they point to the fha's very high delinquency rate. it is falling but at the end of june it was 8.22%. seriously delinquent. compare that to 5.88% delinquency rate for all loans. >> it's the one institution that made it through the entire crisis without yet having to take any draw and perhaps may ultimately work its way out of this without having been a failed entity. >> reporter: dave stevens, now ceo of the mortgage bankers association, led the fha during the worst of the housing crisis and says there will always be a role for government mortgage insurer pipts the entryway for first-time buyers. >> i think it's going to be very difficult to have availability of capital on a large scale for the low down payment market that is safe and sustainable on a go forward basis without having the government play a role. >> reporter: while the fha has not needed a bailout yet, it still could. as the rest of the mortgage market deals with new regulations, making mortgages more expensive, the fha could, in fact, start to grow yet again. for more, o

don't blame senior citizens. >> it is the factory try to bail everybody out but also the fha commissioner the accounting glitch we really didn't want that they make us take it. as of august there are 47 billion net capital position. they are in deep, deep, deep trouble is not just the seniors. levi. gerri: she was referencing the reverse mortgages that is not the whole cuttlefish. any way to say no thanks? we're done? >>. >> bill put reverse -- don't put refers programs but everybody said help out the seniors. they make this over and over gerri: it is unbelievable we cannot get a right. figure for coming. we appreciate your help. what do you think? is it time to base and the bailout? we will show the results at the end of the show. when we come back wait until you see what we cooked up. the food was so good also and heir who thought she was swindled out of her millions. you will want to hear that. thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind.

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nearly 2 billion every taxpayer dollars go into the fha. ell you all about it next. ♪ thirty-seven october 1st not all the d-day for the exchanges also the government shuts down. the present uses the bully pulpit to tell republicans to use stops grandstanding and pass a budget a and richard edson has the details symmachus of the past a bill funding the government until the bubble 15 then they skip town until monday vague -- the house is working over the weekend so they can pass the senate bill or change the proposal and send it back the republic the bill and it is solidly for a few weeks but they say will likely change in republicans better not attach any health care provisions to the next bill. >> if republicans have specific ideas how to genuinely improve the law rather than cut it or delay it or repeal it, i am happy to work with them on that. through the normal democratic process. but that will that happen under the threat of a shutdown. >> to reaction from republicans? no way. the speaker respects -- spokesperson says the fundamental fa

still 27% of the mortgages are underwritten by the fha. one is going to talk badly about getting mortgages to struggling soldiers, but at the same time to your point not everybody can afford a house. are you doing these people a favor if you're making them stretch to the last dime? gerri: we learne learn what thes of that are. here's what you said to the producer. where turning down people mortgage professionals believe reserve mortgages turned down the credit is on the ability to repay while others have no business attending mortgages are getting them. it is not just people who should not be getting them are getting them, it is people who want to have them and are willing to pay cannot get them. i get a lot of e-mails of people who want to buy a second home, i want to buy a first home, and i can't because the standards are so strict. do you think the rules are too tight on that? too tight on the other? >> the government bailed out housing insurer, he was saying we want zero defects on 200 different things which run the gamut from your inc

they will add up and they only the fha but fannie and freddie again. as the economies turned south and interest rates rise, the temporary improvement in the budget deficit will turn around and we are going to look at annual budget deficits north of $1 trillion treat we could be looking at deficits on the order of one point five dollars trillion -- 1.5 trillion dollars to two -- $2 trillion. >> there's an opportunity for investors to make a lot of money whenever that happens with a market downturn. do you see any personal gain or -- in letting the markets tumble as a result of a debt limit rake through? >> they are not going to unfortunately -- they will raise the debt ceiling. this is all theater. this is political theater. the politicians want to get the american public to believe that the worst thing that can happen is that the government stop are owing and stop spending. they're going to create a phony crisis and they will save us from it. the borrowing and the continuous raising of the debt ceiling. why don't these politicians just put up a bill to

