fha has a horrible experience with the defaults. the other problem is, it hits people whoav lower incomes and minorities much harder than anybody else. i just redid a study that had been done about 10 or 12 years ago, by community group in out of chicago, back in 2000 two that showed that in 22 cities, virtually all the cities had much higher foreclosure rates for people that were either lower income, compared to middle income or minority compared to non-minority. i redid the study. got the exact same results but moved it forward to 2009, 2010. same results for fha. melissa: okay we've got to go. thanks to both of you. good discussion. appreciate your time. >> thanks, melissa. melissa: next on "money," should you be expected to work on your vacation? you won't believe how many americans say yes? is this healthy? this is a money talk ir. they're zooming across a road that made as well be paved with it. we have the answer coming up. do i ever have too much money? ♪ melissa: no matter what time it is, money is alwayon the move. black

i mean that is the, that is what fha does. everyone of them virtually was a 30-year fixed-rate loan. there were virtually no arms. fha has a horrible experience with the defaults. the other problem is, it hits people who have lower incomes and minorities much harder than anybody else. i just redid a study that had been done about 10 or 12 years ago, by community group in out of chicago, back in 2000 two that showed that in 22 cities, virtually all the cities had much higher foreclosure rates for people that were either lower income, compared to middle income or minority compared to non-minority. i redid the study. got the exact same results but moved it forward to 2009, 2010. same results for fha. melissa: okay we've got to go. thanks to both of you. good discussion. appreciate your time. >> thanks, melissa. melissa: next on "money," should you be expected to work on your vacation? you won't believe how many americans say yes? is this healthy? this is a money talk ir. they're zooming across a road that made as well be paved wi

>> fha is a sub provender. ones that went away it shows up as fha. >> so naturally it is in the worst position. don't blame senior citizens. >> it is the factory try to bail everybody out but also the fha commissioner said this is just the accounting glitch we really didn't want that they make us take it. as of august there are 47 billion net capital position. they are in deep, deep, deep trouble is not just the seniors. levi. gerri: she was referencing the reverse mortgages that is not the whole cuttlefish. any way to say no thanks? we're done? >>. >> bill put reverse -- don't put refers programs but everybody said help out the seniors. they make this over and over gerri: it is unbelievable we cannot get a right. figure for coming. we appreciate your help. what do you think? is it time to base and the bailout? we will show the results at the end of the show. when we come back wait until you see what we cooked up. the food was so good also and heir who thought she was swindled out of her millions. you will want

>> fha is a sub provender. ones that went away it shows up as fha. >> so naturally it is in the worst position. don't blame senior citizens. >> it is the factory try to bail everybody out but also the fha commissioner said this is just the accounting glitch we really didn't want that they make us take it. as of august there are 47 billion net capital position. they are in deep, deep, deep trouble is not just the seniors. levi. gerri: s was referencing the reverse mortgages that is not the whole cuttlefish. any way to say no thanks? we're done? >>. >> bill put reverse -- don't put refers programs but everybody said help out the seniors. they make this over and over gerri: it is unbelievable we cannot get a right. figure for coming. we appreciate your help. what do you think? is it time to base and the bailout? we will show the results at the end of the show. when we come back wait until you see what we cooked up. the food was so good also and heir who thought she was swindled out of her millions. you will want t

they point to the fha's very high delinquency rate. it is falling but at the end of june it was 8.22%. seriously delinquent. compare that to 5.88% delinquency rate for all loans. >> it's the one institution that made it through the entire crisis without yet having to take any draw and perhaps may ultimately work its way out of this without having been a failed entity. >> reporter: dave stevens, now ceo of the mortgage bankers association, led the fha during the worst of the housing crisis and says there will always be a role for government mortgage insurer pipts the entryway for first-time buyers. >> i think it's going to be very difficult to have availability of capital on a large scale for the low down payment market that is safe and sustainable on a go forward basis without having the government play a role. >> reporter: while the fha has not needed a bailout yet, it still could. as the rest of the mortgage market deals with new regulations, making mortgages more expensive, the fha could, in fact, start to grow yet again. for more,

