not necessarily all of them. >> thank you. mr. barofsky, on page six of the sigtarp report, in referencing, in comparing recipients of the federal assistance to fannie and freddie, you make this statement -- in many ways t.a.r.p. has helped to mix the same toxic cocktail of implicit guarantees and distorted incentives that led to disastrous consequences for the government-sponsored entities. based upon that statement, how are big banks who receive t.a.r.p. money similar to those entities? >> well, two of the big characteristics of what happened with the lead up of the conservatorship of fannie and freddie was, one, the implicit guarantee they received that they had a government backstop. and one of the legacy results of t.a.r.p. is that the market still believes that the united states government is backstopping the largest too big to fail institutions. and that causes a whole range of problems. it hurts market discipline, counterparties, creditors, investors, they don't do the due diligence that's necessary when evaluating whether to do business with one of these banks or investing in one of these banks, because they believe that any type of risk they'll take will be backstopped by uncle sam and the taxpayer. that gives them an advantage. it gives them the opportunity to borrow money more cheaply. s&p recently announced their attempting to change the rating system to make it a permanent aspect that the too big to fail banks will have higher ratings based on implicit government guarantee. and they say the notwithstanding dodd/frank and other countries' response to the financial crisis. this is a market distortion. and as a result, the executives of those banks get back into the position where it's, heads i win, tails, the taxpayer bails me out. >> what recommendations might you suggest to go away from that moral hazard? >> i think we are where we are. and what we have is dodd/frank and the fstock and the committee that's providing oversight. and it does have a lot of tools. they need to have both the regulatory will and the political will to rein in the size of these banks. they have to do two things, which are going to be remarkably difficult. and secretary geithner, to his credit, was remarkably candid with us about the limitations about what they're going to be able to do. but first of all, they have to have a system where they can credibly resolve large financial institutions without bailing out the shareholders, the creditors, the executives. second, which is probably just as important, they have to convince the markets that that's actually going to happen. was if they don't convince the markets, if they don't have the credibility that they will not be bailing out institutions going into the future, it almost won't matter otherwise, because, again, those incentives will still be warped. that discipline will still be gone, and those risks where with the idea that the taxpayer will bail out the executives, the shareholders, the counterparties will continue a perversion of the system. >> thank you. in the parent world, we call that tough love. thank you. >> i thank the gentleman. the chair asks unanimous consent that a statement for the record submitted by the american bankers association be inserted at this time without objection. the chair now recognizes the gentleman from missouri, mr. clay, for five minutes. >> thank you, mr. chairman, and thank you for holding this meeting. mr. barofsky, i understand that you have the oversight authority to investigate mortgage service provided. i wanted to discuss on one specific example of a horrendous abuse against our active duty service member. according to an nbc news report of january 17th, jpmorgan chase and company admitted that they overcharged thousands of active duty military families millions of dollars on their mortgages. they also improperly foreclosed on some of these families. they weren't supposed to do that, because we passed a service member civil relief act, specifically to protect military families from higher interest rates and foreclosure action. we recognize the importance of those families' service to our country. mr. massad, have you seen this report? >> i have, sir. >> what can these families do other than seek redress from the company? >> congressman, i'll be happy to look into that. that's really outside of my jurisdiction. but it was a very troubling report, i agree. and i'd be happy to get back to you or get the appropriate officials to get back to you. >> well, and i'm glad to learn that jpmorgan has acknowledged their errors and is working with the families to try to make things right, starting by paying them back $2 million in overcharges, interest. but this story makes me worry for a different reason. the victims in this case complain that the industry servicer in this case harassed them endlessly, refused to acknowledge legitimate documentation when they presented it, and essentially made their lives miserable. all without any basis to do so. and now i assume that banks don't have one collection agency, just for military service members, and another one for everyone else. mr. barofsky, have you seen similar abuses of this kind, where the banks and their collection agencies harass people without any justification? >> we have. you know, we operate the sigtarp hotline, where we've collected more than 24,000 contacts since our inception. and a lot of them are complaints from homeowners dealing with mortgage servicers, absolutely. and when we see those, we try to direct them to the right place. if there's an allegation of criminal activity and it relates to the hamp program, we'll take it. if it's criminal activity that's outside of our law enforcement jurisdiction, we'll refer it out. we'll refer it to treasury, if it's appropriate. if there's some degree of -- thing that they can do. and we also collect them for our review and for our audit function. >> how about the rule abusive servi servicers? can they be removed from the program? >> i'm