it's the first time in the fha's 79-year history it has needed help and it's nearly twice what the administrations year. in a letter to members of congress, fha commissioner carol galants said this amount is higher than the estimate because of a decline in fha endorsement volume. fha has been getting less business due to higher mortgage rates and higher premiums and fees it's charging. the draw based on tricky accounting that requires the fha to predict how much it will need over the next 30 years to cover losses that prediction was made last december. galants says improvements already this year including fewer defaults and foreclosures would have made the draw unnecessary regardless it does need the cash to pay claims it -- it doesn't need it to pay claims. it has over $30 billion in reserves. >> interesting. >> thank you very much. >> what do the rich really want in a new home? our wealth editor knows and i'm waiting to be surprised. >> the suspense killing you. >> location still important when it comes to choosing a home. inside their house, their tastes are changing. a new study from caldwell

the fha was still continue to approve loan modification for those borrowers facing foreclosure. stocks indicating a down start on wall street. the dow looks like we will open more than 100 points lower. kohl's is offering items from a --nch designer ranging from much cheaper than what you would saks.thaat at the new york stock exchange, i'm jane king, bloomberg news, for wbal-tv 11 news. back to you. >> thank you. submit is expected to recommendations regarding the use of electronic devices during flights. allowing patients to play music and games and watch movies during takeoff and landings. some devices would need to be on airplane mode. most changes would require more work and study by the fha so they might not happen anytime soon. >> we are off to a quiet start on this monday. temperatures in the upper 40's and the low 50's. 52 at martin state airport. may be a light jacket or sweater for the kids this morning. we will put a 20% chance for a sprinkle. a mix of clouds and sun. it will be mild with a high near 76. the seven-day forecast in a moment. >> good morning to you. a bu

the fha gave credit to the borrowers and now they pay the price. i'd like the last round don't expect a bad month dash a big battle in congress the law automatically access the funds. more still to come including information every worker needs to hear how to negotiate your salary. a startling look at the nation's education system why most students are not prepared for college. stay with us. ♪ [ male announcer ] now, taking care of things at home is just a tap away. ♪ introducing at&t digital life... ♪ ...personalized home security and automation... [ lock clicks ] ...that lets you be cloto home. that's so cool. [ male announcer ] get $100 in instant savings when you order digital life smart security. limited availability in select markets. ♪ gerri: forget not paying for it nearly half of the juniors and seniors are not prepared. to gauge whether a student will be successful in the first year experts say they should score 1550 on the s.a.t. but only 43 percent actually score that high. 20 me now from the cato institute center for international freed

instead, the fha is merrily on its way to becoming the recipient of the next great taxpayer bailout.ley. tracy: holy, all because of an accounting entry? come on now. they have to come up with a better excuse than that, peter barnes. >> you're the accountant. tracy: and i don't believe it. ashley: i love that response. like nothing to see here folks. move right along. don't worry about it. >> debits and credits. we'll be find. >> thank you, peter. >> all right. ashley: the senate just taking action but there is still only three days and change until a possible government shut down. "wall street journal's" steve moore will tell us whether anything can stop it. that's next. >> plus there's about 40 states pushing the fda to regulate electronic cigarettes the same way it governs big tobacco. we have one e-cigarette ceo. njoy's craig weiss. he will share the reaction to all that ahead. >>> but first we have to check out how oil is trading as we head out to the break. basically flat. $102.59 a barrel. the dow has fallen off a little bit, down1 points. we'll be right back. younow throughou

the price. most of fha's losses, $70 billion were originated 2007 to 2009. shows that's not enough. in the letter fha officials say this required mandatory appropriation is an accounting transfer and does not reflect an up-to-date view of the mmif, that's the mortgage insurance fund's performance. its long-term fiscal health or it's current cash position. this is based on estimates that fund would need. it's not taking into account the parts of the current fha that have improved, higher home prices, higher premiums in the fha and far fewer delinquencies. on the flip side the fha is making a lot fewer loans and that means it's making less money. its accounting thing but $1.7 billion from the treasury, this is the fha's first time it's asked for a bailout like that. >> up next on the program, the results are in. find out if that crash avoidance feature in your new car can actually prevent rear end collisions like these. we have all the details. and later amc networks gaining more than 30% so far this year but now that its show "breaking bad" is coming to an en