>> fha is a sub provender. ones that went away it shows up as fha. >> so naturally it is in the worst position. don't blame senior citizens. >> it is the factory try to bail everybody out but also the fha commissioner said this is just the accounting glitchwe really didn't want that they make us take it. as of august there are 47 billion net capital position. they are in deep, deep, deep trouble is not just the seniors. levi. gerri: she was referencing the reverse mortgages that is not the whole cuttlefish. any way to say no thanks? we're done? >>. >> bill put reverse -- don't put refers programs but everybody said help out the seniors. they make this over and over gerri: it is unbelievable we cannot get a right. figure for coming. we appreciate your help. what do you think? is it time to base and the bailout? we will show the results at the end of the show. when we come back wait until you see what we cooked up. the food was so good also and heir who thought she was swindled out of her millions. you will want

>> fha is a sub provender. ones that went away it shows up as fha. >> so naturally it is in the worst position. don't blame senior citizens. >> it is the factory try to bail everybody out but also the commissioner said this is just the accounting glitch we really didn't want that they make us take it. as of august there are 47 billion net capital position. they are in deep, deep, deep trouble is not just the seniors. levi. gerri: she was referencing the reverse mortgages that is not the whole cuttlefish. any way to say no thanks? we're done? >>. >> bill put reverse -- don't put refers programs but everybody said help out the seniors. they make this over and over gerri: it is unbelievable we cannot get a right. figure for coming. we appreciate your help. what do you think? is it time to base and the bailout? we will show the results at the end of the show. when we come back wait until you see what we cooked up. the food was so good also and heir who thought she was swindled out of her millions. you will want to

the first bailout in the fha 79 year history. joining us now, former fha manager. it is somewhat laughable $1.7 billion can go without approval, everybody seems to think it is okay. >> you are absolutely right, tracy. what is unfortunate is fha is woefully short of capital. if congress made it mandatory that it holds 2% of its outstanding insurance in capit capital, it has no capital. that's a shortfall of about 20 plus billion dollars. in addition, if it were looked at from generally accepted principles, it is $25 billion in solvent to the tune of negative $25 billion. total capital shortfall is $35 billion. tracy: is this going to do it, is this enough to get it back on good graces, or will they come back to the bailout drawing table again? >> i think the way they calculate their capital is accounting principles, it's on mechanisms, but the real issue here is what is the next three or four years hold for the economy. we are four and half years into an expansion. the average expansion last about four years. if there is a recession anytime in the next three to four

estimate because of a decline in fha endorsement volume. fha has been getting less business due to higher mortgage rates and higher premiums and fees it's charging. the draw based on tricky accounting that requires the fha to predict how much it will need over the next 30 years to cover losses that prediction was made last december. galants says improvements already this year including fewer defaults and foreclosures would have made the draw unnecessary regardless it does need the cash to pay claims it -- it doesn't need it to pay claims. it has over $30 billion in reserves. >> interesting. >> thank you very much. >> what do the rich really want in a new home? our wealth editor knows and i'm waiting to be surprised. >> the suspense killing you. >> location still important when it comes to choosing a home. inside their house, their tastes are changing. a new study from caldwell banker international and a luxury institute polled homeowners with income of more than $250,000. the average home purchased was $1.6 million. their top priority in a

still 27% of the mortgages are underwritten by the fha. no one is going to talk badly about getting mortgages to struggling soldiers, but at the same time to your point not everybody can afford a house. are you doing these people a favor if you're making them stretch to the last dime? gerri: we learne learn what thes of that are. here's what you said to the producer. where turning down people mortgage professionals believe reserve mortgages turned down the credit is on the ability to repay while others have no business attending mortgages are getting them. it is not just people who should not be getting them are getting them, it is people who want to have them and are willing to pay cannot get them. i get a lot of e-mails of people who want to buy a second home, i want to buy a first home, and i can't because the standards are so strict. do you think the rules are too tight on that? too tight on the other? >> the government bailed out housing insurer, he was saying we want zero defects on 200 different things which run the gamut from your

the fha gave credit to the borrowers and now they pay the price. i'd like the last round don't expect a bad month dash a big battle in congress the law automatically access the funds. more still to come including information every worker needs to hear how to negotiate your salary. a startling look at the nation's education system why most students are not prepared for college. stay with us. ♪ [ male announcer ] now, taking care of things at home is just a tap away. ♪ introducing at&t digital life... ♪ ...personalized home security and automation... [ lock clicks ] ...that lets you be cloto home. that's so cool. [ male announcer ] get $100 in instant savings when you order digital life smart security. limited availability in select markets. ♪ gerri: forget not paying for it nearly half of the juniors and seniors are not prepared. to gauge whether a student will be successful in the first year experts say they should score 1550 on the s.a.t. but only 43 percent actually score that high. 20 me now from the cato institute center for internation