sorry? can they be removed from our program? from the hamp program? >> yeah. >> they could be. again, you know, because there are some servicers that cover a lot of the market, and if we were simply to kick them out of the program, then we wouldn't be able to reach the people we'd like to reach. so that's why our focus has been to try to, you know, improve the practices as much as we can. let me just say, you know, we will continue to be aggressive in this. we're in the large servicer shops, you know, all the time, and we'll continue to work with sigtarp on practical constructions -- practical suggestions on how to get the servicers to do a better job, because we agree that they need to do a better job. >> but if they are totally ignoring the homeowner and ignoring the documentation, then -- >> sure. i wouldn't say they're -- if i may, congressman, i wouldn't say they're totally ignoring the homeowner, at least with respect to our program. i think with respect to our program, we've gotten them to pay attention. they've come a long way. when we started this, they said, we can't do this, they said, we're not ready, and we said, you've got to get ready. while we haven't achieved as many modifications as we'd like, i admit that, i've always admitted that, but nevertheless, we're making some progress. we're still getting about 30,000 new families helped a month. that's important. it's not enough, but it's important. >> could either one of the witnesses supply us with the breakdown of state by state modifications? >> yes, we can certainly do that. we can do that for our program, congressman. we do produce a lot of statistics and metrics on our program, but that only covers our program. there, frankly, aren't a lot of statistics on the rest of the industry in that regard. >> okay. and of special interest to me would, of course, be on missouri. >> certainly. >> okay. i thank you, i thank the witnesses, and i yield back. >> i thank the gentleman. our last for this round before we go to votes will be the gentleman from arizona, mr. gosar. >> thank you. being from arizona and hearing of the discussion in regards to florida and ohio, i have to say that arizona, which we thought was a leveling of our problems with the housing, is now all of a sudden showing some signs of double dipping. so this is very troubling. and being from a very poor community from the district, we see homeowners on the very urge -- or the very brink of catastrophe. my question to you, first, mr. massad is, doesn't the lower cost of borrowing that results from the implicit government guarantee partially explain the banks' ability to pay back t.a.r.p.? >> yes. it's probably a factor, but i think a more important factor was the process that we implemented of the stress test. because what we did was we put the largest banks through a very intensive stress test, because the market didn't have confidence as to which institutions might fail and how much capital they needed. so in the spring of 2009, we implemented the stress test process. and we made the results and the whole process very transparent. and as a result of that, they were able to raise private capital and we were able to get the government out. >> so in a follow-up question, so the success depends on that implicit guarantee? >> no, i don't think i said that. what i'm saying is that we got out of the banks' investments, we got the money back through this stress test and recapital station process. i think if i may, i think the thrust of your question, it really relates to some of the concerns mr. barofsky has raised on too big to fail and moral hazard. and those are very legitimate concerns, and this congress obviously debated them at length when it passed the dodd/frank legislation. we're still implementing that. i think mr. barofsky is raising his views on that, that, in effect, it sounds like what he's saying is that dodd/frank may not have been strong enough or may not be strong enough. maybe we should break up some of these banks. maybe we should take more aggressive action. that's certainly an opinion. you know, and others have voiced that opinion. my own view is, let's give dodd/frank some time to work, because now we do have a lot of tools that we didn't have, so i think it's premature to say, to pass judgment on dodd/frank. it was really the first overhaul of our financial system in many years, and it was, you know, it was necessary, or, rather, t.a.r.p. was necessary, because we didn't have the tools that dodd/frank provided. >> mr. barofsky, how would you feel or would you differ in that opinion? >> yeah, i don't think that mr. massad has correctly characterized my position, to put it mildly. the answer to your question, though, is, yes. the implicit guarantee absolutely enabled those banks to get out of t.a.r.p. on the terms that they did. because though banks enjoy enhanced credit ratings from the ratings agency, part of the conditions that the federal reserve put was to get out of narcotics and raise capital. and the larger banks can raise capital more efficiently and cheaply because of this implicit guarantee, because of the benefits they have. so, in short, the answer to your question is yes. >> thank you. i yield back the balance of my time. >> thank you, mr. gosar. and i am instructed that we are about to be called to some votes. so i'm very, very grateful, both mr. massad and mr. barofsky for your attendance to this point. i know there are, if you can give us the indulgence, as soon as we conclude the votes, i know there are some members who would like to continue with some questioning. so the committee stands in recess. