lockhart and mr. dickerson. think one of the most telling statements of the gsc's impact on the entire mortgage market came for me when a former freddie mac employee who mentioned that the executives at the company understood that when they begin purchasing junk mortgage-backed securities as he called them, based on subprime they were sending a clear message to the market that these were, in fact, safe investments. in other words, if the duopoly that controls the market it's a message that these have been analyzed to save. prior to that time, fannie mae and freddie were exclusively known for buying more conservative, conforming loans so when they began purchasing junk mortgage-backed security it was a clear deviation from their prior endeavors. do you believe the executives at fanny and freddie understood the message they were sending when they began to invest in junk mortgages on such a large scale? >> they we investing these private-label securities that had subprime, alt a and higher risk mortgages that were

lockhart. i have run over my time and now i would like to recognize mr. garrett of new jersey to provide with his time. >> thank you. i, too, will try not to lay blame or be partisan on any of these things. i appreciate the fact that you are laying tout history of things that it was the reforms did get through the house. they were requested by -- well, you were here sometimes and other people during the bush administrations were here. i remember secretary snow was here and a number of people pushing for limitations on portfolio and other limitations as well to get through the house and it did go to the senate. then senator and not president obama was in the senate at that time, and not being partisan at all one way or another, but he said that we could not get cloture, as i recall to get the piece of legislation to the president's desk. had we done it at that time, perhaps we wouldn't be sitting here today looking back to say, why didn't the world class regulator do the job, because the world class regulator could have potentially done the job. i find int

lockhart i have great respect for you. and i'm asking -- and you did mention something earlier that for years -- i think we sent five bills to the senate and we fought the strong regulator and changed the way they could do business. we never accomplished that but we tried hard. i would just ask you to please, revisit with earnestness with what we've done. i think we're going at the wrong people trying to rea legitimate problem. >> there is si legitimate problem and it's not just new york state. why the attorney general of new york got involved is that all the securities were sold in new york. fanny and freddie put out the rule and they're continuing to look at the impact. and as they get impact back and they understand better what's happening out there, they certainly have the ability and will continue to -- >> you'll look at this? >> we'll look at -- we don't see it directly -- >> that's what i'm asking. you're the one responding to my letter so i'm going to to you. you signed it and i thank you for taking your time to re

lockhart, you are recognized for such time as you may consume to make your remarks. >> thank you, mr. chairman. chairman con jurs ski and ranking member garrett and other committee members, thank you for inviting know speak today about fannie mae and freddie mac, the future and federal involvement in the housing and finance system. with almost $12 trillion in outstanding mortgage debt, housing finance is critical to the u.s. economy. as the conservator, fhfa's goal is to preserve the fannie and freddie. as the regulator, our mission is to ensure that the enterprise provides liquidity, stability, and forgeability to the market a sound manner. that is a statutory responsibility as it is the public purpose that congress gave the enterprises. the enterprises own or guarantee 56% of the single-family mortgages in the country for a total of $5.4 trillion. given that massive exposure, the best way to preserve the assets and fulfill the mission is to stabilize the mortgage market and strengthen the safety and soundness. working with the federal reserve and the bush and the obama administratio

so what we had to do was take that lockhart, figure out what we needed to do, everyone you know, worked overtime. the policies and procedures in place, and we worked as hard as we could implement. once i found that it was implemented, then the uncertainty died down. industry accepted and we could go on about our way. this is the same situation i'm hearing about now. as soon as we can issue guidance and regulations to help industry interpret this law to better the industry will be and they will comply. >> we appreciate that. and jesse know the atv supported this law. because they had good safety manders. and that's the irony of this, they supported us and it was interpreted in a way that i don't think any senator or anyone expected. just one last thing if i could, mr. chairman. the virginia grain pool act is something that i also worked hard on after we had a tragedy in minnesota with abigail taylor. and there with senator pryor and others we were able to get that done a few months after this tragedy happened your end it started to be implementing -- intimate all over the country. we wor