of fhfa's past work in this area. this includes having fannie and freddie conduct additional credit risk transfers for their single-family guaranteed business. these transactions have opened up private capital to share in credit losses which protects taxpayers from bearing all of the potential losses. our 2014 scorecard requires each enterprise to triple the amount of risk transfers in 2014. this will be an increase from $30 billion of unpaid principal balance transfers last year to approximately $90 billion requiring ongoing reductions in the enterprises retained portfolios. the senior preferred stock purchase agreement with the treasury department require the enterprises to reduce their portfolios to know more than $250 billion each by 2018. fannie and freddie must develop plans to meet this target even under adverse market conditions. we are also requiring them to prioritize selling their less liquid assets on to reduce risk and take advantage of current investor interests. as their portfolios continue to decline,

of fhfa's past work in this area.his includes having fannie and freddie conduct additional credit risk transfers for their single-family guarantee business. these transactions have opened up private capital to share and credit losses which protects taxpayers from bearing all of the potential losses. our 2014 scorecard requires each enterprise to triple the amount of risk transfers in 2014. this will be an increase from $30 billion of unpaid balance -- principal balance transfers last year to approximately $90 billion in 2014. on top of increasing the amount of credit risk transferred, the we also expect each enterprise to try new risk transfer structures to assess sustainability in different market conditions. all of this is consistent with the commitments i made to the senate banking committee during my confirmation process. in addition, we are requiring ongoing reductions in the enterprises retained portfolios. the senior preferred stock purchase agreements with the treasury department require the enterprises to red

of fhfa's past work in this area. this includes having fannie and freddie conduct additional for theirk transfers single-family guarantee business. these transactions have opened up private capital to share and credit losses which protects taxpayers from bearing all of the potential losses. scorecard requires each enterprise to triple the amount of risk transfers in 2014. fromwill be an increase balanceion of unpaid transfers last year to billion inly $90 2014. on top of increasing the amount of credit risk transferred, the we also expect each enterprise to try new risk transfer structures to assess sustainability in different all of thistions. is consistent with the commitments i made to the senate banking committee during my confirmation process. in addition, we are requiring ongoing reductions in the enterprises retained portfolios. the senior preferred stock purchase agreements with the treasury department require the enterprises to reduce their portfolios to no more than $250 billion each by 2018. fannie and fred

one of the things that you said is that you don't necessarily see it as the role of fhfa to be shrinking fannie mae and freddie mac. that marks a significant departure from the philosophy that was pursued by your predecessor. so i was wondering if you could talk a little bit about what actually do you see as your mandate at fhfa? >> well, we have multiple mandates. we have the preserve and conserved mandate, assuming the conservatorship part of the statute. we have a mandate to assure liquid resilient housing finance markets. and i think we have a mandate to reduce the risk exposure to taxpayers. but that's different than shrinking the footprint. so i try to make the distinction between shrinking the current footprint of fannie and freddie and shrinking their risk exposure which i'm committed to the latter but i don't think it's our role, necessarily to shrink the footprint of fannie and freddie. >> and why not? why wouldn't you want to do that? >> well, if it's not that i'm opposed to it. we will certainly allow it to happen to the extent that the private sector is ready to step into th

i was wondering if you can talk about what exactly do you see as your mandate at fhfa? >> multiple mandates. we have preserve an conserve mandate. we have a mandate to assure liquid resilient housing finance market and i think we have a mandate to reduce -- to taxpayers. i try to make the difference between shrinking the current footprint of fannie mae and freddie mac and shrinking their risk exposure. i don't think it's our role necessarily to shrink the footprint of fannie and freddie. >> why wouldn't you want to do that? >> it's not that i'm opposed to it. we will certainly allow it to happen to the extent that the private sector is ready to step into the space. if the private sector is not ready to step into the space and you shrink what fannie and freddie are doing, then you do damage to housing finance in this country. that does damage to the economy and it does damage to the possibility of affordable housing and homeownership. >> the senate banking committee passed the first major bipartisan legislation to deal with fannie and freddie. >> it's hard more me to ans