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> in my review of the most recent report, the issue of recapitalization not just for the big banks but you are looking for other groups of other banks in communities across the country of of various sizes of them are looking at difficult issues as welfare it coming to you for recapitalization. what is your policy with respect to when you get that notification and shared with others? >> we don't raise additional funds. we want to get as much of the money back as we can. we still have investments in about 560 banks. there are a few of those situations where banks have had trouble and have come to us because they are trying to attract private capital and they ask us to modify our investment and we have agreed in a handful of situations. the biggest is citigroup where we agreed to convert from preferred stock to common stock. that turned out very well since we will realize a $12 billion profit on our overall investment. most of the others have been very small. we try to work with the banks. we have a process of monitoring our investment and monitoring of these banks. occasionally because the bank is troubled, the choice is if we don't do anything, we might lose our investment soap because the bank might be seized. can we agree to some terms that help them attract new capital and therefore realize as much as we can? >> that is one of the issues that struck my interest. part of your participation to them is creating an awareness on others that the enticing other private investors to make capital investments to help with that bag. one thing that concerned me in the report was a suggestion that simultaneously some of these banks may be having trouble for a variety of reasons including the potential that they could be looked at for fraudulent activities. what is your policy to report that to the ig who sought 24,000 reports from people. i used to see the whistle blowers being some of the key things to us. what are you doing to ensure that there are not activities in which her enticing people to invest but simultaneously, they are under investigation for potential fraudulent activity? >> mr. barofsky has raised the question whether we should notify sigtarp and that is a recommendation that we are looking at. we have done that from time to time. >> are you asking that sigtarp tell you when they have someone under investigation? >> no, i am not asking that. >> i am not being pohostile. they may be sitting on information, investigative information. my time is running out. what is your policy with respect to the ability to have time notification that you may have a matter under investigation while simultaneously treasury is encouraging people to invest in that bag? >ank? ." >> there are a lot of complexity to that. what the justice department is investigating that a bank? if we have that knowledge, what do we do? there are complexities to this that we are looking at. we are talking with mr. brods barofsky's staff. >> i don't think there is a great deal of complexity to this. they used to give us a heads up before they would do a recapitalization which would give us an opportunity to review our case then communicate whether there was an issue. we have made a formal recommendation that that process be implemented and with respect to giving money, when tarp banks have an opportunity to recapitalize the treasury checks with we don't want to pour money into an ongoing fraud our biggest success was with colonial bank which had up -- had received approval and treasury did a remarkable job working with to make sure that money did not go out the door. we want to repeat that success. >> one more question. >> if there was a policy where in the past they were and they are not now, what is different? why is that changed? >> there was not a formal policy. we had very few of these before. we notified sigtarp and we are looking at what the formal policy should be. if a law enforcement officials shares information with us, we have to protect the confidentiality of that information and what position that puts us in. i think there are some complexities to this. i would be happy to meet with you and your staff to discuss it further. we are giving a very serious attention. >> i thank the gentleman. we recognize the gentleman from virginia, mr. connelly. >> talk about good timing. thank you for appearing for before the committee today. did the bush administration make mistake in creating the tarp program? >> no, i don't think so. it was unfortunate that we had to created and we did that have the tools to otherwise deal with this crisis but i think they were right to take the actions they took. i am proud of those members of congress from both sides of the aisle who stood up and supported it. i think we needed this. it is unfortunate we had to do it but i don't think we have much choice. >> at the time that tarp was greeted by the secretary of the treasury, mr. paulson, where they're not calls them and subsequently for the nationalization of the banking system in the united states? >> yes, there were. >> did tarp call for a market- briton private-sector alternative to those calls? >> yes, i believe it did. >> despite heated rhetoric about big government takeover, actually would it be fair to say that tarp represented precisely the opposite? >> i agree them . >> there were concerns that tarp was going to be this and less sucking sound that was going to suck up tax dollars and inflate the federal deficit enormously. is that what happened? >> no, i think one of the areas where tarp has succeeded is in the declining estimates of the financial cost of the program. >> what is the net cost currently of the $750 billion that was originally allocated? >> it depends on who you ask. we have all three estimates. the cbo estimate is in the area of about $25 billion. the treasury estimate is about $50 billion. omb has a significantly higher estimate but that is dated back to last year. i anticipate that number will come down. >> the nonpartisan congressional budget office on which this institution has historically relied until recently when we don't like their numbers says $25 billion? >> yes, the reason for the big difference between that and treasury is that the cbo looked at the hamp program and does not believe that treasury will spend a fraction of the amount allocated. >> are