. >> mr. lynch, can you wait on that? >> more specifically can you name two state programs that you can eliminate? >> lettme give a note of congratulations to the incumbent. i think most of us were in favor of the flat tax. i was outspoken about this. this was a gift to the wealthy by this administration propounded by people in the legislature. it did not do anything for small businesses. >> if you ask about sales tax, you do not start by taxing people for what they eat and the drugs they try to buy. you get your priorities in order and when i talk about a system that is broken, you can go down a list. one of them is to get your priorities in order with a flat tax. it would have cost us $75 million. >> the system of government we have is fundamentally flawed and broken. we have to change the way -- we have to redo how we approach our government so that we can assist the businesses who are struggling to survive, particularly the small businesses in terms of priorities. we have over emphasized big businesses and have given

mr. lynch: i thank the chairman. i yield back. the speaker pro tempore: the gentleman's time has expired. the gentleman from texas is recognized. mr. sessions: thank you, madam speaker. at this time i would like to yield four minutes to the distinguished gentleman from california, mr. royce. the speaker pro tempore: the gentleman from california is recognized for four minutes. mr. royce: i thank the gentleman for yielding. i rise in opposition to this rule and the underlying legislation. and i rise because reform is desperately needed. but the reforms needed most are not in this bill. for example, this legislation fails to reform the government-sponsored enterprises. when you think about it, the housing crisis and the low down with saw in that sector, most of the losses were in the government-sponsored enterprises, that was not caused by lack of government intervention. each of those failed institutions had a regulator overseeing it. but it was congress, especially with the g.s.e. act, actively tying the hands of those regulators i

mr. lynch? >> thank you, mr. chairman. i want to think the witnesses for their willingness to come and help us. t i have to ask. in my state, we have seen the number of foreclosures double this past month -- the month of may 2010 compared to may009. it has gone up 120%. unlike when this housing crisis first struck, when we saw a lot of some prime mortgages out there and poor proct, and maybe people in homes they could not afford -- now we see the greatest correlation is unemployment, with people not being able to stay in their homes. am wondering if this tool that we initially came up wth, the hamp program, is the right tool to deal with that type of problem. because if somebody is out of work and does not have a stream of income to support a mortgage it does not matter how you design it or how you modify it. if there is no income to support the mortgage is going to end up in foreclosure. i am fearful. i see how this is working out. i see the attempt to are making. i also see that 434,000 people who were kicked out of the

mr. lynch? >> thank you, mr. chairman. i want to think the witnesses for their willingness to come and help us. but i have to ask. in my state, we have seen the number of foreclosures double this past month -- the month of may 2010 compared to may 2009. it has gone up 120%. unlike when this housing crisis first struck, when we saw a lot of some prime mortgages out there and poor product, and maybe people in homes they could not afford -- now we see the unemployment, with people not being able to stay in their homes. i am wondering if this tool that we initially came up with, the hamp program, is the right tool to deal with that type of problem. because if somebody is out of work and does not have a stream of income to support a mortgage it does not matter how you design it or how you modify it. if there is no income to support the mortgage is going to end up in foreclosure. i am fearful. i see how this is working out. i see the attempt to are making. i also see that 434,000 people who were kicked out of the hamp trial prog

mr. lynch? mr. lynch?

i was listening to the testimony and i am somewhat struck by the questioning that was offered by mr. lynch when he asked if he wanted to see the program continue and virtually every one of you said yes. although, my colleagues on the other side of the aisle very much want to see the program does appear. it would be helpful to us if you can -- see the program disappear. it would be helpful to us if you can in the narrative tell us why you think it should continue. mr. losmalowman, i think congren kucinich, said he had difficulties with your particular company. i would like to echo those. i have a number of cases that are truly disturbing that are loans by chase. this couple, retired schoolteacher, retired husband, chase has lost four sets of applications. this is a story we hear over and over again were documentation is sent, documentation is lost.. when a consumer sends it in four times, documentations that they send in four times and you cannot find it, that is your problem. it reminds me of the issue with the mineral mines service. basically, if they did not permit the horizon deep water

i am struck by the questioning offered by mr. lynchhen he asked if you wanted to see the program continued. virtually everyone of you said yes. my colleagues on the other side of the aisle want to see the program disappeared. it would be helpful to us if you can provide to the committee why you think the program should continue. mr. lowman, i think congress man mr. kucinich said he had great difficulty with your current -- which your company. i have a number of cases here that are truly disturbing. they are loans by chase. this couple, a retired school teacher, retired husband. chase has lost four sets of applications. this is a story we hear over and documentation is sent and documentation is lost. when a consumer since it in four times and you cannot find it, that is your problem. it reminds me a little bit of the issue of the mineral mine serve as. basically, if they did not permit the deep verizon rig -- horizon rig within 30 days, it was automatically approved. at some point, the lender had to take responsibility for not having th

. >> mr. lynch, would you care for further questions? >> sure. thank you. since the beginning of the war in iraq and up to the present there's been a trend to to contract out core government services. the argument initially made by the bush administration is this is going to allow us to save money here. there were efficiencies gained here. after all of our experience, i just don't see that. is there cause to revisit that assumption that contracting out, while it does allow us to tap into some expertise that is not available or wasn't available at the time, is there cause here for us to review that decision to contract out government services rather than have, rather than to build inteally our governmentapacity to do this with government employees? >> yeah. i think i woulddivide that into two separate points. first is on the cost. and providing comprehensive costs comparisons between contractors and government personnel carrying out the same function and our gao colleague may be able to say more on this it's proved to be exceedingly difficult for a variety o

lynch deal. it's the ratings memos of tab 22. i would like to enter both of those into the record. mr. kolchinsky ielieve you would have worked on this merrill lynch deal. 488 miion downgrade started in tober, '07. it's now been all downgraded to junk. and the value of the collateral originally488 million is now at 67 million. down 87% from its peak. you know, i loo at that and i think when you go into a sto you get -- you see grade a eggs you assume maybe one of those eggs will be cracked. turns out all 12 were cracked and it was originally rated aaa. i guess my question for you, because you were on this deal -- and be way, you sent an email about this deal which i'd likeo enter into the record to yvonne fu and talked about how this deal was -- you said it was important to have, quote, a, a quote, record of transactions which has egregiously pushed our time limits and analysts. tell me a little bit about this deal and why it went wrong. >> sure. this deal is of actually -- i wouldn't even consider this one of the worst performers but is a standard hidrilled abs o loans. it went wrong j