market or insuring mortgages. what it was thought of to be was an institution available to provide money for homeowners who didn't have the money to repair homes during the great depression and afterwards, but what it was really thought to be was a job creation bill, and that was because they figured on that time, what we're going to do is we're going to create a few bucks for the foams that didn't have the money to prepare their homes, and now we will, and that's exactly how it came about. you diminish america's opportunity in my capacity, especially today when we're just beginning to remove ourselves from one of the most horrendous housing situations that the country's ever seen, then you do that to destabilize the recovery of the american housing market. the -- we anticipate that probably in 2012, we'll see an appreciation rate of about 1.2%. after that, we see a better appreciation rate. that comes from our economists at the national association of realtors. we also anticipate, frankly, that some of the areas

countrywide and other mortgage lenders, many of which were bundled into mortgage-backed securities andvestors around the world. bowen's job was to make sure that these mortgages met citigroup's own standards-- no missing paperwork, no signs of fraud, no unqualified borrowers. but in 2006, he discovered that 60% of the mortgages he evaluated were defective. were you surprised at the 60% figure? >> bowen: yes. i was absolutely blown away. this... this cannot be happening, but it was. >> kroft: and you thought that it was important that the people above you in management knew this? >> bowen: yes, i did. i... >> kroft: you told people. >> bowen: i did everything i could, from the way... in the way of e-mail, weekly reports, meetings, presentations, individual conversations, yes. >> kroft: how high up in the company? >> bowen: my warnings, which were echoed by my manager, went to the highest levels of the consumer lending group. >> kroft: bowen also asked for a formal investigation to be conducted by the division in charge of citigroup's internal controls. that study not only confirmed bowe

mortgage insurance companies of america. mr. -- president of national association of realtors and ms. sir -- i'm trying to hurry to get the sin. , wartell secretary for american progress and thank you all for being here. without objection, your written statements will be made part of the record and you'll be recognized for five minutes. the separator testimony. we will start with mr. scire. you're recognized for five minutes. >> thank you. none of chairman, members of the committee, thank you for the opportunity to be here today to discuss fha's mortgage insurance program. since 1934 come fha is an important player in the mortgage market, especially for first-time homebuyers. fha insures these funds under its mutual mortgage insurance funds. recently, had released the results of its latest independent actuarial review, citing the capital ratio used to measure the fund has declined 2.24%, well below the statutory minimum of 2%. this is the third consecutive year -- >> mr. scire, could you pull your microphone a little closer.

>> they are a major originator of mortgages and seller of the mortgages to fannie and freddie, so yes>> well, there's some contradiction in that, isn't there? >> there is difficulties here. >> so why do you continue to give them business? >> they are a significant originator, and -- >> i -- >> we are dealing with the problems of the mortgage servicing part through business -- the business terms that exist today with regard to servicing contracting. >> what the heck is he saying? i'm concerned about the servicing business. as a matter of fact, i mean, we're beginning to focus, and i've been focused for a long time on services there at the crux of this problem that we have. i mean, not just with you, but with everybody. i want to know why they are still doing the servicing. just because they're the originators? >> well, as something they own, they have those servicing rights, and those servicing rights have been transferred, and there's been a tremendous amount of work done by both companies to go into bank of america, work with bank of america on enhancing the way they go about doing t

if i have a mortgage and risk retention, how my going to compete? >> no question there is an important balance the needs to be struck between making sure we do not repeat the mistakes of the past and but creating a robust private market. for fha, we have a range of mechanisms, including our premium levels that have allowed us, and loan limits, which have allowed us to ensure the private and this sector can function very well. >> you have your fees and you have limits. because of the current limits, a understand you were not thrilled with. there is no private market. there are uncertainties, i have had an fha loan. were probably sold hundreds if not thousands of them. it is not my opposition there but you are a huge portion of the market today. >> has your legal staff thrown out any concerns about the fact that you are beyond the 2%? and any sort of recourse in your capacity violating the law? >> i would say we have had discussions with the legal staff. my concern is on the business side, we need to take steps to make sure the capital reserve gets re