there still warrants and stock to be sold that could get improve that net estimate to? >> i am assuming that when cbo does its estimate, they would consider those factors. >> everything is about timing when you sell the warrants and stocks? >> of course, the markets could improve or get worse. >> you mentioned to the hamp program. this committee had a hearing last year and at that time, my friends and the other side of the aisle criticize the program which they opposed. nonetheless, they criticized it because only of 167,000 americans. do i understand that number is half a million? >> yes, that's correct. that is the direct permanent modification. >> so the failing program has helped more americans? >> it keeps chugging along and helping people. >> at that hearing, we had testimony from banks in which those bankers said that even the number at that time which was one of the 67,000 understated the reach of the -- was 167,000 understated the reach of the program. absolutely right. before we. hamp, the services were not -- before we did hamp, servicers are raised people's payments. when hamp came in, it provided standards that the servicer is instituted in their proprietary programs. fannie mae and freddie mac adopted some of the standards for their mortgages. the indirect effect has been great. some people talk about the number of foreclosures. if you look of the total number of modifications entered into since april of 2009 either under hamp or other programs, it does outpace foreclosure sales, completions by two-one. it is not enough. i think we are making this crisis better. >> my time is up. >> the chair recognizes the man from oklahoma for five minutes. >> i just want to get some clarifications. i am aware of some limitations that dodd-frank is placed on tarp and the boundaries of the new programs. is treasury willing to assure us today that there is no intention that any tarp funds will be used for state pension bailouts or state government bailouts? >> yes, sir pmi terrifi. >> terrific, you detail some of the numbers. the $410 billion, we have received back $320 billion. approximately one under $66 billion remains outstanding. we are missing about $9 billion? can you re-submit another report on that? >> i would be happy to do that. i don't believe it is $9 billion. >> when you add the numbers together, that is a quick to detail on it. on the auto industry financing program, what is the plan at this point? what is the plan for exiting? we went from 61% ownership to 33% which is great progress. what is the plan to take it down to zero? >> we are actively working on that. i want to be careful because of the securities laws. we cannot be too definitive about a timetable. now that we've completed the initial public offering of gm, we have a pathway to sell the rest of our shares. i would suspect we would sell all those, hopefully, within the next two years of market conditions permitting. with respect to investment in chrysler and allied financial, we are working toward public offerings for those institutions. >> have you set up a timetable? is there some plan? >> we have not done that because we have to be sensitive to a couple of things like market conditions and also, in the case of the companies that are not yet public, they have to be ready to go public. we cannot force them to do that. i can assure you that we are trying to get out of all these investments as quickly as possible. i firmly believe that our purpose which is to promote financial stability is best served today by getting the government out of the business of owning interest in private companies. >> i would definitely concur on that one. his treasury still in the operational business of gm/ chrysler? is someone still on board their advising? >> we monitor those investments but we have not participated in the day to day operations. we do not think that is an appropriate role for the u.s. government. >> i would agree on that as well. the report details $59.7 billion available out there. i am sure that number may move around. when does tarp sunset? when will it not exist anymore? >> i would say on the investment side, we are trying to get out as quickly as possible. i can't give you a timetable, but i think with respect to the remaining investments, roughly $170 billion, i think we will get most of that back in the next two years. there will be a portion that we can i get back within that timeframe. we are winding down the operation. we are trying to get out as fast as we can. >> would it help to have a legislative solution on this to set a timetable? >> i don't think a legislative solution would be helpful because that could depress the value that we could get for the investments we have. believe me, i don't intend to be here 20 years from now. >> in the report, it details that the five largest banks control about 60% of gdp. there were 20% larger than they were before the crisis. the end result has been the biggest banks have grown bigger and seem to be more of a systemic risk. >> without tarp, they would have been greater because we would not have helped institutions that could not weather the storm. whether it is too concentrated is certainly a question that the congress can take up. barofsky has said that the congress can consider a desperate we have tools to try to regulate that under dodd- frank. some people have suggested nationalizing banks or breaking them up. those are policy options that the congress can consider >. >> it seems we have a preference for the largest of banks. my time has expired. >> the chair recognizes the gentleman from illinois. >> thank you both for coming in. let me be very brief and ask two broad macro-level questions and get an answer from each of you. like many of my colleagues, i hear from community banks every day who are struggling. i hear from community and small banks every day who resent the fact that it seems like the government sided with the big banks on tarp. why are these community banks struggling? what