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Trump's Controversial Treasury Pick Faces Senate; Trump's Treasury Pick Defends Foreclosure Record. Aired 12:30-1pm ET
Aired January 19, 2017 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:30:03] SEN. MICHAEL BENNET, (D) COLORADO: The first tax plan was $11 trillion. The second, I think is $7.3 --
STEVEN MNUCHIN, TREASURY SECRETARY NOMINEE: Well, then you must be referring to static and not dynamic. The dynamic number was closer to $2 trillion. But --
BENNET: The dynamic is $3.6 trillion. So in any case, what we're doing is adding mountains of debt.
MNUCHIN: Let me just comment that I have discussed the debt with president-elect. We are both concerned that we've gone from $10 trillion to $20 trillion of debt. We think that the way to reduce the debt is by economic growth and that will create the opportunity for us to pay down the debt.
Now, let me just make a comment on the tax plan --
BENNET: It's just to be clear on that though. Senator Thune said, well, that, you know, our history -- in our history, the average growth rate we've seen is about 3.2 percent. It'd be great to get to 4 percent. You said between 3 percent and 4 percent. But there's no way that's going to fill the gap that is projected in these tax plans.
And I can accept the fact that the president-elect may have changed his mind or you differ with him. I'm just trying to understand whether you would find it acceptable to bury the American people under this kind of proposed debt.
MNUCHIN: Again, I think as you know, you know, we had a rather modest campaign staff relative to the other people out there, OK? So one of the things I look forward to, if I'm confirmed is having access to all the people at Treasury who are able to model these things.
So, we were forced. We had some internal models but we were forced to rely upon external models. Certain assumptions we agreed with. Certain the assumptions we didn't agreed with.
I think what's important is that President Trump has a pro-growth economic tax plan. And we are sensitive to the costs of that plan. Yesterday, I did have the opportunity to meet with Senator Wyden. We talked about the process for tax reform. I will be the person from the administration taking the lead on that. And I would look forward to working with the House and the Senate. Both Republicans and Democrats to move forward on tax legislation.
BENNET: I'm out of time, Mr. Chairman. I realize that I want to just make one observation which is that, Mr. Mnuchin, in fairness to him, has twice praised the employees at the Treasury Department today. And I just want to say that's a refreshing and welcome change from what we have heard up until now in a lot of these hearings.
ORRIN HATCH, CHAIRMAN, SENATE FINANCE COMMITTEE: Senator Isakson.
SEN. JOHNNY ISAKSON, (R) GEORGIA: Thank you very much, Mr. Chairman. Mr. Mnuchin, welcome. I'm sorry I've been in and out of the room but I've been listening outside while I've been outside so --
MNUCHIN: Thank you.
ISAKSON: -- I think I'm pretty much up to date. I'm really going to talk to you about something I had not prepared myself to talk about until I heard some of the other questions and testimony that went on. I want to talk about a mortgage-backed securities, Fannie Mae and Freddie Mac in 2008. Your purchase of IndyMac was in 2008, is that correct?
MNUCHIN: Yes. It was on December of 2008 we committed to it.
ISAKSON: And the beginning of the crisis really was in July of 2008 when Merrill-Lynch drove down their portfolio of subprime securities by 71 cents of a dollar. Is that not correct?
MNUCHIN: I think that's correct.
ISAKSON: And you started a domino effect around the world that collapsed the mortgage-backed securities and their values. Is that not correct?
MNUCHIN: That is correct.
ISAKSON: When you purchased IndyMac, it had a number of those loans in its portfolio. Is that correct?
MNUCHIN: It had mortgage-backed -- it had a --
ISAKSON: Mortgage-backed securities.
MNUCHIN: -- mortgage-backed securities.
ISAKSON: Within which were included those loans?
MNUCHIN: Yes, that's correct.
ISAKSON: Because what Wall Street did is Wall Street packaged loans and put them into a security in the market based on high yield. Is that not correct?
MNUCHIN: Yeah. What actually happened in the case of IndyMac is they had securitized the loans themselves. They created their own securities, the market backed up but they couldn't afford to sell them and they got stuck keeping them. So, in many cases most of the mortgage-backed securities we have they didn't buy. Most of them were failed sales.