chris waple owned a restaurant, but when it went under, he couldn't make his mortgage payments.ple and his family were evicted from the house that he'd lived in for 23 years. he'd raised five children here. that was more than three months ago that chris waple left this house, and it's still vacant. there's not a "for sale" sign in front of it, because the realtors tell us, if there are too many "for sale" signs in one block, it makes everything harder to sell. just four doors down, graham jarvis learned that the hard way. his house has been on the market six months, but only six people have taken a look. next door, jennifer wylie has seen the value of her home drop 50%. you can't see it in this neighborhood because they're keeping up appearances, but a quarter of the houses here have been emptied by foreclosure. and on this handsome block in well-to-do cleveland heights, at least four vacant homes are scheduled for demolition. former county treasurer jim rokakis says banks could stop the wrecking crews if they would only reduce the loan balances on underwater mortgages. >> rokak

home mortgages. but the housing meltdown brought them to the brink of collapse, and the government seized control of both in september of 2008. since then, the federal government has lent the firms more than $150 billion, the largest bailout of the financial crisis. mudd was fired from fannie after the federal takeover, and today, he insisted the lawsuit should never have been brought. he said: "every piece of material data about loans held by fannie mae was known to the united states government and to the investing public. the s.e.c. is wrong." fannie and freddie entered agreements with the government today accepting responsibility for their conduct without admitting or denying the allegations. federal criminal investigations are also underway into the two firms. we take a closer look now at today's charges with edward pinto. he's a resident fellow at the american enterprise institute, and served as executive vice president and chief credit officer for fannie mae in the 1980s. and lynn turner was ch

the new mortgage finance agency would be able to guarantee and wrap high quality residential mortgages. in those wraps and in those guarantees they would receive a fee which would go into a catastrophic fund to back up the risk on those mortgages. but in addition to that the q.r.m. requirements would make it absolutely essential that no loan was made higher than 95% loan to value. any loan above 70% would have private mortgage insurance on the amount up to 95%. and within 36 months the agency would be required to have supplemental insurance coverage to take the risk down to 50 cents on the dollar. it would be required by the fifth year to have a game plan established and a plan of liquidating the asset and privatizing the guarantee to the private sector. that's a very important process because it's the bridge to the end of freddie and fannie and taxpayer guaranteeing of residential mortgages. but you would have a situation where with a down payment of 5%, private mortgage insurance of 25% and supplemental insurance of 20%, the risk to the government would be 50 cents on the dollar. and

why smart young people say, a mortgage? no way. with your mortgage, worried about foreclosure. we can help you keep your house. all we ask for in return is that you submit to our plans for galactic domination. [laughing] [laughing hesitantly] [laughing evilly] sign. announcer: if you're facing foreclosure, talk to the right people. speak with hud-approved housing counselors free of charge at... >>> for baby boomers, the white pick the fence two car garage, mortgage to pay off in 30 years was part of the american dream. pulling ourselves out of the financial crisis that dream may be changing. home nest egg, a home. now it's a broken egg. this is going to be critical how people retire and how younger people view home ownership. >> it's frightening for a lot of baby boomers because they anticipated that when it was time to retire, sell their home, downsize and take a lot of cash out. that's not happening to a lot of baby boomers because it's of what happening in the market. however, the reality is, if i'm young, this still is a great time to own a home. interest rates are at histo

many mortgages are backed by the u.s. government, fannie and freddie which are basically nationalized companies. for those u.s.-backed mortgages, why do not convert it from what ever prevailing rate the homeowners had, say 7%, to 4%? that would greatly reduce the risk of default. furthermore, these homeowners who have been responsible are now getting a reward for having been responsible and are not able to refinance like everyone else in the market. stoper, just because of the underwater situation have been prevented -- so far, they have been prevented. host: juanita, detroit. republican line. caller: mr. yun, you covered what i was going to talk about, but i have a backup question. you covered all the collateral job of building that new construction stimulates. i get kind of irritated at this shovel-ready infrastructure approach to jobs stimulus when the housing market is just the back on. it creates so much activity in so many areas, and i really appreciate you covering that. my back up question is i have been trying to