is your biggest concern that you've got right now for community banks? >> that is a very good question. many of the smaller banks to have loan portfolios that are more heavily weighted to the real estate sector and therefore they have been hurt by that. number two, they don't have access to capital as easily as the big banks. those a very real concerns. with the tarp program, we tried to address some of that. when you look at the money invested in banks, about $250 billion over all was invested through tarp, $234 billion or so was done under the bush administration. i agree with the actions they took but i am pointing out that they did that and $125 billion of that went to the largest institutions in the country. when obama came in, we have only invested an additional $11 billion and a lot of that went to the smaller institutions and we set up programs to help them. many of them are still struggling and we are trying to do our best to get this economy back and get an economic recovery and get the housing market stabilized. those of the best things we can do for those banks. >> y still this persisting struggle with community banks? >> part of it is the structure of their loan portfolio but a large part of it is the continuing existence of too big to fail. it gives an advantage to the bigger banks. they don't have the access to virtually free money from the federal reserve that the larger banks have. the results of tarp has been its given the opportunity for the largest banks to earn their way out of trouble. those are opportunities not available for smaller community banks. >> that leads to my second one broad- offere critique of tarp either with implication or design. if you could offer one broad critique, what would be? >> if we had to do this all over again and i'm assuming we will have to, there are many things we could change or would change. it is hard to be specific. there are certain things in the housing program we did later that we might have done earlier. i agree with the comment earlier that it was opposed as a purchase of troubled assets and i think the bush administration wisely changed course because they had to. that contributed to some of the criticism. there are many other things like that that we would do over. hopefully under dodd-frank, we have the tools that will make this sort of thing unnecessary in the future. >> one of the things that could have been done better within the realm of what the tarp was is better transparency. from day one, this has been a recurring theme, we have been very bipartisan in our criticism for both the ballston treasury department as well as the geiger treasury department. explain this better to the american people and being more upfront and honest about these programs whether it was saying that the first nine institutions were healthy and viable when they knew that someone not to some of the more recent statements, the cheerleading statement about the program. i think having a more transparent program -- and it is not too late. i would encourage treasury to renew its transparency. if people understand and they feel every one is being up front, you can be -- it can be a more informed conversation. right now, the treasury running of this program has been picking winners and losers or backroom deals. those criticisms really cannot of these transparency discussions. >> i am fully committed to transparency and most of the particular questions that have been done we have implemented. people are not usually aware of this. we publish annual financial statements which are audited and we receive opinions on these financial statements for two years without any material weaknesses. that is a rare thing for a startup entity. that is a relatively rare thing in government. we publish a monthly report to congress that lays out where the money is and how much it has come -- how much of it has come back. we publish an action report and a dividend and interest report. we put all our contracts and agreements on our website. that means not only contracts with financial institutions but also procurement contracts and other materials we have testified before congress numerous times. we meet and we have three oversight agencies and we fully cooperate with them and give them all the information they need. they produced a total of 75 reports. we can always strive to do more but actually, there is a lot of information about this program available. >> thank you both. >> if anyone else arrives who has not had a first round, we will take them. otherwise, i would like to have a brief second round for a couple of people i would go to . >> i would begin -- this has not been discussed greatly but the moral hazard posed -- created by tarp is mentioned in your report. you have mentioned it before and it is certainly a big concern. s &p considers the involvement of the government specifically in their credit rating. is that a direct result of tarp? >> i would say it this way -- because we did not have the tools to deal with this rescue, we had to do tarpon that raises the moral hazard too big to fail concerns. now, congress has addressed those through dodd-frank. we have not implemented dodd- frank get but those are the tools we now have. i don't think it is appropriate to blame it on tarp. rather, blame it on the fact that we did not have an adequate regulatory system and that is what we are trying to improve now. >> i would like to call a g eithner slide. the report outlines clearly that in the future we may have to do exceptional things if we face a shock that large. we just don't know what is systemic and what is not until you know the nature of the shop. ck. was this after the dodd-frank log? >> this was in september of 2010. >> it sounds like your testimony is contrary to your boss is testimony. >> i don't think it is. i think what secretary of the treasury tim geithner was referring to >> we have his words. >> he was referring to the tools under dodd-frank and the fact that we don't know exactly