the first time in history, the fha is getting a bailout to the tune of $2 billion.ing up with his take. tracy: let's take a look at how the 10- and 30-year treasuries are trading. unchanged 2.62%. your 10-year unchanged, your 30-year also unchanged, 3.69%. dow down 92 points. we will be right back. >> i am lori rothman with your fox business brief. american airlines seeking to hire 1500 new pilots over the next five years and recall the remaining for load staff. marking the largest pilots hiring in more than a decade. the doj is opposing the planned merger with u.s. airways citing concerns. macy's will hire 83,000 seasonal workers. and yale university announced a record $250 million gift from an alumnus. from 1954 graduate charles b johnson. he retired as the chairman of resources. it will help fund to new colleges and allowing schools to admit 15% more students each year. at his latest from the fox business network giving you the power to prosper. tracy: latest government bailout starts today and i does not even need rational approval to use your tax dollars. how a

that's a change from the fha on the mortgage front. social security checks, mandatory.edicare, medicaid mandatory. food stamps and job benefits same thing. postal service will be open. a lot of day to day things will still happen. the social security checks, a lot of people have been saying until main street feels it, they'll dismiss the thee at risks in washington as just that. by the time main street feels it, it could be when we're talking about not paying our bills come october 17th or later. that's when you wouldn't see that those checks in the mail for, say, social security or jobless benefits. . that would be a real problem. meantime, in terms of shutdown, of course, you still have to pay your taxes, wolf. and members of congress as we have pointed out over and over again, members of congress will still be paid. no question. >> they're essential government employees. that's why they'll get paid. thanks very much for that. for a full list of what would be open, what would be closed, you can check out our interactive page @cnn.com/interactive. we're standing by. th

the deal done. >> thank you, congressman. appreciate it. >>> home buyers who have applied for fha-backed loans will have to put the plans on holdernment shutdown. christine romans is in new york with more on that. >> yes, that is right, carol. these are fha-backed loans and if you haven't had that endorsement yet from the fha, you have to wait until after the shutdown is over. let me tell you exactly what we are talking about, fha-backed loans which are 45% of all mortgages last year and comes out to 60,000 a month, and so perhaps some 60,000 deals that could fall through, and the shutdown affects this agency when you look at the hud, the housing of urban development, which is the, you know, the i guess the parent agency for fha loans will have 8,900 of the workers sent home, carol. sent home. and only 350 will stay there. and less than 4% of the staff so it is a skeleton staff, and they will no longer be able to do these loans as a result of a shutdown. but fannie mae and freddie mac guarantee the vast ma jjority o the home loans are funded by fees, and that will keep going. so when you look at the folks watching the real esta

the hook? >> melissa, that is a much bigger question. if we look at fhageneral and take a step back why are we funding it? the reality without the fla in the secondary mortgage market the loans wouldn't be written t would slow down the economy. when we look at a lot of growth in the economy. it is coming from housing. >> so what? what if it slows down the economy? this bubble you blew up the economy. a slower economy that doesn't explode into sleds because of people taking -- shreds taking huge risks on houses would be better, no? >> i totally agree. we want to be mineful we don't take small steps into the craziness of subprime lending. tough verify income. you have to verify something. when we went back 10 years we were verifying nothing. could you buy a home with a signature with no money down. we're not necessarily going there. i totally agree we need to be mindful and cavecareful but we still have standards here. melissa: ed, sounds like, go ahead. >> one out of eight failures at fha had over 37 years, everyone of those loans was verified. i mean that

the shutdown will trickle down to the fha or the federal housing administration and your mortgage could end up in a pile in offices if congress can't agree to a deal by midnight. one bright spot, they will still continue to approve loan modifications to those facing foreclosure. kohl's has designer clothing line from jennifer lopez and vera wang and kathy meladrino. and that is business news live at bloomberg headquarters in new york, linda bell, reporting for abc7 news, back to you. >> thank you very much, linda. 6:00 now, we've got another hour of news and it all starts right now. >> if they were to lose their paychecks like everybody else would lose their paycheck that might motivate them to resolve it. >> we're hours away from a possible government shutdown and lawmakers do not appear to be moving any closer to a compromise. >> plus why a top ranking navy official has been suspended. >> and despite a cooler morning, a stream of beautiful days of weather is continuing this morning. "good morning, washington," happy monday, i'm jummy olabanji. >> and i'm scott thuman. again -- we want

