Transcript (for information purposes only – we do not guarantee accuracy)SO DON’ T FEEL BAD ABOUT THAT. IF THE GOVERNMENT DOESN’ T PASS A LAW BUT IS USING MORAL SUASION AND THERE’ S NO RIGHT TO GO AGAINST THE GOVERNMENT. IF THEY PASS THE LAW, AND ITS CONTROL BY CONSTITUTIONAL PRINCIPLES LIKE TO PROCESS YOUR TALKING UP THE GOVERNMENT OR THAT PART OF THE CONSTITUTION SAYS YOU CANNOT DO — >> SIT TIGHT FOR A SECONDARY WE HAVE HANK PAULSON SPEAKING ABOUT THIS PLAN RIGHT NOW. >> GOOD AFTERNOON. THANK YOU, SECRETARY JACKSON AND COMPTROLLER. REPRESENTATIVES OF THE AMERICAN SECURITIZATION FORM. THE MORTGAGE BANKERS ASSOCIATION, AND THE HOUSING POLICY COUNCIL FOR YOUR CREATIVITY AND FLEXIBILITY DURING THESE RECENT MONTHS. WE HAVE WORKED THROUGH AN EVOLVING PROCESS TO HELP MINIMIZE THE IMPACT OF THE HOUSING DOWNTURN N HOMEOWNERS, NEIGHBORHOODS, AND THE U.S. ECONOMY. THE INFRASTRUCTURE TO REACH STRUGGLING BAR WARS IS NOW IN PLACE. OUTREACH LETTERS ARE BEING SENT TO BORIS LIKELY TO BE FACING TROUBLE. A TOLL-FREE NUMBER HAS BEEN EXPANDED AND THERE ARE COUNSELORS AVAILABLE TO WORK WITH STRUGGLING BAR WARS. HE AMERICAN SECURITIZATION FORM REPRESENTS MORTGAGE INVESTORS AND SERVICERS. — TO WORK WITH STRUGGLING BORROWERS. THEY WANT TO STREAMLINE THE PRICES OF REFINANCING AND MODIFY SUBPRIME LOANS FOR ABLE HOMEOWNERS. WE HOPE THESE GUIDELINES WILL BE ADOPTED AS REASONABLE AND CUSTOMARY STANDARD PRACTICE ACROSS THE ENTIRE SERVICING INDUSTRY. THIS IS A PRIVATE SECTOR EFFORT INVOLVING NO GOVERNMENT MONEY, SO SOME MAY ASK WHY ARE THESE GOVERNMENT OFFICIALS HERE TODAY? WE ARE HERE BECAUSE WE ALL KNOW IT’ S IN EVERYONE’ S INTEREST, HOMEOWNER, SERVICER, INVESTOR, TO DEVELOP A MARKET-BASED APPROACH AND AVOID FORECLOSURES THAT ARE PREVENTABLE. THE CURRENT SYSTEM FOR WORKING OUT THESE PROBLEM LOANS WOULD NOT BE SUFFICIENT TO HANDLE THE ANTICIPATED 1.8 MILLION KRONOR OCCUPIED SUBPRIME MORTGAGE RESETS THAT WILL OCCUR IN 2008 AND 2009. THE INVESTORS WHO OWN THESE LOANS RECOGNIZE FOR CLOSURE IS COSTLY AND A WORKOUT PLAN OR MORTGAGE MODIFICATION OFTEN BRINGS GREATER VALUE THAN FORECLOSURE. BUT A STANDARD LOAN BY LOAN THE EVALUATION PROCESS THAT IS THE PROCESS WOULD NOT BE ABLE TO HANDLE VOLUME OF WORK REQUIRED. INSTEAD, THE INDUSTRY NEEDS A STREAMLINED APPROACH TO ADDRESS THIS INCREASED VOLUME. THE COMPLEXITY THAT EXISTS IN THE CURRENT SECURITY MARKETS POSE PRACTICAL AND DIFFICULT PROBLEMS. THE VAST MAJORITY OF MORTGAGE SERVICES ARE COLLECTING ON BEHALF OF INVESTORS SCATTERED AROUND THE WORLD AND WHILE EACH OF THE PARTICIPANTS HAS AN INTEREST IN AVOIDING PREVENTABLE FORECLOSURES, THEY’ RE NOT EQUIPPED TO HANDLE THE ANTICIPATED VOLUME ON THE RHONE. — ON THEIR OWN. I SAW A NEED TO