and recently just avoided going under federal receivership. one of the men most responsible for putting the oakland police department in federal decree returned in detroit last year amazed. >> it was totally different. >> reporter: jim chanin is a oakland lawyer. >> we asked detroit mayor bing what advice he had for oakland. >> although you don't want to make the tough cuts and decisions to be made but there is no way around it. >> we believe in constitutional policing. >> reporter: adds a detroit police department's future seems to have taken a turn for the better so has detroit itself. artists have transformed shattered streets into tourist destinations. gutted houses are coming down and leaving wide spaces open to bloom in the spring. and the battered auto industry, the city renewed. the police department with its history of abuse and misconduct are getting better. >> i think the cops are doing a good job as best they can. >> reporter: here in detroit there's the sense that the worse is over and there's better times ahead. perhaps giving th

under receivership, so it may not be a bad idea.ed about 18 months ago to two years ago, and the mayor of detroit, he was doing everything he can. i was very impressed with him as a mayor. the problem they face in detroit is how you managed incredible cost. you're talking about over half of the expenditure cost of cities, just the personnel costs, and they have on top of that the enormous amounts of money. there were saying, i'm paying for this is is that were made ten or 15 of 40 years ago, you know, i mean, that makes it almost impossible to manage. gerri: no economic base. there's just nothing left of the city. is a problem. >> it could come back. it could come back. he had a plan to do it. the problem is, when one-third of your budget is paying for people who are in retirement or not providing city services, not teachers, policemen, not fire fighters, the same thing in california. when i was asking these counties, they said to me you don't understand our problems. we are hiring three -- paying for three police services, to their

institution and likely somebody would be fired, somebody would be find in this dish would find itself in receivershipd it is on its way to becoming the recipient of the next great taxpayer bailout. >> yes, the fha is a little bit of issue at the moment because of the counter supercold mission, was part of the original mission to come in during difficult times. they did that and they're in trouble because of it. peter: critics hope the hearing would lay the groundwork for another shot at legislation to try and reform the fha. just last week the agency took more steps to sure up the finances including raising the premiums yet again, docking other reforms. supporters say the agency has billions of dollars of cash on hand to tide it over in the short run, whatever that is, a few years. in the meantime they hope the higher premiums and the changes will help restore the finances and the housing market recovers writing more mortgages. david: shades of fannie and freddie. exactly the same. liz: peter, thank you very much. david: ratings company s&p is being sued by our government for something that allegedly

likely somebody would be fired, somebody would be fined or the institution would find itself in receivershipad it is merely merrily on its way to becoming the recipient of the next great taxpayer bailout. >> i don't think there are many independent people think we're looking at the next great bailout. yes, the fha is little bit of an issue at the moment because of its countercyclical mission, by the way it was part of a their original mission to come in during the difficult times. they did that and they are in trouble because of it. >> reporter: house republicans got legislation through congress last year to try to reform the fha but it died in the last congress. now they hope this hearing will lay the groundwork for additional legislation this year. jenna? jenna: interesting points made there by both lawmakers on this topic peter. besides looking to taxpayers for potentially this bailout what is the fha doing to prevent that? >> reporter: well it just announced a whole new set of measure last week, to, it is raising premiums it charges for insuring these mortgages by just a little bit. it i

somebody would have been fined, and the interest company probably would have been put into receivershiply, the fha has been about helping those low income and first-time home buyers who otherwise have good credit. it's traditionally been about 10, maybe 15% of the marketplace. today, it's 56% of the marketplace. >> congressman -- >> what we're trying to do, if i could finish this one point, is have a sustainable housing finance policy in america. you can't have new capital come in, as long as you have fha, who's only requiring 3.5% down, allowing 6% buybacks, and allowing people to have these incredibly low fico scores that dangle home ownership in front of them, only to take it away. i just think it's ironic that as we condemn so many people engaged in subprime lending -- >> if we take them out of business or we limit them, what happens to housing prices in this country right now? that's the ultimate -- >> no, it is not -- the ultimate question is how do we have a sustainable housing finance policy and sustainable in two ways? number one that avoids an incredible, dramatic boom/bust cy