we also -- we are also concerned the fhfa's new compensation proposal would sharply reduce servicing revenue that currently only covers cost. moreover, this proposal creates a perverse incentive by rewarding originators and servicers of nonperforming loans and punishing community banks. the most significant risk in applying standards that are too rigid and previptive in reducing servicing income is that it would cause many community banks to exit the mortgage servicing business and accelerate consolidation. any national standards developed by congress or the regulators must exempt community banks. i urge you not to tamper with our success. thank you for holding this hearing and for the opportunity to present the good story of community bank mortgage servicing. i'll be happy to take your questions. >> thank you. >> thank you. chairman johnson, senator corker and members of the committee, thank you for the opportunity to speak here today. my name is faith. in 2007 i joined the hope now alliance as its executive director. the foreclosure issues we faced in 2007 were viewed as short-term

the fhfa can obviously pay a large part in your blowing of the loan limit is one step. we could lower them further on a gradual basis. to 18 months will be the next that. enable the private markets to open a. i think fhfa could, you could limit the amount of borrowing that bank can do from the home loan bank system. you could encourage the covered bonds legislation and market to open up to be another funding vehicle. you know, i think there's a portfolio of approaches that are going to attack the u.s. housing system, be the solution and i think there's quite a few of these we can do in the next 18 months without legislation. and i think those are just a few of the things we should work on. and i think we will find the answer, we will rise to the top of. >> thank you very much. gentlemen, visiting very, very helpful to the subcommittee. and as senator corker suggested, please don't be surprised if you're called again to get your views and your advice, because it has been extraordinarily helpful. thank you very much for your testimony and your appearance today. some of my

with the assessments and subsequent required changes imposed by the federal banking regulators and by fhfa? >> in my testimony i said that in the event that there -- that a borrower has been damaged, he or she should be entitled to be made whole for those damages. in terms of harm, it's important to keep in mind that in the case of foreclosures in this foreclosure process, as i mentioned before, the length of time during that 400-plus-days, depending on what state you're in, while the process is working, that borrower is not monday tailor damaged, in fact, that borrower is living rent-free so to speak during that period of time. now, there are in place in all 50 states mechanisms for making, if there are damages, making borrower whole and i'm suggesting that in every case that should take place. but i think it's important for the committee to look at who is actually being damaged in this process. >> my time has expired. >> go ahead. >> i'll proceed to the second round if need be. senator corker. >> for the witnesses, again, thanks for your testimony. one of the folks in our office, as we w

at eighth that experimentation is good -- fhfa that experimentation is good. finding the right solution has value. move the dialogue away from eliminating the tse's tomorrow, because they were bad before our their pieces that we want to preserve of the gse's over time? i think it is doable. >> i propose one idea. there is no single monolithic solution. all of these markets are complex and the price risk differently. the subordinated bonds solution may be the best solution we may have to go back and executed to see what the cause of the credit is. the cd of markets are one avenue of exploratory thought. i do not have a particular singular solution. you have to prices, find out what the costs are and what the banks -- best execution is for the government's balance sheet. >> there are a portfolio of things we need to work on in the interim, given the legislation in the near term. 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

i think the key factor there is sending the message to fhfa that experimentation is good. you know, that's what you want to see and you don't need to have sort of a sole focus on conservatorship of every dollar today and that finding the right solution actually adds value to the gse's over time. and the other important component is to try to move the dialog away from well, let's destroy -- you know, eliminate the gse's tomorrow because they were bad tomorrow. the managements who did that are all gone. and are there pieces of the gse's that we would like to preserve over time? so anyway, i think it's doable. >> thank you. mr. valkenburg, please. >> yeah, [inaudible] >> wrong button. there's no single monolithic position. and all these markets are complex and they price risk differently and there's different audience of investors so the subordinated bond solution may be the best solution. we don't know you believe we actually go out and try to execute and see what the price and the cost of that credit is. so i propose the market as one avenue of exploratory thought. so i don

the fhfa can obviously pay a large part in this. lowering of loan limits is one step, we could lower them further on a gradual basis, over the next 18 months would be the next step, it would enable the private market to open up. i think the fhfa could -- you could limit the amount of borrowing that banks can do from home loan bank system, you could encourage the covered bond legislation and market to open up, to be another funding vehicle. you know, i think there's a portfolio of approaches that are going to attack the u.s. housing system and be the solution for mortgage finance and i think there's quite a few of these we can do in the next 18 months without legislation and i think those are just a few of the things we should work towards and then i think we'll find the answer, we'll rise to the top quickly. >> thank you very much. gentlemen, this has been very, very helpful to the subcommittee and as senator corker suggested, please don't be surprised if you're called again to get your views and advice because you've been extraordi

fhfa could limit the borrowing from the home loan banking system. you could encourage bond legislation to open up to be another funding vehicle. there is a portfolio of approaches that will attack the u.s. having system and be the solution for finance. there are a few of these we can do without legislation and those are a few of the things we should work towards and we will find the answer and fries to the top. >> thank you very much. this has been very helpful to the subcommittee. don't be surprised if your called again for your views and advice because it is extraordinarily helpful and thank you for your testimony and your appearance today. my colleagues might have additional questions. we will ask that these questions be submitted before the end of the week. by friday is fair and we will ask you to return them as promptly as possible. thank you very much. the hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> 10-9-eigh

>> fhfa. >> okay. that will come in and lease space at the constitution center but if they come i in the same rate, $44, $47, are you saying they would be under the overall office space for the? >> for the rent cap, yes. we have seen deals that are below that as i said in some locations. u.. one of the advantages at gsa is we work with the office of management and budget and one of the issues the sec had in here in our testimony and working with them was developing that up front requirement and figuring out how many people they had and the rate utilization rate and were they going to be fully funded so for all our leasing actions we not only work with the agency to make sure we understand that but also work with our budget examiner and their budget examiner as i mentioned in my opening testimony to make sure the staffing levels are supported and the rental payment will be supported in the president's budget so we know the funding will be there to pay for it before we proceed on an acquisition like this

>> fhfa. >> okay, that come in and lease space at the constitution center and if they come at the same rate, are you saying that would be under the overall rate for this kind of office space in dc? >> for the government-wide per represent cap, yes. there's some deals below that in some location, you know, north of massachusetts avenue and the developing areas we have gotten better rates than that. >> okay. >> for that part of town. >> all right. a different question and one that deals with the corrective activities that was outlined and corrective activities taken place at the occ in light of this i would say scandalous behavior on the behalf of some employees there. what is the applicability of corrective action and how does it apply to all the federal agencies? mr. foley? >> i mean, i think it is an example of how important it is to get the checks and balances correct. one of the advantages we have at gsa is we work with the office of management and budget, and so i think one of the big issues that fcc had in hearing their testimony and working with them was in developing that up fro