ISAKSON: Is it not true that the Freddie and Fannie guaranteed and insured loans pretty much at the direction of the Congress of the United States when it came to the affordable housing loans? Is it not true that Congress directed them to have a larger percentage of affordable housing loans in their portfolio?
MNUCHIN: Absolutely. And I believe that, unfortunately what led them to buy a lot of bad loans.
ISAKSON: What I want everybody to understand when they're talking about these mortgage issues. I was in the real estate business for 31 years and was, of course, in Congress at the time this went on. But what happened in a lot of these loans is they were made because the inducement or the direction of Congress to take more of them. What was called an affordable housing loan end up being a subprime loan, if you will, which ended up being a high risk loan. Which ended up having a high interest rate on it, which where the high coupon was packaged together into securities and sold around the world. Is that not correct?
[12:34:57] MNUCHIN: It's true. I mean, these loans had all different types of acronyms. They were load docs, they were subprime. They just should have been called bad loans. That's what they were.
ISAKSON: And your IndyMac as I remember and I recall tried everything it could to recalibrate those loans, restructure those loans, and renegotiate those loans to keep as many as possible from not going into foreclosure. Is that not right?
MNUCHIN: That's true. And not only for the loans that we owned but loans that we serviced for Fannie Mae and Freddie Mac. As a matter of fact, the one person who came to my home and protested at my home, it was a Fannie Mae loan and I wasn't able to do anything about that. And it was through my multiple calls to Fannie Mae that I was able to get a loan modification for that person. But many times people thought we owned the loans, and we did not. They were owned by Fannie Mae and Freddie Mac and other security holders.
ISAKSON: And the main point I want to make for the sake of this argument and I'm sure a lot of the questions you're going to get is, a lot of these loans were originated at the hospices over, the encouragement of the United States government and the Congress of the United States. That's what -- and they were called affordable housing loans.
A lot of people bought those loans. They've been made by somebody else from the bottom institution so they inherited the problem. They didn't originate the problem. There's a world of difference between originating a loan and buying a loan. Is that not correct?
MNUCHIN: That's correct. I can assure that the loans that we originated on the mortgage side going forward were good loans and had nothing to do with those terrible legacy loans. So, thank you for pointing that out.
ISAKSON: That's, that's the important point. Because if you originate something, you own it. But if you acquire something that's a bad debt or a bad piece of paper, you -- shame on you for buying it but it's not your problem for creating it. And that's the important thing to know. Is that not correct?
MNUCHIN: That is true, Senator. Thank you.
ISAKSON: And when I say "shame on you" I don't mean shame on you and that you did something wrong. I mean, shame on you that you inherited something that was wrong, buying something that was good.
MNUCHIN: Yes, I understood that. Thank you for clearing that.
ISAKSON: One last point. I hope I made that as clear as I could. One last point, I have been told by my state director of revenue that the IRS is not sending out -- that the federal government is not sending out W-2 forms to the State Revenue departments in the United States. Is that not correct?
UNIDENTIFIED FEMALE: Correct.
ISAKSON: When you become Treasury secretary, I would hope you would pay attention to that and try and direct them to start going to back to do that because the only way we can keep bogus loans and intrusion into our portfolios is for the people to get back their income, tied to their social security, and the federal government to get their report on that at the same time for our ass to get it at same time. So if you'd work on seeing to it that those practices are ended somewhere around the country, I would appreciate it great.
MNUCHIN: Thank you. I'll be committed to work with you and your staff on that. That sounds like a very important issue.
ISAKSON: Thank you for your willingness to serve and congratulations on your nomination.
MNUCHIN: Thank you, Senator.
HATCH: Senator Heller.
SEN. DEAN HELLER, (R) NEVADA: Thank you, Mr. Chairman and Mr. Mnuchin to you and your family. Welcome to the hearing today.
Since the beginning of the Great Recession, no state was hit harder than the State of Nevada. And you're probably well aware of that. We led the country in bankruptcies, foreclosures, and unemployment. So you can imagine that we're a little sensitive as to who becomes the next Treasury secretary having gone through that over the last eight or nine years.
You came into my office in January -- on January 4th, and we had a good discussion. And I appreciate the visit. I asked you some questions. And I'd like to ask you the same questions today.
HELLER: And the question was, how many Nevada homes were in OneWest Bank's portfolio?
MNUCHIN: Yeah. Unfortunately -- and I'll go back and request that information from the bank. I no longer have that information. But I will work with the bank to try to get that for you.