DETERMINE IF AND HOW THEY CAN DEVELOP A SHARED FRAMEWORK TO ADDRESS BOTH THE MARKET COMPLEXITY AND THE UPCOMING VOLUME OF MORTGAGE RESETS. THE INDUSTRY STANDARDS ANNOUNCED TODAY DO NOT CHANGE THE NATURE OF THE RESPONSIBILITIES OF THE SERVICING INDUSTRY. SERVICERS WILL CONTINUE TO MODIFY LOANS WHEN IT IS IN THE BEST INTEREST OF INVESTORS. INDEED, THE TANDARDS ANNOUNCED TODAY ARE THE PRODUCT OF DISCUSSIONS AMONG INVESTORS AND SERVICERS. WITH THE INVESTOR COMMUNITY ON BOARD AND AS THE CLEAR BENEFICIARY OF THE APPROACH, THE RISK OF LITIGATION SHOULD BE MANAGEABLE. THEREFORE, I EXPECT SERVICES ACROSS THE INDUSTRY TO PURSUE THE STREAMLINED APPROACH. THE HOPE NOW ALLIANCE REPRESENTS SERVICES THAT COVER 84% OF CURRENTLY OUTSTANDING SUBPRIME MORTGAGES. HOPE NOW ESTIMATES THAT UNDER THIS STREAMLINED APPROACH, UP TO 1.2 MILLION SUBPRIME FARMERS WILL BE ELIGIBLE FOR FAST TRACKING INTO CONSIDERATION FOR AFFORDABLE, REFINANCED OR MODIFY MORTGAGES TRADE — 1.2 MILLION SUBPRIME ARE WORSE. WE ALL LOOK FOR THE TRANSPARENT AND MONTHLY REPORTS ON THE RESULTS OF THESE EFFORTS. – 1.2 MILLION SUBPRIME ARE WORSE. — SUBPRIME BORROWERS. I WOULD LIKE TO BETTER FOCUS ON BORROWERS WHO SITUATION REQUIRES BETTER VIEW. THANK YOU 4 SIGNIFICANTLY INCREASING RESOURCES TO IDENTIFY, CONTACT, AND COUNCIL STRUGGLING HOMEOWNERS. ADDITIONAL THINGS TO REGULATORS THEY’ RE HERE TODAY. THEY REGULATE MORTGAGE LENDING, SERVICING, AND INVESTING INSTITUTIONS SO THEY SEE THE ISSUE FROM ALL PERSPECTIVES. THEREFORE, THEIR SUPPORT FOR THE EFFORT IS VERY MUCH APPRECIATED BY ALL PARTICIPANTS. THE APPROACH ANNOUNCED TODAY IS NOT A SILVER BULLET. WE FACE A DIFFICULT PROBLEM FOR WHICH THERE IS NO PERFECT SOLUTION. TODAY’ S ANNOUNCEMENT IS A SIGNIFICANT STEP. I KNOW EVERYONE HERE HAS WORKED VERY HARD SINCE AUGUST AND WE WILL CONTINUE WORKING. S EVENTS UNFOLD, OUR APPROACH WILL CONTINUE TO ADAPT AND EVOLVE. NOW, SECRETARY JACKSON WILL MAKE SOME REMARKS. >> THANK YOU VERY MUCH, SECRETARY PAULSON. TODAY’ S ANNOUNCEMENT IS OF NATIONAL AND GLOBAL IMPORT. IT WILL SURELY COUNTER THE FEAR AND ANXIETY THAT IS CORROSIVE AND DANGEROUS TO OUR ECONOMY. THE INTEREST RATE FREEZE WILL BE WELL RECEIVED ACROSS THE BOARD BY LENDERS, INVESTORS, BANKERS, GOVERNMENT, AND ESPECIALLY HOMEOWNERS WHO STAND AT THE BRINK OF FORECLOSURE. WE MUST NEVER FORGET THAT THESE HOMEOWNERS HAVE INVESTED THEMSELVES AND THEIR MONEY IN THEIR HOMES. THESE ARE THE PEOPLE WHO ARE WORRIED. VERY WORRIED ABOUT THEIR HOMES AND FAMILIES. HEY WANT A REAL SOLUTION. THEY WANT TO KNOW THAT WE ARE THINKING OF THEM, THAT WE CARE, THAT WE ARE DOING SOMETHING FOR THEM. HOME OWNERSHIP IS A PART OF THE AMERICAN DREAM. IT IS A PLACE WE CAN CALL OUR OWN, OUR STAKE IN THE