losing their jobs and incomes are falling and underwater homes are worth less than the mortgage. they can't afford a flat tax and pay like the rich. >> flat tax. a lot of people don't know what is in it. it is 100,000 pages, isn't it time for a flat tax to make things more certain as far as the taxes are concerned. >> steve is right it is past time to get a flat tax in the country and would help the middle class. they tend to get roped in a complicated system that even i.r.s. workers tell me they don't like the current tax system because it invites tax evasion . the middle class gets dinged with all sorts of complexity. when you see the former communist states in the eastern europe adopting a flat tax and we are left with a code that turns intires in america's museum of confusion. if the former soviet soviet states get it why not us. even iran has a flat tax. >> the markets in 2011 were flat. we end 2011 where we ended 2010 and part it confusion and uncertainty about taxings. >> i don't disagree with a dire overhaul of the tax code. but what wars me. 18.5 gdp federal tax revenue

step up an inch back more mortgages. and we're just having down the same path that the took us off the cliff the first time so then my question for you is argue saying that the reason why the jaycees haven't been wound down and the reason why we're perpetuating this propping up of housing that the government you and your view can't afford is because a special interest and the lobbying in washington because of members of congress care more about what the national association of realtors the national association of home builders say it than they do about the interests of taxpayers and country and it's not just that special interest it's just every other special interest out there as well taxpayers take a seat on air everything in washington and that's republicans and democrats alike and then just quickly mr haven because you are the budget analyst and expert we keep hearing about these government shutdowns and the threat of them that congress you know barely averting them each time my question to you is you know what comes

brokers and mortgage lenders, mortgage servicers, student loan providers and i think if you look atat the consumer bureau has done to date, you see that kind of overwhelming importance of their effort. they are trying to make clear mortgage disclosure, clear credit card disclosure, clearer disclosure for students who take out loans, trying to help servicemembers and seniors make sure that they get the information they need in the clear form so that they can make essential choices about what consumer products they want to purchase or not and what kinds of variations of those products. we know the absence of all that disclosure was an important element of what caused the financial crisis in 2008 and 2009, and so from our perspective we are talking about very common sense, very tangible protections for everyday americans of all sorts with respect to some of the most important financial judgments they will have to make. >> isn't it true for example community banks and credit unions will be at a disadvantage because they will have to live under the regulations but non-bank institutions o

tonight, mortgage bosses. millionaire executives accused of fraud, sparking the housing meltdown, targeted in a huge federal lawsuit tonight. >>> eyewitness. for the first time, the key witness in the penn state sex abuse case tells what he saw and why he says he didn't go to police, raising the question, what would you have done? >>> secret life. the multimillion dollar football star, the devout christian, the family man, accused today of a double life as a drug lord? >>> million moms. all of you powering up the simple solutions that save lives. a mother, a baby, safe tonight because of something that costs less than a postage stamp. >>> and our hometown heroes. as the war in iraq ends after eight years. we track down private jessica lynch to tell you about something big in her life tonight and send a message to all who served. >>> good evening. how often we have heard the question, will any financial titans ever have to answer for fueling the economic crisis that overwhelmed so many main street americans? 3.

walsh pointed out and qualified mortgage which was a term used to di fine a mortgage that meets ability to pay standard. get a read of the wider loans. mr. wolin, under the section for the qualified mortgage, ability to pay standards, series of requirements are laid out and those requirements include the mortgage being fully amortized, not being negative amortizing, being verified in, and so forth. and meeting the ratios and regulation or statute or death to income. it has been underwritten and ability to pay two terms are used in this section one of which refers to a presumption and the other to safe harbor. technically those are two different thing that you produced two different rules based on which direction the rules will go. two different draft rules. do you have a sense which way you are going to go on this? >> i don't. has yet to be determined, the q r m-q m have different services also an interplay relating to one another is also is something that needs to be worked through. in the end, by regulators. we will offer our views in the case of the q m will we have a coordinating fu

they're accused of misleading inventors of the subprime mortgage loans. the director in scc's division of enforcement joins us to explain what this is about. thank you very much for joining us. >> happy to be here, shawn. >> we know many people blame fannie mae and freddie mac for the current mortgage crisis. spain what the scc believe they did wrong? >> we filed actions against six former officers and directors of 15 may and freddie mac. our complaint alleges that each of them, including the former ceos of fannie mae and freddie mac caused their companies to mislead the public regarding their holdings in subprime mortgage securities. in addition, subprime mortgages, as well as for fannie mae in -- [ indiscernible ] motor gaps. >> for years, they were calling to shut fannie and freddie down. what do you expect to gape from this lawsuit? do you want them shut down? >> that is not the aim of the lawsuit. the lawsuit is focus on the conduct of the executives regarding the disclosures of their subprime mortgages. from the time period from late 2006-tate taand