what the issue will be. the tools under dodd-frank are flexible. we will not just have a set of quantitative criteria that say if you are above a certain amount of assets, you aretoo big to fail to >>. president obama said last night, there will be new rules that no firm -- the dodd-frank signing last year -- he said these new rules will make clear that no firm is somehow protected because it istoo big to fail so we don't have another aig. it seems that secretary tim geithner's words run counter to that. it is hard for his staff to say he did not really made it. can you give us context for this? >> i was not in the room. my deputies were in the room. after we received this quote, we documented best which is a normal function included we provided this to treasury. we had a number of conversations and they made suggestions and we incorporated those suggestions. treasury had assured us that they would not contest the language that was used and did not think we have presented and a misleading statements. we stand by quote. it is accurate. the nightmaretary the nightmar was being candid. i commend him for that. i think secretary of a nightmare, was being candid. -- i think secretary of the treasury tim geithner was being candid. i commend him for that. if the tools in dodd-frank are implemented correctly and that is a a bit'if,' it would require actions by the regulators that hopefully we can get to a point where the government -- or the market will believe that the government does not need or will not bailout these companies but we are not there. >> we know that s&p has made the idea of a bailout, a tart-like program or dodd-frank, it is hard to judge based on the s&p making permanent their analysis of a federal backstop -- we also know that there is explicit guarantees signed through contracts in 2000 a and 2009 whether it was with the fed or the fdic or tarp other backstopped -- of a backstop to get government guarantees of the assets. we know the explicit number. the question to both of you is, can you tell this committee what you believe the net present value of implicit government guarantees are going forward to these financial institutions? >> there has been some studies. we don't do that type of economic analysis. i saw one that suggested a $34 billion per year advantage that the larger institutions had. that is one number from one academic study. >> i don't have the ability to quantify that on the spot. in terms of an explicit guarantees, you are referring to the citigroup asset guarantee program which has now been terminated. >> actually, that is not what i'm referring to. at the time of economic crisis, and this has been well documented, the fdic, the fed, tarp, treasury has explicit guarantees through contracts that are publicly available. i am asking about the -- those are well known. i am asking about the implicit guarantees. mr. barofsky in his report -- >> if the gentleman can conclude -- >> have we addressed too big to fail issue sufficiently? my response is that congress passed the dodd-frank law to address that. if there is debut of some that that was not sufficient, that as a judgment for congress to make. where treasury is now is that we are actively trying to implement that loss of that we can use the tools it gave us to make sure that no institution is too big to fail. i think it is premature to conclude that it has not worked and we need some tougher legislation to address that. >> i thank the gentleman. the chair now recognizes the ranking member. >> the dodd-frank bill includes limiting the concept too big to fail. taxpayers will not cover the cost of failing institutions and will not cover the cost of liquidating such an institution. the legislation prohibits bailing out individual companies. the legislation creates a financial stability oversight council to mop -- monitor substantial rest. isk. can you describe briefly how implementation of these measures will addressed too big to fail problem that what the time line would be? >> i can describe that very generally. it is not my responsibility to implement it but i am happy to get the official at treasury to brief you. the law was passed in july and there are a number of rule- making procedures and studies being conducted. they hold regular meetings and part of that is public. they are busy working on these. they are also busy creating the office of financial resources which is designed to monitor conditions in the financial industry and determine what risks need to be addressed. i would be happy to get you more of a detailed briefing. >> we will follow up with you with detailed questions. if you can, how will criteria be established to allow us to identify firms that pose a systemic risk? i take it you will do that in writing? >> i will, i will say generally it will be quantitative and qualitative judgments and the criteria is not just about size. it is about riskiness of activities, interconnectedness, extended leverage, the supervision. these are given a lot of thought. they are very complex issues. i would be happy to get to a more detailed summary of where we are on that theme \ / \ / \ / \ / \ / t. >> we are all concerned ha aboutmp. h --amp. i understand you a s handigtarp disagree with your authorities. will you take more aggressive steps to require a service or performance? >> absolutely, i don't think we disagree to the extent of our authorities but maybe there's a difference how we can best improve using those authorities. >> do you talk? >> we talk regularly. we think the benefits of these housing programs are very real and important, we are still trying to improve them and trying to reach as many people as possible. it is not a justhamp. a lot of the money goes to other programs. the statement was made that because this has not gone as well as you have hope and there are problems, we should simply turn it back over to the servicers and let them deal with it. i think that would absolutely be the wrong thing to do. that is what got us