another is to create more gses to compete against each other.his is the government completing against itself. but still with the government subsidy and guarantees and privileges. isn't a better alternative to do what we republicans are saying at least, you know, long-term, and that's phase out the government's subsidy and guarantee over time, transition housing finance to a competitive market-based environment and implement withdraw of all federal government support? >> i agree with you, congressman. i do not think either the two options you began with look particularly appealing at this stage. i think the two options you laid out at the beginning, full nationalization or creating a whole new class of gses to compete with each other with the same basic model, those do not look like appealing options to me. i did not have a chance to look at your proposal in detail, but i will. i think you ended by saying transition to a world in which you phase out all government support in any form, is that what you said? >> particularly the gse that has a line

we need to begin determining the roles of the gse's.ok for a hearing t testimony of the witness. thank you. >> for one minute and 10 seconds, mr. hennesy. >> none was dumber than that decorated the gse monopolies. in other words, the federal government is hoping that we will let you monopolize the market as long as you securitize mortgages for those that can't afford to pay them. ultimately, the story is one of enriched executives, cookbooks, political bullying, a massively inflated housing bottle -- bubble, and the mother of all taxpayer bailouts. the message from the administration, page 352 of the budget, the administration continues to monitor the situation. it is on satisfactory to -- is unsatisfactory to preserve the status quo. republicans are attempting to lead, i am attempting to be one of them. that is why i have introduced hr4889, over a five-year period, it would transition gse's to a competitive marketplace without taxpayer bailout. >> the gentleman is recognized for one minute. >> it has been ree months since the obama reg

do you think a more -- as you recommend the gses are somewhat unwound and much of that market resumes-- is managed largely by the private sector that we'll be able to attain a 30-year fixed rate and is that a necessary component for american homeownership? >> i think one thing that's helpful to do is look at canada. canada has pretty good home mortgage market and they didn't have our problems. and there are two things that are characteristic. one is people actually made down payment it is. -- payments. they had 10 or 20% down payments. and when you go to canada and you tell them about all the things they happen in the u.s. they shake their heads because even now fha has a 3.5% down payment and you can reimburse yourself -- yeah, it's financeable. it's good to have down payments. and if people really can't afford a down payment of 5% or 10%, you know, we want people to own houses but maybe we're going too far. the second thing is they don't give in canada a tax deduction for all mortgage interest. and i'm in favor of tax ace for your primary residence up to a certain point. but we give

a treasure remains committed to supporting the continued activities of the gse's in conservatorship.e will make sure they have sufficient capital. we will be very careful not to pursue policies or reforms in any way that could threaten or disrupt the issues. thank you. i the forward to your questions. >> thank you. w2hfirst of alle waiting three months for the hearings. >> it sometimes breaks out of the bounds. the other hearing was three weeks ago. i have a problem. we did have a hearing many hearings were by the minority. he also said he was uncomfortable. he mentioned his efforts to rein things them. history gets forgotten here. the republican party control the house from 1996 through 2006. no legislation became law at that point. the house did pass the bill in 2005. many of the republicans supported it. some opposed it as too weak. some thought it was not a good bill. they thought it was a republican bill. the notion that some of us -- that we inhabited the body, that we somehow captured his mind -- i am not sure what it is. it is true. they offered an amendment to strike the hig

spend the first probably 25% of the book on the mortgage markets and securitization process and the gse east, fannie mae and freddie mac and the role they play in the crisis because in many ways they are what started the unraveling said it made sense in the book we haven't gotten into much of that in this discussion so far. here at the center we have comfy and mortgage finance working group and are spending a lot of time thinking about what comes next in the financial system as we try to disentangle the federal role which was essentially supported in 90% of the housing system. we could talk a lot about the diagnosis of how that went but i want to talk a little bit about particularly the future because you argue we won't have mortgage lending or other kind of lending unless we figure out the securitizations process and in particular to talk to the mismatch between long-term and short-term. 30 fixed rate finance is a core concept in the united states, it's relatively unique. there's only a few other systems, cover bonds and others that have been able to produce longer-term finance. and th