HELLER: How many Nevadans did OneWest Bank foreclose on while you owned the bank?
MNUCHIN: Again, I have the information that's in public reports. But I'm absolutely committed to go back and get that information for you from the bank. So I apologize. I don't have that with me today. And I do appreciate how hard your state was hit in the foreclosure crisis.
HELLER: Do you know how many Nevadans OneWest Bank provided assistance to through loan modifications?
MNUCHIN: Again, I'll go back and try to get all that information.
HELLER: Here's the reason why I asked you these three questions over again is that, this is the seventh time I've asked. So I asked you when you were in my office and I had my staff followup on it. Three times by text and twice by phone and we still can't get the answers to these questions. And I'm not quite sure with two weeks -- well, your own comments were that you guys had responded to 5,000 pages, 5,000 pages of questions asked. Why were these three questions not asked if you had 5,000 pages of questions that you answered?
[12:40:00] MNUCHIN: Well, first of all, let me apologize to you because I do recall you asking them in your office, and there's no excuse they haven't been answered. I was not aware that my staff also got those questions. So I apologize to you. And I assure you personally that as soon as I get out of this hearing, I will request that information from the bank.
You know, we're responding to a lot of other information so I apologize. This is important to you. And you have my commitment that we will get that.
HELLER: In 2008, when OneWest purchased IndyWest, can you tell me what motivated that transaction? Was it a way to save the bank? Was it a way to make money or was it a way to keep people in their homes or was there some other reason?
MNUCHIN: I think it was all three of the above. So, you know, we -- I saw the opportunity that I thought that there was going to be a banking crisis. And I saw the opportunity that we thought we could turn around the regional bank and turn it from what was a lousy mortgage bank into an attractive regional bank. And that there was the opportunity both to have an attractive investment. Obviously, I had to convince my investors that they would make money, but I saw it as also a great goal of building a business.
Now, I just may comment and, yes, my investors made a lot of money on OneWest but I just comment of, if we had just invested in J.P. Morgan and Bank of America and a handful of other stocks, we would have made a lot more money. And I wouldn't have to have worked nearly as hard. So, a big part of the financial return ultimately was, we invested in the market at a very, very depressed period of time.
HELLER: Were you motivated -- or let me ask it this way. Was it an objective of OneWest Bank to foreclose on Nevadans in order to receive compensation from the FDIC in their shared loss agreement?
MNUCHIN: No, quite the contrary. So, again, when we bought IndyMac from the FDIC, it was inherent in these agreements. We committed to do loan modifications. So when we bought the bank, that was the agreement.
Again, as I've said before, we were proud of loan modifications started there. And we actually had a bunch of incentives, whether it was half incentives or other things in the loss share agreement where it was actually much better for us to do loan modifications. So as I've said before, I can assure you that what prevented us from doing more loan modifications was either the net present value test or was what was the qualification. So we were required to get updated income and people had to have -- had to be able to effectively re-qualify for the loan. So as I've said before, not only from a social basis did I want to keep people in their homes but we were economically motivated to do that.
HELLER: How much did the FDIC pay OneWest for the losses?
MNUCHIN: What do you mean by how much did they pay us for the losses?
HELLER: What was the compensation from the FDIC for foreclosing on homes? Share loss agreement.
MNUCHIN: So what we did the way the shared loss agreement, and again, I would comment, you know, I think there's been like 400 shared loss agreements. I think, according to the FDIC's public data, they believe that they saved $40 billion by using the shared --
HELLER: The answer, the answer is $1.2 billion, $1.2 billion.
MNUCHIN: No. But that's after we absorbed $2 billion of losses. So I just --
HELLER: So you're not saying that that's not a motivation to foreclose on a home is $1.2 billion?
MNUCHIN: No. It's not a motivation because there were restructuring fees that were put through when we did loan modifications. And we wanted good loans. We were not -- again, let me just be clear. We wanted good loans. Having good loans that performed under the lost share agreement was absolutely critical.
HELLER: One more question. Did OneWest Bank specifically target minority communities in Nevada for foreclosures?
MNUCHIN: Absolutely not. HELLER: Mr. Chairman, my time has run out.
HATCH: Your time is up. Senator Casey.