even the fha program which usually is an opportunity for people, first-time home buyers, that programas more got more expensive because of the new insurance requirements. in some cases the last link of the loan. so it is going to be really challenging the first part of the year. some of the price constraints. gerri: and here is the irony. the proportion of mortgages purchased by government agencies , 90%. so the federal government has not really roll back their involvement in the market at all. we are back to where we were. governments calling the shots. i don't know about you, but i do not trust them to run this market. >> well, the other way of looking at it is that they have pulled out of the market right now there would be nine. so this has to be an orderly retreat. some people would make the argument that the reason we are seeing fannie and freddie drop their loan limits is specifically to encourage other lenders to get into the market and reduce that government footprints. but whenever the government does in terms of friday, fannie, fha, jenny made, they have to do it awfully, c

buif the fha stops writing the 25 to 30% of all the housing loans, we you have a serious problem.hink it is that likely that will go on for such a long period of time, but there is an element of confidence and we have seen during the last cycle what happens to the overall economy on the real estate market is hard. neil: i got to see it myself. it is desert is going past each other on this issue. are capable of this? >> there is an issue of consumer confidence that will affect consumer reaction. >> what can i say, if you get the sound bite, you get a headline, but there's no substance behind it and it creates a problem and everyone is looking to one line of data. and i think if you asked about the details, you probably have a better understanding who have basically dunkerque politicians committed never created a job, they've never done anything outside of this. neil: if we look at a shutdown next weekend, there is certainly not enough time to avoid one outright. but if it drug on for a few weeks? >> if people stop being able to qualify for loans, it creates a longer-term problem. i

the mortgage interest rate reduction, the fha, the program, va, all of the different -- have tended to promote homeownership. barney said you can have too much of a good thing. homeownership went up. all of the models didn't see a big drop in residential mortgages. if you were an investor and owned a mortgage, the biggest risk was not historically you wouldn't get your money back, you would get it back too soon. and then you what disappointed me in terms of dodd frank and the way that was watered down was that the regulators allowed this -- the exception if a mortgage was a qualified mortgage. and the new consumer finance protection bureau originally had regulations that said the buyer had to be able to afford the home and put 20% down. okay? there's huge resistance. so affordability is important. but flexibility to pay, but willingness to pay is very important. and the only way you get to willingness to pay is the 20% down. even on that, it bowed to the political pressure. >> -- >> no. he was in joint pressure. i don't think it has to be a 20% down. there are other ways. >> something

gerri: last week we told you about the fha is seeking 1. 7 billion from the treasury to cover losseshe reverse mortgage did here with details, a jordan welcome back. but people don't know with these reverse mortgages are a and it is exactly as it sounds. >> you have to be 62 years or older and you are tapping your home equity with a mortgage they you get the money as a credit line or as of lump-sum and if you pay the loan back the draft pavements and do get the money now but with the refers payment it pays as you go. gerri: instead debate pays you. it is highly controversial levy we seniors were taking its bid to jeff but there are new rules that people need to know about. >> starting today the new rules. the borrowers will undergo a credit check. gerri: how did it be possible they did not have a credit check? >> they thought they could take it so that you need to be sure you can pay your property taxes also to borrow 15% less fees and in the past and only 60% of the credit lines see you could get less money they want you to have some equity over not going to the atlantic city. >> a

never forget the fha, federal housing administration, which has been writing a huge amount of mortgagen up in this market. genworth is moving aggressively. the company recently sold off

the fha was really a savior of the housing market but obviously it came at a price. short term cost. >> well, we have seen history of intervention in the housing market before. we will keep an eye on that one this time around. appreciate it. >> that does it for closing bell. kelly, always a pleasure to have you with us. >> and fast money begins right now. >> live from the nasdaq market site, i'm melissa lee. here is tonight's line up. hedge fund big wig joins us with stock picks globally. multibillion dollar listing, the exchange war is on for twitter's ipo. and a stock that has more than doubled this year, we're talking to the ceo of web md. our traders are tonight are steven, guy, and pete. resisting the rally.

