Franklin Raines Quotations

The automatic stabilizer is unemployment insurance, food stamps, additional coverage of Medicaid.

That is - the reason for that is that home prices are only going to go up. Now, they've never gone down nationwide in our - since we've been keeping track of this.

Well, I think as long as people are talking about stimulus, I think the Fed will be thinking about cutting rates because monetary policy is the better way to go because you can turn it on and turn it off.

And so we have to be careful with looking at additional stimulus that we don't provoke an increase in the bond rate and then offset a lot of the stimulus we've already got.

They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.

And so the danger for the housing industry is if we see interest rates rise.

Well, you know, we've got a lot of stimulus in the economy already from the tax cut, from the lowered interest rates, and also from the refinancing of mortgages.

And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in recession and during booms.

I think if you go beyond a year - if this continues into the system in the out years, I think there is a risk and that - that we could have a negative reaction in the bond market and that will offset the good that was attempted to be done.

Right now we think that rates will stay low, that you'll be able to get a mortgage below seven percent and that's kicked off a refinance boom that's going to put more money in the pockets of consumers.

Well, there are about 10 million children that aren't covered by health insurance. About 3 million qualify for Medicaid but don't get it, so we're going to reach out and bring more of those kids into the Medicaid program.

So from the housing standpoint, steady as you go, I think, would be the best medicine.

Well, I think the best form would be to put money directly in the pockets of consumers.

If there's a severe recession, the automatic stabilizers will come into effect, and we will still try to reduce the structural deficit, but we will not try to keep cutting the budget so that we keep worsening a severe recession.

Right now the long-term investors are telling us that they're not as concerned about inflation and so we're seeing these rates now move into the marketplace and out to the street - rates that individuals can get.

We are shrinking the size of the federal government as a percent of our economy from over 21 percent of the economy to 19 percent of the economy. At the same time, we're growing the private economy.

We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.

Well, now, and there's - for every dollar the federal government spends, there's real people on the other side, and so when we talk about reductions that are going to affect providers, that's going to affect hospitals and doctors and others.

Well, we're just now seeing the reductions in mortgage rates. The mortgage rates are based on the ten-year rate and the Fed controls the overnight or the shorter rates.

We're just sort of like the Eveready bunny. And we just keep going and we expect that to continue because of the strength of that housing market.

Based on the presentation that we heard today, there are more issues then the last time we sat down, ... It fails to target tax relief on middle incomes as the president's approach would do.

We think that it's unwise to put into the constitution a mechanism that enshrines for all time a particular way of measuring the budget.

When they had difficulties they've had a tendency to lurch to the right and out of the mainstream, and we hope that doesn't happen this time,

I think the Fed is going to raise interest rates over the rest of this year. I think it will go up at least 100 basis points before the year is out. So the Fed funds rate will rise from about 6 percent to at least 7 percent. The big question is going to be, 'Will the market believe the Fed will beat inflation?' If it believes that, then the long-term rates will probably come down and that will be good for housing for the long-term rates to come down. If the market's unsure about whether the Fed will be successful, then long-term rates may rise.

People are buying new homes, existing homes at record levels. And that just shows the underlying strength of the economy and the optimism of families that this is still a good time to buy a home even though interest ratesÊ on mortgages have risen substantially,

It creates a contrast between their ideas and ours. We are perfectly happy to be judged by that contrast.

Well, it's been great for new home purchasers, particularly first-time purchasers. I think this is a good time to be thinking about buying a home.

We are in favor of having the most accurate measure of inflation possible, in order to index those various programs, and we are trying to measure what the real cost-of-living changes are,

We are working on a wide variety of ways to bring to the mortgage finance system cost savings for consumers as well as lenders in the mortgage market,

We think we can make progress on upper-income premiums.

We believe our overall fiscal policy is providing an environment where businesses can prosper, but we believe tax cuts should be aimed at people.

This was an extraordinary year for Fannie Mae in every respect,

Although to my knowledge the company has always made good faith efforts to get its accounting right, the SEC has determined that mistakes were made. By my early retirement, I have held myself accountable.

The mortgage is the largest obligation that people take on and it's very expensive to get a mortgage and very painful. It's not a fun process. So we've invested quite a bit of money in using the Internet and e-commerce to make it easier. Fannie Mae has become one of the largest e-commerce companies in the world. Last year, we underwrote through automated underwriting and electronically, two and a half million loans, $300 billion of transactions. This year will be over $400 billion. So e-commerce is moving into the mortgage sector and it's going to affect everybody.

It's going to be a very targeted tax cut program that I think is going to make a meaningful difference for American families,

It will be the second-best year in housing history, and we believe it will be a very strong year for Fannie Mae,

It will be about 20 percent. Down substantially from the level that the president inherited when he came to office. The government is shrinking, as a percentage of our economy, not growing.