SEN. BOB CASEY, (D) PENNSYLVANIA: Mr. Chairman, thank you very much. And Mr. Mnuchin, I appreciate you being here with your family. And I wanted to start with a subject that you've already answered some questions about. The issue of mortgage foreclosures but also modifications.
I'm holding in my hand, I guess, a four-page -- if you look in both side document entitled -- and this is a Channel 4 in Pittsburgh investigative report just announced this week. Quote, Trump picked for Treasury secretary foreclosed on hundreds of homeowners in Western Pennsylvania. It's dated January 16th. Mr. Chairman, I'd ask consent to have this part of the record.
HATCH: Without objection.
CASEY: Let me just read you part of it, Mr. Mnuchin, because I know sometimes when these reports refer to individuals, you may know them, you may not. I'm not going to ask if you know this person, but here's just a couple of excerpts according to Channel 4 in Pittsburgh.
[12:45:07] Nellie Mlinek lost her husband to cancer, lost her son to an overdose, and then she lost her home to OneWest Bank. She says, and I'm quoting from her words here. "One thing I'll never get over is my son's death." She lives in Westmoreland County, just a little bit east of Pittsburgh, in Ruffs Dale, that's the name of the community.
Here's what Nellie hoped would have happened. She said and I quote, they, meaning OneWest, they should have worked with me to meet a payment that I could not -- that I could make. The report goes on to say, she filed bankruptcy but even then could not save her house. She said it caused her, quote, a lot of depression.
And then at least a couple of examples from other communities that were foreclosed on, a house in White Oak was foreclosed in 2014, a house in North Versailles in 2013, a house in Penn Hills in 2012, a house in Pittsburgh in 2011.
But again, the headline says "Hundreds of homeowners in Western Pennsylvania", depending on where you draw the line. That's probably 10 counties roughly. So one region of a state of 67 counties.
One of the reasons I highlight that is to, number one, focus on the impact that those foreclosures had on one community and one state. But also to ask you some questions just -- so I can make sure the record is clear to the extent that we can get to these in this line of questioning about modifications and foreclosures.
One of the statements you made in my office when we met and I appreciated the time we had. You said OneWest, quote, did the lots of modifications, unquote. And then on the question of foreclosure itself, you said at the time we only did 30 to 35,000 foreclosures, unquote. Is that correct?
MNUCHIN: That was for the period of time that we were talking about 2009-2010.
CASEY: So that's just 2009 and '10 number?
MNUCHIN: The -- I believe the 36 with 2009 and 2010 versus there were 175,000. The 100,000 loan modifications was over a slightly longer period of time. And --
CASEY: So let me just get this. Over the whole period that you were, that you were the leader of OneWest, how many foreclosures total nationwide?
MNUCHIN: I don't have that, but I can find the number. But let me just comment since there's a lot of talk about this foreclosure business. Again, 93 percent of the loans that we serviced, we serviced for third parties. We sold this business.
So again, I never wanted to be in the mortgage servicing business. I didn't want to be in the reverse mortgage business. I wanted to build a reverse -- a regional bank. So OneWest is no longer.
We sold years ago the servicing business because we didn't want to be in that. We sold that business to Ocwen. Obviously, the loan that you're talking about -- I mean, it sounds like an absolutely horrible situation and I sympathize for that person.
CASEY: Well, I appreciate it. Let me get to the second question here on modifications. There seems to be some discrepancy here about the numbers on modifications. You say in the -- in your testimony today, and I'm quoting you here, at the bottom of page 2, ultimately OneWest extended over a 100,000 loan modifications to delinquent borrowers. Now extended isn't the same as a modification. You'd agree with me, won't you?
MNUCHIN: No, no. Extended means they were put on modifications. Whether that's --
CASEY: That's not a completed modification?
MNUCHIN: No, no. Again, they were offered and they were put on a loan modification.
CASEY: But in fact, in fact, according to a document that also I'll make part of the record. This is a one-page document from HAMP, the Home Affordable Modification Program -- Mr. Chairman, I would ask that it be made part of the record. Making home affordable Summer Results, that's the name of the document.
In fact -- let me just say one more, Mr. Chairman, in terms of total modifications, it was really only 22,908 so we'll put that into the record. And we have more questions later.
HATCH: Without objection. We'll now turn to Senator Cassidy.
SEN. BILL CASSIDY, (R) LOUISIANA: Mr. Mnuchin, nice to see you.