never forget the fha, federal housing administration, which has been writing a huge amount of mortgagesurance, is getting out of that game, leaving genworth and radian to clean up in this market. genworth is moving aggressively. the company recently sold off its wealth management unit, plans to spin off its australian division. it's just a really good situation. i would recommend buying it into this weakness so can you run circles around all the money managers who i believe will be buying it aggressively from now to the end of the year. and lastly there's assurant, aic. property casualty insurance. it's a very forward thinking company, getting into all sorts of neat markets. assurant bought lifestyle group. it's a british mortgage provider. assurant has a solid track record of successfully developing new specialty insurance markets. this group is really red hot. buy them tomorrow. going into this year, money managers will be searching for stocks to anoint. they're going to search for the winners. and i want to you get there first, which is why i'm going through the year's best performi

i think you're fine, because in the end there is a change in the mortgage insurance business and the fhat and i think you should hold on to the trading tock and will hold in the judicial environment and i think you can see their 15, $15 and the bad loans are going to go and the generate long are growth wrote. i think the shortfalls, this is where they'll be concentrating. don't move. lightning round is next. >>> tomorrow, kick off the trading day with "squawk on the street," live from post nine at the nyse. ♪ nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. he sure it's hard to believe he was ever sick. he does. but the bills, they just keep coming. you remember the life insurance you bought years ago. it has living benefits that you could us

i was there when they did it. >> so what are the odds fha could escape unscathed? s zero. they've frantically tried raising insurance premiums, that hasn't helped. well, it's helped, but that shows you what deep trouble they're in. adam: so if they're in trouble and we see the hedge funds are going to start selling off some of the properties, what's going to happen to people that want to sell their homes and buy homes? fha's in trouble, so first-time home buyers are going to have more trouble getting a mortgage? what does the future hold? >> well, that's why i've never been overly optimistic about this big housing revival. it was an investor revival, not a traditional household revival. this could actually put really downward -- and if investors are pulling out, the problem is there's no back fill. mortgage purchase applications are still stuck at 1996 levels. we're just not seeing the recovery from the consumer side. adam: all right. and we appreciate your being with us. there's so much more to discuss because housing effects all of us in so many ways. whether you

thinking about getting a loan for a housedozens have been killed and the entire process was stop the fhaiscal year. money began towards hiring police and also social-service programs. all of those things are going to be running dry. >> do you think that this has a high possibility? >> i would think so. and i think that it is probably 75%. >> let us talk about the president obama care. we got a question from even anderson. he is a founder of a small start up company and he is wondering what type of impact it will have on small businesses. will he have to raise his race? it also >> guest: one of the reasons why the republican party is so bent on trying to kill the president obama gear is that it is addressing the issues that your friend brought up. first of all, how many employees does he have? if he has 50 employees or more? >> is the cut >> guest: off 20 employees guest even if it is 20. it is assuming that obama care is not defunded in the mid october. that is where he can look to find better prices, better deals, better competition for security and insurance for his employees. that is

whether it's the fha, whether it's the government sponsored enterprises, whether they make money, needdifficult to make significant changes to a car's engine and transmission or differential when it can't be taken out of service. it's on the road, driving it, 50, 60, 70 miles an hour. but all these short-term issues we haven't learned from history. we need to figure out a way whether profitable or unprofitable to make the mortgage arenato stand more on its own. taxpayers shouldn't get involved and fha doesn't need to go to congress. one more thing, real quickly, simon hobbs mentioned and it coordinated with many traders on the floor, that jamie diamond and some of the regulatory issues of j.p. morgan chase, maybe there is an aspect to this. he was pretty flippant, tempest in a teapot. the conversations i have, it's up to you. you you know, do we want a government that may or may not give you a hard time because you march to a different drummer? i think this is an important issue. especially when $125 billion was force fed on them. something to think about. there will be more ""squawk"