extension of the home buyers tax credit, as well as we continue to support the importance of fha, gses and other interventions keeping interest rates low is we are concerned about the fragility of the housing market. overall, again, and this goes to your point earlier, when we came into office, widely predicted economists on both sides of the aisle and more broadly across the spectrum expected on average another decline of 5% in home prices last year. that did not happen with the support of the administration. home prices were basically level during last year. so i think we have had the impact of stabilizing the market, but it is fragile and we need to continue to focus and do more to ensure we're on the right path with home prices. >> one of the programs the federal program is going to end is the purchase of mortgage-backed securities has helped quite a bit and the home buyer tax credit is going to expire here shortly. are you concerned that if we don't extend those important initiatives we're going to add to that @@@@rg$#r')k# our risk management, increasing underwriting requirements

and get fannie and freddie out of it, but i am concerned that if there was a viable alternative to a gseas it in 2006 and 2007? it was not there. at the same time in the mortgage-backed security market, the booming part of the market was the group that sold terrible bundles to the private sector. many of fannie and freddie's losses were because when they sold the securities, when they take that nonperforming loans out, and replace it with a performing loan, nothing country wider anyone did matches that. the way that they bought the securities, when the investors lost them, they invested in the market and they bought ads were asleep mortgage-backed securities -- actually worth less mortgage backed securities. i would appreciate an answer to that. >> i think you're exactly right. you look at the record of what happened, the most apology -- the appalling damage happened outside of fannie and freddie and happened and thrifts, mortgage finance companies, specialized finance companies. fannie and freddie's prime portfolio today has better quality day than the average across the market. i think

credit card communities, hedge funds, pawnshops, automobile companies, with still no plan for the gse'smited taxpayer exposure. one man's opinion, mr. secretary, with respect to the timing, i would call it unacceptable. let's talk about the taxpayer exposure. clearly you are familiar with the numbers. cbo estimates $6.7 billion, with trillions more in exposure there. i see that treasury continues to monitor the situation but my greater concern is -- is there a de facto plan? perhaps not by design, but even by accident? . . . policy instrumentsíúu of the government. charles halderman said, quote, we are making decisions on loan modifications without being guided=ñ solely by profittabili. daniel mu fsm dd said, the government is running fanny and freddie as an instrument of national economic policy not as a business. it appears to many of us, and i'll give you an opportunity to disabuse me of the notion or accept the premise that what we now have are the g.s.e.'s an instrument at of the administration to fund taxpayer funds into frankly a failed foreclosure plitgation plan with foreclosur

where could we have logistical issues out there and we were able to, it was kind of a trick on the gse site but we were able to look open data from nasa in the case of wheat january, 2006 imagery showing the january blizzard. so, all of those maps were made from the open data. all of this that you see are made from open source. >> thank you. i want people to start lining up, and i do have one or two questions for the panelists and that we will shift to the questions here. my first question for both of you is these are fascinating examples of bringing together various databases and data sources to provide a rich and full picture. but the question is should the government be doing this? is that the goal to have the government do this or should the government be facilitating groups such as yourselves making it easier for other groups to be the innovators? either path you might think is the eckert half what is the biggest barrier going further down that path? >> i would say as far as the annie casey foundation, we are a foundation and we fund groups to collect this information, part of wha

gse but each service is a different stage in doing so.ther, to facilitate the sharing of the isr data on the system dod developed common information standards and protocols. a key problem for all of this is that the legacy isr systems, the older systems do not automatically tag data for sharing with certain key information like location and time and the services are also not prioritizing the data that should be tagged. the services expressed concern to us that the dod has not developed overarching guidance or a concept of operations that provides them needed direction and priorities for sharing intelligence information. as a result we've recommended in the reports that the dod develop such guidance and that the services and develop plans with time lines and prioritize and identify the types of isr data they will share consistent with overarching guidance. dod agreed with our recommendations and while my testimony has been focused on the back end of the intelligence cycle, our prior work for this committee has shown there are also problems

gse but each service is a different stage in doing so.acilitate the sharing of the isr data on the system dod developed common information standards and protocols. a key problem for all of this is that the legacy isr systems, the older systems do not automatically tag data for sharing with certain key information like location and time and the services are also not prioritizing the data that should be tagged. the services expressed concern to us that the dod has not developed overarching guidance or a concept of operations that provides them needed direction and priorities for sharing intelligence information. as a result we've recommended in the reports that the dod develop such guidance and that the services and develop plans with time lines and prioritize and identify the types of isr data they will share consistent with overarching guidance. dod agreed with our recommendations and while my testimony has been focused on the back end of the intelligence cycle, our prior work for this committee has shown there are also problems on the fr