. >> host: what is the fhfa and what is its role? >> guest: that was the agency created after the government took over fannie and freddie and it oversees fannie and freddie and there's a lot of attention focused on this agency now because it has a new director melvin watt a longtime north carolina congressman and he is basically now saying that until congress comes up with a plan he does not want to reduce the footprint of fannie and freddie on the market which is a huge reversal from his predecessor who is saying look these two institutions have to be wound down. i'm going to do everything to prepare for that wind down any research using the footprint so that was a major policy shift. >> host: daren blomquist there have been a rash of articles recently about the fact that student loans may be contributing to the bad housing markets. have you seen those and what is your take on that? >> guest: yeah i think it's really interesting and it makes sense. we don't have the data on the student loan specifically but it makes sense that if yo

absolute love him at fhfa. he is fantastic. he came out. went into hiding for a long time.p. first thing he said, hey, we don't have any money. could you keep taking it all away. that is probably not a good thing. we like that. then he comes around and says i will make it easier on warrants like brian described so more lending can get done. we're fans. we're watt fans. >> he needs to go spend vacation time in the bahama a mass with charlie wrangle and anything else. >> we're good to go. liz: give him for at least assessing the situation. should fannie and freddie, you guys stay as government sponsored entities? >> they should but got to take them out of conservatorship. they should have taken them out of conservatorship a year ago. >> yeah. >> they took the biggest bailout in the history of the world. we all know that people are spreading that information. what is not talked about they paid the whole darn thing back plus 15 billion plus dollars. in 7year history, they have been profitable for 72 of them. they have been philanthropic, kept 30-year fixed-rate low mortgage ava

i know you didn't vote to put him in this office at fhfa but he is. there is no reform any time soon, even though there's been several votes to get the process moving, how much control does mel watt have over expanding the gses, kind of putting them in a similar mode as they were in before the credit crisis? >> well, first of all, i don't think anyone should think that there isn't a demand on capitol hill for major gse reform. there is. bill passed out of committee recently. i couldn't support it because some of the significant details, but there is a broader consensus for gse reform and nobody should think that the gses are just going to be left as is, status quo for years and years. however, until we do that, you're certainly right. mel watt does have a lot of leeway, too much leeway in my mind, and unfortunately he's not moving forward with the sort of reduction of loan limits and reduction of footprint that fhfa was talking about before his appointment. >> you know, senator, i really understand and i have great respect for your comments that there

. >> one topic that is not on fhfa's agenda, because it is not part of our statutory mandate, is housingfinance reform legislation. there are many people who expected that i would start talking about gse reform legislation the minute i got to fhfa. regularlyaware and expressing my belief that hip should never be viewed as a permanent condition or as a desirable end state and that housing finance reform is necessary. however, congress and the administration have the important job of deciding on housing finance reform legislation, not fhfa. instead, our task is to continue to fulfill our statutory execute our strategic plan, and to manage the president status -- the present status of fannie and freddie. >> all of director watt's remarks are available at www.c-span.org. coming up tomorrow, live coverage of several events with administration officials. rice is interviewed at a women's foreign policy group event by judy woodruff. at two: 15, budget rector silvio burwell. -- sylvia is live tomorrow afternoon on c-span. a lot of time you would say, look, this is not for attribution, this for ba

starting to ease up, and, you know, there was some positive comments yesterday from mel watt, head of the fhfathink credit's going to continue to loosen slowly. but you can certainly get a loan. it's a great time to get a loan and buy a house. liz: i'm going to remember you said that. [laughter] because a lot of people have trouble, you know? they're being very strict in certain reasons. steve, thank you for giving us that feel or what's going on on the ground. we appreciate it. >> thank you, liz. liz: stephen hilton is chairman and ceo of meritage homes. we hear from the business leaders who say i don't even know where they got that number for nahb because sentiment is certainly a varying degree of emotions. but we're watching this and everything else. the closing bell, yeah, the markets just couldn't quite push hard enough against that number though. we're seeing the closing bell in about five and a half minutes. home builder sentiment pretty shabby, but what are online real estate films seeing? here's a hint: kind of a moon shot, meaning that people are at least viewing, they're perusing, t

so servicers are not regulated by fhfa. they are regulated by cfpb but not on the capital basis so there is a shortcoming there. we can control their relationships with fannie and freddie, right? that is the space in which we operate. we have looked very carefully, in some cases much longer and more carefully than a lot of people would like for us to look at evaluating when these requests for transfers are made to see if -- are these people responsible, to whom are the companies responsible, to whom the transferring servicing rights are being transferred. what is their expertise, what is their history in the space. what kind of capital do they have if things start going bad, what kind of backup will the lender provide to take the servicing back if necessary if the service does not. all those factors and we look at them very carefully in making our evaluations. and then sometimes there are short-term versus long-term competing considerations. the service or might do the servicing better. the longer-term concerns you are worr