the fha pulled the plug. i know he tried hard to do that.y comment was a lot of my conservative friends said let them go bankrupt. you shouldn't have done bear stearns. lit fall. lehman was allowed to fall. and, of course, the consequences were so terrible. we came to the consensus we couldn't let it happen again. then it was national free market day. >> the other thing which barney allowed me to tell the story in the prologue that's just come out with the reissue of "on the brink" was that wasn't too long after lehman went down -- excuse me, that bear stearns went down that the markets and, again, bear stearns, bear stearns had only been saved because the buyer in the form of j.p. morgan emerged. and we had to have a definitive system. but we learned that the time we didn't have the necessary authorities to save a failing investment without a buyer. so ben bernanke and i went and talked with barney. we explained he didn't have the emergency powers he had for emergency banks. we didn't have them for investment banks to wind them down and kee

but then you saw the obama administration yesterday or the day before unveil a new plan and having the fha and a half percent down payment try to make it easier for people who defaulted on their mortgage to get a new one on a new on sale. >> this is dangerous because it is a repeat of what we saw post financial crisis -- pre financial crisis, i should say. there is another risk, regulators are trying to tell the arab people, don't worry, we can regulate risk out of the market. we will keep you safe and sued the big bad banks. the truth is, the best protection against bad practices in the market is bankruptcy. what we saw at the end of the bush administration and throughout the obama administration is completely the opposite. government taking over these industries, hundreds of regulators into the banks in telling the public, don't worry. it will be fine. there is a lot of trouble there. ashley: a headline move today. getting out entirely of the college loan program because the obama administration takeover of the loan market, $407 billion in four years has pushed the bank out. >> the obama

the oxygen masks (. >> housing fire today in oakland helped many learn about their options. people who are behind on their payments came together. they have good news. >> people who have lost their properties can buy under fha guidelines. the. >> the housing fair was also for first time home buyers. >>> alameda county officials are warning tonight that young people, foster youth, are prime target for identity theft. >> you think about it ha losing their identity. they use mobile apps and that's becoming a common way in which they can find they've lost their identity. >> keith carson says the county is working with youth to prevent the theft. they may not know their information is shared (. >> bay area activist dislike the noplace of a new bill. legislature passed the bill for illegal immigrants to get a license. some say this will sigma advertise immigrants. >> especially if you don't have id or form of permanent residences. >> we're going to continue organizing to make sure we take off the mark. >> the license will say it's identification for driving only. >>> a southern california school district is hiring a company to monitor student's social media posts. the company will collect information from faceboo

the interest rate-- it was an fha loan o5 1/4%. we're fortunate that inflation really hasn't bothereds. there were other winners. this wave of inflation coincidedwith t credim of the late sixties. consumers wereedtouy on cret y now before prices go up. pay later with cheaper dollars. consumers were spending money. increased demand was creating jobs. so businesses would seem to be winning, t many soon had second thoughts. business does not fare well overall during inflation. at the initial stages, some businesses think they are better off because profits seem to rise. you have a situation where your inventory cost is low. you purchased goods previously. inflation comes along and you raise prices. suddenly,costs gin to. you get a bigger profi you have this uncertainty. suddenly, most businesses are worse off. you that often leads usty. to recessions. among those clearly worse off were senior citizens. mostly they lived on fixed incomes. they had no extra money. how could they meet raises in rents, heating, or food? it seemed that when

that is political pressure to get the housing market going and keep it going. >> fha could change anythingers have the overlay, they have a final message. certain lenders i talked to after these guidelines said they will probably fold because they want to lend money again. the bottom line is where is it as it relates to the employment and the people had to meet the obligation? the sad commentary in all this, everybody still wants the american dream, and people will get themselves into loans again if they have the chance to own again, i will to you people will make the same mistake they made five, six, seven years ago and that is not good for this country. stuart: it is my opinion if we had, the real problem here is jobs. the real problem is income is not there. if we had five or 6% growth in the economy, and this economy was really moving. you and i, all three of us would be talking about another housing boom, would we not? >> i absolutely agree with you. we have look at the markets where there are jobs. it is not about the housing recovery, it is places where there are jobs. look at place