COMMUNITY, OUR INVESTMENT IN OUR FUTURE. OUR INDIVIDUAL SOURCE OF EQUITY AND PERSONAL WEALTH. THESE ARE NO SMALL MATTERS, BUT THE ESSENTIAL ELEMENT OF FREEDOM AND CHOICE NOW AND IN OUR RETIREMENT YEARS. THESE HOMES ARE WHERE FAMILIES LIVE, GROW TOGETHER, GROW UP, WHERE OUR CHILDREN SPENT THEIR FORMATIVE YEARS, AND WHEN EXTENDED FAMILIES GATHERED DURING THE HOLIDAY SEASONS AS NOW. WE CANNOT IGNORE THE AMERICAN RISK. THIS DECEMBER, WE WANT TO SEE THE WELCOME MAT OUT, NOT A FOUR CORP. — FORECLOSURE NOTICE IN THE MA LBOX. AS WE MOVE INTO WINTER, WHEN THE CHILL OF THE SEASON IS HEARTENED BY THE HELP AND OUR HEART COMMITTEE’ S ACTIONS WILL WARM THE HEART OF AMERICANS CAUGHT IN THE SUBPRIME CRISIS. I APPLAUD HOPE NOW FOR STEPPING FORWARD AND TAKING ACTION TOGETHER, PROACTIVELY CONTACT THE HOMEOWNERS AT RISK OF FORECLOSURE AND WORKING TO FIND AFFORDABLE SOLUTIONS. ALREADY WE SEE THE RESULTS. MANY HOMEOWNERS HAVE REFINANCED INTO NEW, AFFORDABLE MORTGAGES. SOME PEOPLE HAVE BEEN DIRECTED TO NEW AND BETTER MORTGAGES. MANY HOMEOWNERS AT RISK HAVE BEEN DIRECTED TO HUD, THE FEDERAL HOUSING AND MINISTRATION. SINCE EARLY SEPTEMBER, WE HAVE RECEIVED MORE THAN 118,000 REFINANCE APPLICATIONS. ALREADY, 35,000 HOMEOWNERS HAVE REFINANCED IN HA-BACKED LOANS. WE EXPECT 50 BY YEAR’ S END AND MORE TO COME BY NEXT YEAR. BY FREEZING THE CURRENT INTEREST RATE FOR FIVE YEARS, THE INDUSTRY HAS GAINED AND THEY HAVE AGAIN MADE A DECISIVE, NECESSARY ACTIONS THAT WILL BE GOOD FOR HUNDREDS OF THOUSANDS OF AMERICAN HOMEOWNERS. BUT I MUST SAY THERE IS MORE WORK TO DO, MUCH MORE AS MY COLLEAGUE HAS SAID. NOT EVERYONE IS OUT OF DANGER. WE WANT TO PREVENT ANOTHER CYCLE LIKE THIS IN THE FUTURE. THAT IS WHY WE HAVE TAKEN SEVERAL DECISIVE STEPS, SUCH AS PUSHING FHA TO THE LIMIT OF STATUTORY AUTHORITY, EXPANDING THE SCOPE OF GOVERNMENT RESPONDS WITH FHA SECURE, AND OTHER ACTIONS. WE HAVE ALSO ATTEMPTED TO WORK WITH CONGRESS TO PASS FHA MODERNIZATION AS THE PRESIDENT SAID. THIS BILL WOULD INCREASE ACCESS TO HOME RUNS LOAN DOWN PAYMENT REQUIREMENTS AND ALLOW FHA TO ENSURE BIGGER MORTGAGES AND HIGH-COST STATE STREET — WOULD INCREASE ACCESS TO HOME LOANS BY LOW DOWN PAYMENTS. THIS COULD HELP MORE THAN TWO AND A 50,000 FAMILY BY THE END OF 2008, INCLUDING MANY WITH LOW INCOME, LESS THAN PERFECT CREDIT, OR LITTLE SAVINGS. ALL OF THESE CHANGES ARE CRITICAL, CRITICALLY IMPORTANT TO THE EFFORT OF HELPING THE SUBPRIME BAR WERE REFINANCED — SUBPRIME BARR OR REFINANCE INTO — SUBPRIME BORROWER AND WE’ STILL WAITING ON THE SENATE TO ACT. WE HAVE DONE OUR PART. IT’ S TIME FOR CONGRESS TO ACT. WE NEED A BILL NOW. AS TO HUNDREDS OF THOUSANDS OF AMERICANS WHO ARE
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