MNUCHIN: Nice to see you. Thank you.
CASSIDY: As you can tell by where I am, I'm fairly junior on this panel. I will note though you've been somewhat assaulted by innuendo.
[12:50:00] And my sympathies for being assaulted by innuendo.
MNUCHIN: Thank you.
CASSIDY: Secondly, as regards economic growth. I wrote an editorial with a friend in "Wall Street Journal" a few years ago that showed that if we had the economic growth from 2001 to 2014 as we have from '93 to 2000. In 2014, we would have had a $500 billion surplus despite entitlement spending, despite whatever as opposed to the $500 billion deficit we had. So I appreciate your acknowledgment that pro- growth policies cover a multitude of sins, so good for you.
MNUCHIN: Thank you.
CASSIDY: That said, I represent a lot of rural parishes. And there's two things driving economic growth in such parishes. Typically, utility companies they want to sell more in community banks. And since Dodd-Frank passed, you and I discussed to my office the number of community banks has just like, "Oh my gosh, is this plummeted?" "OMG", as my daughter would say.
So your thoughts as regards, how do we revive the fortunate community banks which in my mind is how do we revive the economic prospects of rural America?
MUNCHIN: Well, thank you and first of all, I enjoyed the opportunity to meet with you and talk about a bunch of these issues. And I think as I mentioned before, I am very concerned that we have and continue to be in the business of putting community banks and small regional banks out of business. That the regulatory cost --
CASSIDY: Can I interrupt for a second?
MUNCHIN: Of course.
CASSIDY: One guy, I don't know what his banks worth, $80 million. He told me that 64 regulatory visits in a 52-week period. The marginal cost for this small bank is like, why am I not selling. I'm sorry, continue.
MUNCHIN: No, that sounds about right from my experience. That's about the right ratio. So I agree with you completely. And as I've said if we want to have economic growth, you know, for us to end up with four or five big banks in this country, you know, and deal with the two big to fail and everything else, or the too big to succeed, we need to have banks. We need to have regional banks. We need to have community banks. Those banks understand the people in the community and can make good loans.
CASSIDY: Now, it's also related to that and something you were speaking, I think, with them, that it doesn't seem like we have an absence of capital in our society right now. So we've got a lot of capital.
MUNCHIN: That's correct.
CASSIDY: It's just that we can't get capital down to Evangeline Parish for somebody who's an entrepreneur to take that capital and to take his invention and bring prosperity to Evangeline Parish. And you don't need to know where Evangeline Parish is. The fact that you don't know shows that it's a smaller parish in terms of population. And so I presume you agree with that.
MUNCHIN: I do, completely.
CASSIDY: Now, related to that and, again, this is something for my edification. This is not -- I don't know the answer to this in. But it strikes me that there's two possible goals of tax reform. One is to create more capital. I think under the Reagan tax cuts my kind of distal to that period is that high marginal rates deprived the capital to those who need it. But it seems as if we have enough capital floating around, although perhaps choke-holded at certain points. And then the other point of tax reform would to be align incentives.
You spoke earlier I think with Thune that this pass through you want to incent (ph) folks to keep the money within the business.
MUNCHIN: That's correct.
CASSIDY: Now so --
MUNCINH: Reinvest it and create jobs.
CASSIDY: Now, would you agree with my -- one, would you agree of what I'm saying? I'm a gastroenterologist. You are the economist and so I'm kind of relaying your point here (ph). Of the two -- is there a third reason that tax reform, against fairness, so if you throw those all in, it seems as if capital, though, creation of capital is the one which isn't the priority so much as to align incentives, perhaps create certainty. You continue. You go.
MUNCHIN: I agree with you. But the only other thing I would say because I do think we have a lot of capital in the United States now but we have a business tax system that is incenting (ph) companies, U.S. companies keeping that capital abroad. So the other thing we want to incent (ph) as part of behavior is that money comes back to the United States both now as well as going forward. And that money can be deployed to create new business here and create jobs and that we stop things like inversions because it makes economic sense for U.S. companies to do business here.
CASSIDY: So, the incentive is both for the company to use their money more wisely, to invest it within to create jobs but also to keep companies from moving abroad.
MUNCHIN: Correct. CASSIDY: On behalf of all those folks in Evangeline Parish and elsewhere, who want prosperity, I thank you for your offer to serve and I look forward to supporting your nomination.