here. from theeen cleare different standpoints that turning a back over to the servicers would not be constructive at this time. >> you talked earlier about retooling. there are things you are doing now trying to improve the program and make it more efficient? >> that's correct, we have done a number of things. >> i want you to give a list of those things for it when do you expect those to be complete? >> it is an ongoing process. as we see problems, we responded to them. we have addressed the fact that servicers might have been considering some 14 hamp at the same time they were foreclosing. we started this program to get people into trials. we did not make the servicers verify the income. that led to the fact that many people did not get into permanent trials. we addressed that and have worked for the backlog. it is an ongoing process and i would be happy to give you a list the. >> we talked about making the agency's more accountable. if you are doing things that will improve this program, i would ask that we bring mr. massad or someone from his office back to give us a report on exactly where they stand. you said it and i have said it and we agree that we do want accountability. i don't want to see that program and but if you are doing things to improve the program, i want to know. when can you come back to was to give us more information so we can have confidence? both sides of the aisle are frustrated. >> absolutely, congressman. >> if you can give as monthly updates, we will commit to have you back in your next quarterly report if that works for both of you. >> that is fine. >> i appreciate that. >> i yield back. >> inclosing i have a couple of questions and these can be answered for the record because they tend to be a little complex. we have talked today specifically about tarp. when get into hamp. that is shared with another piece of legislation, hera, they have joined fund. we did not get into the $30 billion and how that is scored. i know there is a very thorough quarterly report but if you could create before the next 30 day update a good analysis so the members can have your interpretation of outstanding funds, meaning -- this is a question for treasury in consultation with the fed -- obligated funds remaining at the fed because we are not the financial-services committee -- looking at the funds committed under other programs in a hera. i think that will help us understand where the money still remains that is either obligated or literally out. that will help us 30, 60, 90 days from now. it is clear that we still have major credible agencies that the t leaveoo big to fail is leaving them to have more success by loaning money at a lower amount. that is a challenge for small banks. he would like to work as a committee to ensure that as dodd-frank is implemented, that that leads to a fading away of that as the president had promised at the time of the sighting. we also did not talk about and i would like this included in your report or briefing sheet, the approximately $145 billion that is gone forever to g these's. gse's. one thing that i would appreciate which is uniquely to treasury, most of us here in washington who have been business have tried to convert to pay-as-you-go accounting. treasury is different. i began seeing the accrual system of reserves come into pleay. you had reserves. you had a stated value. you stated them, restated them this year for the previous year and they got worse. however, in this year, they got so much better that there is this $154 billion swing. maybe you can clarify this to where we understand this in a simpler way. it is important because as i understand it, those numbers reflect on the anticipated deficit and other figures we look at. i think all of us want to know the true deficit. to know it, we would like it not to exist but we would like to have the accurate numbers. lastly, today we have been talking in net dollars. before we talk again, like the committee to have source material that preferably you two agree on. in the way a normal business would do it. meaning, you represent a profit from investments you made, loans made and warrants that have been realized. those do not go as an offset against other bad deals. we're not looking for your net profit. we would like to see where you put the money in and what you lost. where you put the money in and what you gained. what we are saying is to scrape off the profits and put them in a pile from the good deals but any time a particular basket, meaning a company or entity had a loss, we would like to see those losses. when we evaluate what worked and did not work in this program, it never did what we anticipated but did something very different. it is important for all of us to seek loans to sovereign entities worked and other things not so much. some of these you can answer because general motors and chrysler are projected but not yet final but we will take the projection. i would like to take the liberty, in closing, of reading what is a draft of what will be the final mission statement. as a private sector guy, at some point, when you take over as ceo, you have to make sure your mission statement matches what you would like to see. this is our first hearing, i would like to read it. americans deserve to know that money washington takes from them is well spent. americans deserve an efficient, effective government that works for them. our job on the oversight and government reform committee is to help americans securities rights. our task is to hold government accountable to taxpayers because taxpayers have a right to know what they get from government. we will work tirelessly in partnership with citizens, watchdogs -- citizens-watchdogs to deliver facts to the american people that bring reform to the federal bureaucracy. this is our mission statement. hopefully, we began today by asking you as you have done to help us in that effort. i thank you and we stand adjourned. 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