consumer debts, then you still have the two-year, three-year protocol, which means this: if you file bankruptcy on a primary residence was involved, two years after that, fhahat? you go to mortgage lender and ask them about the guidelines and see if they fit within the new fha guidelines to get an insured loan. >> steve: you're suggesting go to somebody who knows what they're talking about. >> absolutely. >> steve: final question from pennsylvania. i am furious at my property management company. i have several rentals and i pay them each a commission from the rent. every time i inspect the house after a tenant leaves, it's always a mess. what can i do? >> this is a problem. a lot of times, steve, your property management companies, there is many good ones in the country. they have too many properties and not enough people to inspect the homes. so that's the first problem. what i always tell people when i represent landlords, i say we're going to put some things in this lease that gives you the right to go in and inspect as well as the management company. for example, if you live in the desert or the better climates, if you will at times, i put a provision

the whole program is based on fha provideing a take-out insurance after they make that second loan. here's nobody that wants to touch this. then you have lawsuits have been filed by the investors. this thing is going to be tied up in knots as doug said, forever the only people that will be hurt are the people that live in richmond. melissa: doug, is it too dramatic to say if this really went through, it kind of undermines the whole mortgage system? >> this is a horrifically bad idea. i think you made an important point that shouldn't go unrepeated which is, there's a particular group of private investors who are going to benefit enormously from this. they're geting a government to aid and abet their profit-making scheme. that is the worst kind of policy, sort of crony capitalism. and especially when it doesn't help homeowners. so we've seen this issue raised in other jurisdictions. thoughtful people said looked at it said, no, we don't want to go there. one hopes they will get another look at this in richmond, no we'll harm people more than help them and it is never a good idea. >> h

the housing boom in 2006, 27%. by 2008 when they were taken over, it was 30 to 40% market share. today 68%. with fha and va loans making up the bulk of the rest, that according to inside mortgage fine nance. federal regulators are trying to wind down fannie and freddie. they have increased their fees they charge lenders and also talk of lowering the loan limits. that hope then is that investors would come back to the market and banks would start lending outside of fannie and freddie. but that will, of course, take a loot of time. plenty more on-line. tyler? >> thank you very much. >>> let's go to dominic for a market flash on an airline that is joining the s&p 500. dominic? >> how about the friendly skies delta in this case here. they're getting a pop in trading up about 7%. late friday, s&p, dow jones end disease will add -- indices will add delaware dell -- delta. here's how some of the other big s&p 500 additions have fared in trading so far this year. on july 1st we found out that info and ratings company nielsen would replace sprint nextel. shares finished up 2% in the next regular trading sess

the office will be closed. no new passports will be issued. no fha loans will be available. social security check and medicare checks will go out on time. and active duty military will stay on the job. there is a chance their paychecks may be delayed. so what does it mean for the average person? will you feel this as a taxpayer? stuart varney is the host of varney and company. stu, what have we got here? >> not much. wake up tomorrow morning. if the federal government is not shut down this will not help the average person. 300 million people will hardly feel it at all. 800,000 people will be furloughed temporarily. the impact on the vast majority of people, virtually nothing as of tomorrow morning if we shut down tonight. march are you you think the big date comes with the debt ceiling issue. >> yes, that is far more important. october 17 we lose the authority to borrow more money. midnight tonight we lost the authority to spend more money. borrowing it is far more important. in advance of that deadline what you are seeing is a tee klein in the stock market this morning. how

the g. i. bill and fha and vha and the federal highway system on eisenhower.all reckless spending by our predecessor at the time. now wasn't the country didn't go to default to disappear from the face of the earth? because of the reckless spending done by the presidents? the g.i. bill of rights. where did the money come from? >> federal government raised tax revenue equal to the spending that was doing. >> well, they raised the tax revenue that did this. they were investing in the people. is that what created "the greatest generation"? >> i think they played some role. i don't know how important they were relative to other factors. >> where did they get the money for the highway system? >> thank you. >> thank you, mr. chairman, director. thank you for joining us again today. >> congressman. >> a couple of comments came from other side we need to correct. [inaudible conversations] >> madam, this is my time. i didn't interrupt you. the other comments have to do -- he said that we have done nothing about the sequester, unfortunately he's incorrect. we have tried