MUNCHIN: Thank you very much. I appreciate that.
HATCH: Thank you, senator, your time is up. Senator Warner.
[00:55:00] SEN. MARK WARNER, (D) VIRGINIA: Thank you, Mr. Chairman. And it's a pleasure to see you, Mr. Munchin, and appreciated our visit and congratulations on your nomination. I've got a series of topics so I'm going to try to move quickly as well.
United States, obviously, enjoys enormous advantages, particularly around the status of us being the reserve currency. That allows us lower interest rates and everything from student loans to mortgages. Senator Bennet already raised this but I want to re-raise it again. The president-elect's comments about potentially renegotiating the debt during the campaign were unprecedented. I want you to in affirm to this body that on a going forward basis, it will be your policy, as much as you can influence the president-elect, that we would never again question America's willingness to standby its stand obligations.
MUNCHIN: Senator, I agree with that 100% and also let me just thank you for meeting with me and also acknowledge as an incredibly successful businessperson, I appreciate your service here.
WARNER: I don't want that to eat into my time.
UNIDENTIFIED FEMALE: It's not bad.
WARNER: There are -- I have been very troubled by even some folks in elective office who have somehow said we can ignore the debt ceiling without consequences. There are even some that are going out and saying, somehow we could prioritize those debt obligations and potentially pay off bondholders, many of them foreign, many of them Chinese. And ignore obligations to pay states, which would then affect their bond ratings, the national security trust funds to honor the commitments the United States government has made to pay salaries of FBI employees, et cetera.
It is your policy that the United States in terms of its debt obligations needs to honor all its debt obligations and should not have any ability to prioritize those obligations.
MUNCHIN: Absolutely. And I hope you will work with me so that we get that done. We've already spent the money. We have the obligations. There should be no uncertainty that we are paying the bills.
WARNER: I think that's extraordinarily important and those who somehow argued for prioritization that would wreak havoc in the financial markets. So I want to re-raise again what Senator Bennet raised. Clearly, if you get this role, words that you say and the president- elect will say will have consequences. We've already seen this, the actions of the president-elect in terms of commenting on the strength of the dollar, unprecedented. No president, Democrat or Republican, has ever done this before. It has effects.
Now, you will simply be a senior adviser in the cabinet of the president. But how do we ensure, since words have such consequences, that there will be inability for the Trump administration on economic policy to try to speak with a single voice?
MUNCHIN: Well, if I am confirmed, I think that once we all get in office, and have regular access, both myself and the administration, I think you will see that. And again, there may be times where, you know, there's a view that the dollar is slightly too strong, but I do believe we will speak with a unified voice.
WARNER: But again then expect the president-elect, but then president, would continue to break all precedent and be willing to weigh into these matters unlike any other prior president.
MUNCHIN: Well, look, as you know, this president is willing to do a lot of things that other presidents haven't done, and I think many of them are great.
WARNER: Let's move to another area. One area that I've had a huge amount of concern and interest in and I know Senator (inaudible) and a number of us on this panel is on the Fannie and Freddie. And I know there were some people that potentially interpreted some of your comments about recap and release, which would in a sense, say, even though the American taxpayer was paid back the $188 billion that we invested in those failing institutions at a moment of crisis. I think both of us would perhaps stand for our business standpoint say that was high risk capital and we get a better return. But somehow those who simply say let's re-float these two entities and basically ignore all some of the underlying challenges. Do you support that position of recap and release that some have advocated.
MUNCHIN: So -- I mean, let me first be clear. I did make some comments about this. My comments were never that there should be recap and release. What my comments were, and first of all, I've been around the mortgage industry for 30 years. I've seen this for a long period of time. So this is an area that I do believe I have expertise in. For very long periods of time, I think that Fannie and Freddie have been well run without creating risk to the government, as well as they've played an important role. I know you're running out of time but just barely --
WARNER: Mr. Chairman, can I get an extra 30 seconds, sir?
HATCH: You will have.
MUNCHIN: Can I just answer this so you get more time. I believe that these are very important entities to provide the necessary liquidity for housing finance and what I've committed to is that I will work with both the Democrats and Republicans. What I said and I believe we need housing reform. So we shouldn't just the Fannie and Freddie as is for the next four or eight years under government control without affects.