so the bank cannot produce your mortgage in court.f they can't produce the mortgage, if you've got a decent judge, the judge will say how can we evict them if you can't even prove you the bank actually own the home because of course the bank doesn't own the home any more. so this movement right now, occupy our homes is going to do that. but nobody's asking for a free ride here. nobody want the free lunch for people -- >> but -- a free lunch. >> what's the biggest problem we've got right now, one in five homes is under water, one in five mortgages is under water. in other words, as you know, the home is no longer worth what they bought it for, yet they've got to pay what it used to be worth. there's no other business like that. cnn doesn't have to pay you what you used to be worth when you were make gazillions in britain. they pay you for what you're worth now and how your ratings go will determine your next contract, right? it's not based on what you did before. people have a home. they bought a home four or five years ago that was wo

and whether these mortgages would bear the characteristics different from other types of mortgages and enhance a different sampling strategy. this was raised, it was something mr. haldeman was aware when the settlement was done at something i was aware of and was factored into the settlement, so we identified that issue to find a potential cost or risk to it and was factored in to the settlement. since then this has received a tremendous amount of scrutiny by the inspector general by our own team and i will tell you that 11 months later, almost 12 months later now after all the scrutiny this transaction was put in front of me with everything i've been able to learn subsequently, i would sign off on the settlement again today if it were not a billion dollars of taxpayer money left on the table this was a commercially reasonable settlement that was done. the issue that was raised by our own examiner was a legitimate issue. we continue to look into it and we believe the judgment was appropriately assigned in making the settlement and i think that while it is a legitimate issue we've gone

that included, for example, offering a lot of seniors in particular, reverse mortgages.hat perspective. fast forward to now, we are looking at scam artists, predators who are trying to help people foreclose their home, charging them money when they are doing nothing help them. >> california attorney general kamala harris, thank you very much for joining us tonight. >> thank you. >>>.cog up, fascinating video from a psychiatric session years ago when one of the republican front-runners for the presidency perfectly self-diagnosed his own severe mental illness. that's in the rewrite. >>> and later, the voter i.d. movement sweeping the country is being called the biggest threat to voter rights since the jim crow laws. we will show you one woman's struggle to meet the new requirements in south carolina so she can vote. the droid razr by motorola. the first droid that becomes self-aware. it remembers what you do and does it faster. create shortcuts like automatically syncing while you sleep. instinctively shape-shifting from a music stream for your workout to newsfeed during b

so in 2009, tim riley stopped paying his mortgage.hat's followed has been a two- year battle with bank bureaucracy that the rileys chronicled in this thick binder. >> october, barbara signed to steve, steve passed it to nancy and nancy passed it off to serin. >> reporter: a year went by with no progress. the rileys moved out of the property. >> i contacted the bank, sent them a registered letter, told them where i was, gave my phone number and e-mail address, told them i closed up the property. >> reporter: but they didn't hear a word. another year passed. the rileys moved back home. the bank wanted to tack on late fees and past penalties, which would have increased their mortgage $60,000. >> we just had a stalemate. it was a no-win. they couldn't win; i couldn't win. >> reporter: finally, after two years without a mortgage payment, bank of america gave the rileys permission to sell their house for less than what's owed to the bank. and another twist: it's offered the couple up to $20,000 to seal the deal. >> it's kind of beyond a cra

, private mortgage guarantors and the rest of the private sector by doing so. so i have a lot of concerns, the tracker up-to-date, and also where we're going with this. and i yield back. >> mr. ackerman for two minutes. >> thank you, mr. chairman. thank the ranking member for the hearing. mr. secretary, nt we're all proud of the. thank you for the great job you're doing. it's a very difficult circumstances. i don't think the sky is falling. unlike some of my colleagues, i think you should be congratulated, not criticize, for the fact your market share is expanding, or some people have said exploding. your agency has been vying for that purpose, to be countercyclical. to pick up the slack when the are no other lenders. that is your job and that is your role, and you are doing it and you're doing it quite well. despite the fact, or point out the highlight of the fact is that the quality of your borrowers has increased, as the audit shows for the first time. over 700 on the fico score. that's a very good side and a very positive sign and during very troubling time