what does he have on the power of fhfa director?ave done and something we would have supported would have been to lower the loan limits for the private sector. he has chosen not to do that. we have encouraged it so that the private market can do that. over 90% of the mortgages in this country are under written by the taxpayers. if tomorrow morning mel watt decided that there will be principle reduction on mortgages and there isn't anything he can do no stop it? >> as conserve ter and regulator he has certain latitude. i do know he has the ability to do things with the gp's and the loan limits and obviously i think the entities have been doing principle write-downs with the settlements. >> lis ep, we are pretty much out of time. i want you to answer yes or no to the following questions. is it now an entitlement owning a house predicated on political ties? >> we have nationalized the housing market. when you can control financing you control the flow of housing in this country. thank you congressman for taking the time. >> back to you

but where do you think about leaves the fhfa in terms of advancing administratively some type of housing finance overhaul. i know that he said he really wasn't going to reduce legislation. but the worry think that he would take the if congress chooses not to act? >> first of all, as he said the vote is coming up and that is just part of the landscape and him saying that my job is not to kill that landscape by providing stable housing system and the public role in housing finance and people think that why it is at abnormally high levels now and this is how private-label securities, even at their peak were not dominant in the market compared to the role the government waited and provided that foundation that our system operates under. and then people have alluded to the tightness of the credit market right now and the credit market is not just affecting some homebuyers but affecting the broad economic recovery and holding it back as housing is really depressed compared to normal levels and not compared to the boom years of the mid-2000. and credit is most constricted for those first-time h

what is the fhfa? >> spinnake >> that was the agency created after fannie and freddie and it oversees fannie and freddie and there is a lot of attention focused on this now because it has a new director and he is basically saying until congress comes up with a plan he doesn't want to reduce the footprint that is a huge reversal from his predecessor who said these institutions have to be wound down and dirty thing i can and he was reducing the footprint so that was a major policy shift. we are sitting here in a city designed by a frenchman of the engineer and architect, the great symbolic work of the sculpture in the gateway. countless rivers and universities and colleges followed for the country. we don't pronounce them the way they do but if this country is greater than most americans appreciate. >> we've read the interview along with other noted the storytellers from 25 years with the booknotes and conversations on sunday at eight published by public affairs books and available at your favorite books

. >> so do we need congress to do legislation, or could fhfa, how much could they advance unilaterally? administerrively any -- administer straitively? >> reporter: down shifting to first gear or maybe second gear or something. but the rest they could do. the worry i have still is the competition, right? that was the too big to to fail in competition, right? there's going to be two firms, they have market power. of course, in the old system they used their market power in the same way amazon is using its market power against publishers as we all read a couple days ago. that's the concern you know, can a regulator get at that? i don't know. >> but there's also, i mean, there have been great benefits to what the gses have done, market power and concentration of involvement and concentration of risk, honestly, to the taxpayer and to the government aside. the gses have created an amazingly efficient and standardized market. you contrast the gse world of the two securities and du and lp and how a loan is done in the old dales versus the wild, wild west of capital labor markets -- >> no, no,

jeff, why don't you try to explain, especially in light of mel watt, director of the fhfa yesterday launching.0. thanks for having me on, rick. i think the basic element here is that mortgages as they're currently construed are unprofitable to banks and so the only way to make any money in the mortgage business to have the government subsidize it in some way, shape, or form. the current thing with mel watt and the gse what they're looking to do there, essentially expand the mortgage pool to allow more leverage into essentially mbs trading. >> now, you know, if you want to figure out a way to create mr wealth, i think -- more wealth i think that's a great idea. if the piggy bank becomes this faux appreciation that gets funneled in a house that becomes an atm on the quote/unquote wealth effect you put that in an interesting perspective, maybe you can elaborate? >> well, first of all, i mean look the major economic orthodoxy is aggregate demand. the way you fill demand is through credit and debt. so the primary channel and all the orthodox literature agrees. the primary channel for aggregate dem

. >> you can watch more of fhfa tomorrow mel watt on makers". >> you can now take c-span with you wherever you go with our c-span radio app for your smart gone or tablet. c-span tv ll three hannels or c-span radio any time. you can play podcasts of any of our recent shows. take c-span with you wherever you go. download your free app online or o your iphone, android, or blackberry. [captions copyright national cable satellite corp. 2014] [captions performed by national captioning institute] >> on thursday the president and mrs. obama took part in a memorial in new york city. also