they will add up and they only the fha but fannie and freddie again. as the economies turned south and interest rates rise, the temporary improvement in the budget deficit will turn around and we are going to look at annual budget deficits north of $1 trillion treat we could be looking at deficits on the order of one point five dollars trillion -- 1.5 trillion dollars to two -- $2 trillion. >> there's an opportunity for investors to make a lot of money whenever that happens with a market downturn. do you see any personal gain or -- in letting the markets tumble as a result of a debt limit rake through? >> they are not going to unfortunately -- they will raise the debt ceiling. this is all theater. this is political theater. the politicians want to get the american public to believe that the worst thing that can happen is that the government stop are owing and stop spending. they're going to create a phony crisis and they will save us from it. the borrowing and the continuous raising of the debt ceiling. why don't these politicians just put up a bill to

these are fha-backed loans and if you haven't had that endorsement yet from the fha, you have to wait until after the shutdown is over. let me tell you exactly what we are talking about, fha-backed loans which are 45% of all mortgages last year and comes out to 60,000 a month, and so perhaps some 60,000 deals that could fall through, and the shutdown affects this agency when you look at the hud, the housing of urban development, which is the, you know, the i guess the parent agency for fha loans will have 8,900 of the workers sent home, carol. sent home. and only 350 will stay there. and less than 4% of the staff so it is a skeleton staff, and they will no longer be able to do these loans as a result of a shutdown. but fannie mae and freddie mac guarantee the vast ma jjority o the home loans are funded by fees, and that will keep going. so when you look at the folks watching the real estate market, and the real estate recovery has been tentative and worries of the higher mortgage rates could be slowing the housing recovery and a lot of people are watching this to see if maybe the shut

premiums in the fha and far fewer delinquencies. on the flip side the fha is making a lot fewer loans and that means it's making less money. its accounting thing but $1.7 billion from the treasury, this is the fha's first time it's asked for a bailout like that. >> up next on the program, the results are in. find out if that crash avoidance feature in your new car can actually prevent rear end collisions like these. we have all the details. and later amc networks gaining more than 30% so far this year but now that its show "breaking bad" is coming to an end, can is sustain that. and here's a look at some of the most watched finales of all time. i'm hoping who shot j.r. is there but no. we'll be right back. she's always had a playful side. and you love her for it. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed

the fha was still continue to approve loan modification for those borrowers facing foreclosure. stocks indicating a down start on wall street. the dow looks like we will open more than 100 points lower. kohl's is offering items from a --nch designer ranging from much cheaper than what you would saks.thaat at the new york stock exchange, i'm jane king, bloomberg news, for wbal-tv 11 news. back to you. >> thank you. submit is expected to recommendations regarding the use of electronic devices during flights. allowing patients to play music and games and watch movies during takeoff and landings. some devices would need to be on airplane mode. most changes would require more work and study by the fha so they might not happen anytime soon. >> we are off to a quiet start on this monday. temperatures in the upper 40's and the low 50's. 52 at martin state airport. may be a light jacket or sweater for the kids this morning. we will put a 20% chance for a sprinkle. a mix of clouds and sun. it will be mild with a high near 76. the seven-day forecast in a moment. >> good morning to you. a b

the fha does not originate any loans. it simply insures them against losses for lenders so they will make loans to first-time borrowers with lowdown payments, as low as 3.5% down for example. now despite this treasury draw, the agency insists that it is not in any serious financial trouble. that this is a temporary accounting entry, based on government requirements using data by the end of last year. if it could have used updated figures reflecting better loan performance this year and recovering money from defaulted loans it would not have to have done this it suggests. and told congress, it is estimated the improvement in the recovery rates alone is worth more than $5 billion to the reserve fund, which would far exceed the amount of the mandatory appropriation in the tomorrow form of that treasury loan. republicans jumped on this news. critics as well. jeb hensarling, chairman of the house financial services committee in a statement said, if the fha was a private financial institution, likely somebody would be fired, so

even the fha program which usually is an opportunity for people, first-time home buyers, that program has more got more expensive because of the new insurance requirements. in some cases the last link of the loan. so it is going to be really challenging the first part of the year. some of the price constraints. gerri: and here is the irony. the proportion of mortgages purchased by government agencies , 90%. so the federal government has not really roll back their involvement in the market at all. we are back to where we were. governments calling the shots. i don't know about you, but i do not trust them to run this market. >> well, the other way of looking at it is that they have pulled out of the market right now there would be nine. so this has to be an orderly retreat. some people would make the argument that the reason we are seeing fannie and freddie drop their loan limits is specifically to encourage other lenders to get into the market and reduce that government footprints. but whenever the government does in terms of friday, fannie, fha, jenny made, they have to do it awfully,