the collapse in the us a prime mortgage crisis which triggered the two thousand and eight meltdown has led some to interpret its tough stance on the eurozone as an attempt to offset would some have called illini an attitude and some politicians have even welcomed the agency's levee district the truth is that europe needs to reorganize and to get rid of its debts that's a fact it's a good one the agency is saying is that in order to attract investors europe needs and the eurozone. a rigorous structured efficient framework capable of meeting its long term and mid-term commitments from all meanwhile pressure on the e.u. leaders has been for their compound and by moody's warning on monday saying it will give you all e.u. credit ratings if the member states cannot deliver decisive policy measures to fix the eurozone crisis matia charney for cross-talk r t. ok first i'd like to go to richard in washington richard you are like in the rating agencies to a racket and you've written they act like a drunken sheriff uses his badge in a speedy western to bully intimidate and cajole themselves into

rates are already historically low, yet there is very little demand for mortgages. so we don't think more that another round of asset purchases will actually have any macro impact on the backdrop. >> reporter: i.h.s. global insight's nigel gault is also pessimistic buying up mortgage securities will give much of a boost to the economy. >> i'm not expecting that. if they do that, it would actually have a very big impact on the economy. i think the fed is really operating at the margins now. it's used all its main ammunition, so i think regardless of what the fed does, it can't make a big impact on the outlook for the u.s. next year. >> reporter: so the fed goes into 2012 hoping for a better economy, but knowing there are more risks ahead than easy fixes. darren gersh, "nightly business report," washington. >> tom: it was in august of this year when the federal reserve first pledged to keep interest rates at what it calls an exceptionally low level until at least the middle of 2013. that makes borrowing money cheap, but it stinks if you have cash sitting on the sideli

only one in 10 have managed to get mortgages permanently modified. the crisis is far from over. reality track estimates lenders put off foreclosing on 800,000 homes in california until next year, more may be coming. >> occupy camp at civic center park in downtown berkeley has been growing and causing concern at a nearby high school. it's across the street from berkeley high school. abc 7 is interest and joins with us the story. >> the encampment has been here since october 23. and berkeley high is right next to this park. so, yes there is concern. that is why the school is in contact with berkeley police, who, by the way monitor the park every day. berkeley high is an open campus. at lunchtime, the students are free to roam. civic park has been a favorite location until the occupy movement took over. >> used to have lunch at that park. now, we can't. but i'm part of the 99%. >> doesn't seem like it's accomplishing that much. it is mostly people who are homeless. >> they have been here nearly two months. the encampment expanded. psacual suderi is the principal of the high school.

dollars to clean up a lending mess created by countrywide financial, one one of the nation's biggest mortgage lenders. >> susie: meanwhile, we're learning the housing bust was worse than thought as a key trade group says its sales count was off by about a million homes. it's "nightly business report" for wednesday, december 21. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: captioning sponsored by wpbt >> tom: good evening, and thanks for joining us. susie gharib is off this week. i'm joined by suzanne pratt. suzanne, four years after the housing market went bust there was a big settlement today over discriminatory mortgage lending practices. >> suzanne: tom, bank of america will pay $335 million to settle allegations its countrywide unit discriminated against minority borrowers during the housing boom. it involves black and hispanic customers who were sold higher cost loans than other homeowners. >> tom: in announcing the deal, the government calls it the largest residential fair-lending settlement in history. darren gersh p

countries son of course are of course not always right and they got the subprime mortgages the united states spectacularly wrong but the part of the matter is that when the european political leaders complain about the rating agencies all they're really doing is shooting the messenger standard and poor's much criticized theory to foresee the collapse in the us a prime mortgage crisis which triggered the two thousand and eight meltdown has led some to interpret its tough stance on the eurozone as an attempt to offset would some have called illini an attitude and some politicians have even welcomed the agency's levee district the truth is that europe needs to reorganize and to get rid of its debt that's a fact it's a good one the agency is saying is that in order to attract investors europe needs and the eurozone. a rigorous structured efficient framework capable of meeting its long term and mid-term commitments. meanwhile the pressure on the e.u. leaders has been for their compound and by moody's warning on monday saying it will give you all e.u. credit ratings if the member states can