Housing Bill Breakdown Pt. 1

" to the president's desk today at passes and it's Saturday during a rare weekend session the bill includes a four billion dollar provision to eight communities hit hard by the mortgage crisis. And it will allow the treasury to -- Fannie Mae and Freddie Mac in both investment and lending practices. For a closer look at the house unveiled what it means for American homeowners and taxpayers. We're joined this morning by heat and I think he is the director of the National Economic Council only assistant to President Bush on economic -- at. All of say good morning -- thanks for joining me. Good morning Alexis carrier I'm terrific. So I expected the president or the -- here -- the president. Will sign this into law this morning that in fact the case. Yes he will will sign the bill senate worked over the weekend. So it should be law later on today. -- you know the big issue here -- you and I both know is what line of credit were giving to Fannie Mae and Freddie Mac we have -- nine and a half it right now trillion dollar budget deficit. I understand it happens at ten point six billion. The difference between the 21 point one trillion should be American taxpayer be worried about that. Well."

" What the American taxpayer should be worried about frankly this congress spending too much money on other things what we've got here we've got to back -- a credit standby line of credit. And I hope is that it won't need to be used the same with yet -- equity provisions he's heard these are safety nets here in case something further goes wrong. What we wanted to do is give secretary Paulson authority in case it was necessary. But the principal threat to the taxpayer are from too much spending the so called second stimulus bill that's my biggest concern. "

" Silly it's people looks a little bit about their responsibilities. In terms of this new regulator overseeing Fannie Mae and Freddie Mac. You know beat the -- at home the American taxpayer. Exactly is going to be that regulator and how would be different this time so that we don't wind up in the situation we wound up this time around. --"

" For the time being it'll be Jim Lockhart who is fill the job with the old regulator that until the president nominates and the Senate confirms we help. A new regulator but -- marker we'll have the powers. Of the new regulator wants the president signs it into law he he's the yet he's the figure until he figures confirmed. And what that person does what that regulator has this several important new powers that have not existed. Powers that'll help reduce systemic risk. The power to set minimum capital standards the Paris at risk based capital standards the power a look at the portfolios. Election GICs are focused on our mission. And then ultimately if he didn't you would hope this wouldn't be needed the power to put it GSU receivership."

" Perfect simply air because listen annual earnings -- Freddie and look point. -- NASA's become more economically feasible to make the government agencies. You know in your status of the publicly traded company needs some suggest. That that I creating this underpinning that's -- an essence exactly what we're doing. Please stand on the."

" Well I think it's important to distinguish between short term focus on the long term focus the short term focus 70% of all mortgages pass through these two institutions. -- we've got a real soft housing finance and obviously housing construction market so. Right now we are dependent on these two institutions. Four recovery of the housing sector. In addition. With past instabilities in the credit markets. You obviously don't want to be doing things that are going to provoke uncertainty or provoke volatility in the markets. As a long run policy measure however you want to make sure that we reduce systemic risk right you have to distinguish between what you gonna do now what you want to do over the upcoming months and years."

" Read you an excerpt if you don't mind is from an editorial in yesterday's Waterbury Republican American American it's newspaper parts and senator Dodd comes state. And the trial basically says senator Christopher -- quid pro quo bail out bill. As about to become law in what might be the understatement of the year its main proponent in the house Barney frank of Massachusetts -- isn't perfect solution. By any means but it will allow lenders to off load. 300 billion of their worst loans on tax payers. Now what do you stand on that is that going too far by the end of the day is are we foot the bill. Yeah."

" We did have some fairly significant concerns and do. Has some fairly significant concerns with the FHA portions of the bill which is what you're getting at the president thought -- what we should be doing is helping some borrowers on the margin. People who with just a little more assistance would be able to keep their homes not having a wide ranging bail out. -- those will be discussions that are going to have to be addressed in the regulatory process following implementation of -- frankly we think the bill went too far. In terms of throwing the doors of FHA a little too far wide open. Because we don't think that taxpayers should be financing in particular the lenders who provide those bad --"