>> i do think that if fha is the sole guarantor with va and usda plan a smaller role, but that they are the sole guarantor is particularly in the wake of a crisis, then there is certainly a risk that we take on a much larger footprint in the market then would happen under options two or three. that is something that we consider, and to work collaboratively with the committee to ensure that fha is prepared to take on a larger footprint in a crisis as we've done in this one. there are many issues. systems, around procurement, ensuring we have the ability to operate effectively and efficiency as we stepped up in a crisis, does the things that ought to be an essential part of what we're looking at as we consider reform to the gse's. >> senator shelby. >> secretary donovan, quoting your words, the administration is fully committed to exploring other measures to make sure that secondary market participants are providing capital to all communities. then secretary geithner said, government-supported incentives for housing to distort the markets. on the one in use in the administration is fully

i have heard very directly from fha approved directors that fha's presence along with va and usda is solutely critical to make sure they can continue to be a source of safe and affordable home loans. one of the points that we make in the report, option one would be that we have more concentration in less availability to be able to continue lending. >> let me ask a broader question. as you all are aware, the topic of conversation in the discussion, the point that the congress and the administration is in deals with the fiscal house of the united states. in my view, we are bankrupt or nearly bankrupt and physically. there is a tendency to see this as a typical republican versus democrat, liberal versus conservative. in my view, there are significant consequences to the standard of living, interest rates, and if we continue to have a goal of home ownership, there is a significant consequence to the failure of congress with rising interest rates. i would like your reaction to tell americans, the outcome of the debate in the votes that occured in the house and senate have direct consequenc

>> i do think that if fha is the sole guarantor with va and usda plan a smaller role, but that they are the sole guarantor is particularly in the wake of a crisis, then there is certainly a risk that we take on a much larger footprint in the market then would happen under options two or three. that is something that we consider, and the work clabber delete with the committee to ensure that fha is prepared -- and to work collaborative leave with the committee to ensure that fha is prepared to take on a larger footprint in a crisis as we've done in this one. there are many issues. systems, around procurement, ensuring we have the ability to operate effectively and efficiency as we stepped up in a crisis, does the things that ought to be an essential part of what we're looking at as we consider reform to the gse's. >> senator shelby. >> secretary donovan, quoting your words, the administration is fully committed to exploring other measures to make sure that secondary market participants are providing capital to all communities. then secretary geithner said, government-supported incentives

fha-approved lenders in many communities, particularly rural communities that fha party presents with the va and usda is absolutely critical to make sure that they continue to be a source of home loans in their communities. one of the reports we make is a risk in option one would mean that we have a less ability for community banks and others to be able to continue lending in those communities. >> let me ask a broad question. as you are aware, the topic of conversation, the point that the congress and the administration is in deals with the fiscal house of the united states. in my view, we are bankrupt or near the bankrupt fiscally. i think there is a tendency to see this as a typical liberal- conservative, whenever the labels are, at a philosophical battle going on in washington, d.c. and in my view, there are consequences to every day standard of living interest rates. if we continue to have a goal in this country of having homeownership, i hope you would agree with me that there is a significant consequence to the failure of congress in addressing the fiscal issues we face today with rising intere