. >> professor levitin. am i making any sense to you? >> perfect sense. >> you must agree with me then? >> of course. this is do you -- should we approach this with a stick or a carrot or both? treasury's approach has been to offer a carrot. taxpayer-funded incentives paid to servicers, lenders and in some cases to homeowners to encourage hamp modifications. a carrot is a good way of encouraging behavior. when it's combined with a stick, it's likely to be much more effective. take the carrot and if you don't, out comes the stick and bankruptcy will be the stick. there are a few things that ms. schwartz said that i want to comment on, not so much to disagree with her but just to expand on her comments. ms. schwartz rightly noted that servicers who sign up for hamp, it is largely voluntary whether they sign for hamp, they are then under a contractual obligation, they have a contract with fannie mae that as treasury's agent that they will operate under the terms of the program. it's worth noting what's the penalty for a servicer that fails

i mean, what's the difference between what i ask you and what professor levitin responds?does he understand this program clearly? >> we have talked several times and i think what's important here, sir, is a know, you're right in that if 30% or 40% go back into default and you try another modification, for instance, maybe the hamp modification, you know, that's another bite at the apple before you go to foreclosure. and what i would say with my numbers that are accurate is we count every foreclosure. so they would flow through our pipelines and show you what happened and clearly millions of people are not in the final stage of foreclosure every the effort, that's clear. two out of three don't go to foreclosure and that's historic in the years through these efforts. it used to be one out of two go to foreclosure. more works needs to be done, i totally agree. but every loan should be reviewed for a workout alternative. that is the prescriptive agreement for what hamp is. after they have been exhausted, they go to foreclosure sale. i would like to think that is exactly what is