to raid premiums. i think there's a way i can make sure my friends are not being undermined by what fanny and freddie are doing. >> in your view, what kind of role should fha play? >> it's important to remember that they were all created to be countercyclical. they really should be the support there in times of stress. they should be there to put a floor under the market. they should not be leading the charge of lendings over the cliff. they should be there to be the net to catch the market when it goes south. >> thank you. thank you to each of you. with that, chair, i yield back. >> thank you. the gentle woman from pennsylvania, ms. dean is recognized for five minutes. >> thank you, madam chair. thank you for holding this important hearing on the question again of the lack

along with tens of thousands more and other fha assisted low-income homeownership programs.in may 1974 hud was in possession of 78,000 single-family homes that had been foreclosed upon. with tens of thousands more in a default status which meant they were months away from being going into foreclosure. congressional investigation impropriety in the homeownership program showed that federal appraisers were taking bribes and inflating the value of the dilapidated homes by three times or four times their actual work. local mortgage bankers were also accused of accepting bribes to ignore inconsistencies in paperwork in order to authorize loans for these homes. newspaper reports and hundreds of federal indictments identified local fha officials, appraisers, real estate agents and mortgage lenders all involved in the twiddle. these were not only scandals but crimes that had been committed against poor and working-class black people. in cities as diverse as chicago, detroit, philadelphia, seattle, san jose, columbia south carolina, real estate brokers fha officials and mortgage bank

tom barrett's company, one company than it did to every working-class family in america through the fha program. but they said we are making loans to other banks the government is too big of a hassle so we looked at the lending and we found that lending was not only down from the peak of the bubble that even from the best one - - the busted had gone down dramatically now they are investing in wealth management and boutique products and then in dc they play a game where they claim to not have a branch because of a have a branch than they have to follow the community reinvestment act to require them to lend in the working-class neighborhoods they have an office but not a branch across the street from the white house making loans to rich people so they made more than 1000 loans in dc over a two-year period only 23 were two african-americans. jamie dimon got really mad when i mentioned that he announced he was opening 400 branches across the country so that was very exciting. these people don't like to be called out to. i heard from different centers that chafes lobbyist was in their office

newspaper report and hundreds of federal indictments identified local fha officials, appraisers, real estate agent more mortgage lenders were all involved in this. they were not only scandalous but they were crimes made against poor and working-class black people. diverse as chicago, detroit, philadelphia, seattle, san jose, columbia, south carolina. real estate brokers, mortgage bankers were arrested, invaded for criminal conspiracies to commit fraud. 1974, 28 officials had been indicted for their role in the housing scandal along with other mortgage real estate brokers. the fbi and invite your had 1930 open investigations into the homeownership program. instead of focusing on the corrupt practices of the private sector at the heart of these programs, policymakers scrutinized the homemaking skills and housekeeping abilities of black women. the discourses of onset black mothers, marshaling the domestic dysfunctions in black household, guaranteed the ease with which blame for the decline of the homeownership program could be attributed to the apparent ineptitude of black single parent

everyone here is well aware fha is broken and then to become to bipartisan agreement and why we challenge all of us and it will take a bipartisan effort and we are more than willing to work with anyone to find that. looking at the important ideas to the market process it will only move the needle so far and then to have those issues of the finance reform. congress coming together to solve major problems isn't a foreign concept looking at most states with south dakota as an example they look at every single bill that comes before them they pass the budget and then now they look at the laws they created. that same type of attitude has to be shown within congress. here on the senate banking committee we have had lenience in the past but for the bipartisan work of the housing finance reform act better known as johnson but it has been six years since we've had that discussion that would be an excellent place to start on gse reform i know there are many ideas for amendments i hope it would include johnson crapo on a future markup. i know my colleagues have already had a chance to ask some quest

everyone here is aware of the fact that the fha is broken, and at this stage of the game, we have yet to come to a bipartisan agreement on how we want to fix it. so i would challenge all of us once again to sit back and look at if we really want to make changes, this is going to take a bipartisan effort to get it done, and i would be more than willing to work with and a member come on either side of the aisle, to try to find that step forward. at's be honest, as we look the bills before us today, important ideas that i think should move forward to the markup process, they are only going to move the needle so far. to make housing affordable and the long-term, we have to confront the tough issues confronting us in a fundamental house financing reform. togress coming together solve major problems does not have to be a foreign concept. heck, if you take a look at most of our states, i will give south dakota as example, in a matter of 40 days and 40 nights, the legislature comes together and looks at every single bill that comes before the, they pass a balanced budget, and then they go and

everyone here is well aware of the fact that the fha is broken and yet at this stage of the game we have yet to be able to come to a bipartisan agreement on how we want to fix it so i would challenge all of us once again to look if we want to make changes, it's going to take a bipartisan effort to get it done and i would be more than willing to work with any member on either side of the aisle to find that step forward . i guess we also have to be honest as we look at the bills before us today which are important ideas that i think should move forward through the market process but they're only going to move the needle so far. if we really want to make housing affordable for the long-term, we have to tackle the tough issues confronting us on the fundamental housing finance reform. the thought of congress coming together so to solve major problems doesn't haveto be a foreign concept . if you take a look at most of our states, south dakota as an example in a matter of 40 days and 40 nights the legislature works through and look at every bill that comes before them. they pass a balanced budg

can get to actually make the major changes that are necessary if we want to fix what's going on in fha truly believe that reform the federal housing administration and the way it operates within how it is critical. it's going to take a bipartisan effort. everyone here is well aware of the fact that the fha is broken and yet at this stage of the game we have yet to become to a bipartisan agreement on how we want to fix it. i would challenge all of us to sit back and look better if we really want to make changes and it's going to take a bipartisan effort to get it done and i would be more than willing to work with any member on either side of the aisle to try to find that step forward. i guess we also have to be honest as we look at the bills before us today which are important ideas that should move forward to the market process but there only to move the needle so far. if we really want to make housing affordable for the long-term we have to tackle the tough issues confronting us in the fundamental housing finance reform. the thought of congress coming together to solve major problems

integrated neighborhoods for that is a function and then it becomes that accumulates now we don't have those fhanes or the rules that make it so youou can't formally get credit or not buy a house in a black neighborhood but now we have generations of the notion that neighborhoods where black people are are worth less and the price of houses depends on what people pay for them. so we have a system that the assumption is if the neighborhood has a lot of black people it's worth less i will not pay that much to live there so is that perpetuation that the value does not accrue in the samee way. it's also true black neighborhoods get less services even affluent it's harder to get a grocery store. so the consequences because schools are fundedd by local taxes so yes the schools are poor because they don't have nearly as much money or investment or adults to supplement the school funding because of white flight. so then the question that you pose is that i don't want to live there because these are better. but sure. it's important to understand the wholele structure is a consequence of how race is funct

we don't have those fha guidelines anymore.we don't have the rules that make it such that you can't formallyt buy a house in a black neighborhood. but we have now generations of the notions that neighborhoods where black people are are worth less and we know that the price of house depends on what people will pay for them. we have a system where the assumption is if the neighborhood had a lot of black people it's worth less and would not pay that much to live there.there is a perpetuation of what some socially only just called this accumulation. so that the value doesn't accrue in the same way. and black neighborhoods even all other things equal. it's also true that black neighborhoods get less services even affluent black neighborhoods. it's harder to get a grocery store. the consequence of all that is because schools are funded by virtue of local taxes. is that yes the schools are poor because if the schools don't have nearly as much money and nearly as much investment and nearly as many adults who can supplement the school funding because of white flight then the question you are posing a