even the fha program which usually is an opportunity for people, first-time home buyers, that program has more got more expensive because of the new insurance requirements. in some cases the last link of the loan. so it is going to be really challenging the first part of the year. some of the price constraints. gerri: and here is the irony. the proportion of mortgages purchased by government agencies , 90%. so the federal government has not really roll back their involvement in the market at all. we are back to where we were. governments calling the shots. i don't know about you, but i do not trust them to run this market. >> well, the other way of looking at it is that they have pulled out of the market right now there would be nine. so this has to be an orderly retreat. some people would make the argument that the reason we are seeing fannie and freddie drop their loan limits is specifically to encourage other lenders to get into the market and reduc that government footprints. but whenever the government does in terms of friday, fannie, fha, jenny made, they have to do it awfully,

we know that fha has said, hmmm, we're not certain we want to even touch these initially. the whole program is based on fha provideing a take-out insurance after they make that second loan. so there's nobody that wants to touch this. then you have lawsuits have been filed by the investors. this thing is going to be tied up in knots as doug said, forever the only people that will be hurt are the people that live in richmond. melissa: doug, is it too dramatic to say if this really went through, it kind of undermines the whole mortgage system? >> this is a horrifically bad idea. i think you made an important point that shouldn't go unrepeated which is, there's a particular group of private investors who are going to benefit enormously from this. they're geting a government to aid and abet their profit-making scheme. that is the worst kind of policy, sort of crony capitalism. and especially when it doesn't help homeowners. so we've seen this issue raised in other jurisdictions. thoughtful people said looked at it said, no, we don't want to go there. one hopes they will get ano

fannie can't come after him, fha can't come after them. say, listen, this covers everything -- >> you're talking multi-agency. >> yes. if anybody sues us, we got a judge and the judge will say, hey, government, you signed a piece of paper, you can't sue jpmorgan. that's how you cut that legal bill by two-thirds. >> when it comes to wamu, they had a paper that said they wouldn't sue them. the american people did not benefit. >> the stock is up this morning. shares of yahoo! what a week. back to the hedge fund we were talking about. there's another one your trader might said sell it. two weeks on yahoo!. >> bulls, bears and pigs, david. >> what a shot. wow! >> one of the greatest stocks. a chinese roll-out this morning. we saw research, chinese internet market very, very hot. google is not allowed to be there. >> alibaba and you've got a couple of giants there. of course they own 24% of alibaba. yesterday i brought up the idea that perhaps some of their stake could be distributed to shareholders in tax efficient manner, that being yahoo! and

the interest rate-- it was an fha loan o5 1/4%. we're fortunate that inflation really hasn't bothereds. there were other winners. this wave of inflation coincidedwith t credim of the late sixties. consumers wereedtouy on cret y now before prices go up. pay later with cheaper dollars. consumers were spending money. increased demand was creating jobs. so businesses would seem to be winning, t many soon had second thoughts. business does not fare well overall during inflation. at the initial stages, some businesses think they are better off because profits seem to rise. you have a situation where your inventory cost is low. you purchased goods previously. inflation comes along and you raise prices. suddenly,costs gin to. you get a bigger profi you have this uncertainty. suddenly, most businesses are worse off. you that often leads usty. to recessions. among those clearly worse off were senior citizens. mostly they lived on fixed incomes. they had no extra money. how could they meet raises in rents, heating, or food? it seemed that whe

that's a change from the fha on the mortgage front. social security checks, mandatory. medicare, medicaid mandatory. food stamps and job benefits same thing. postal service will be open. a lot of day to day things will still happen. the social security checks, a lot of people have been saying until main street feels it, they'll dismiss the thee at risks in washington as just that. by the time main street feels it, it could be when we're talking about not paying our bills come october 17th or later. that's when you wouldn't see that those checks in the mail for, say, social security or jobless benefits. . that would be a real problem. meantime, in terms of shutdown, of course, you still have to pay your taxes, wolf. and members of congress as we have pointed out over and over again, members of congress will still be paid. no question. >> they're essential government employees. that's why they'll get paid. thanks very much for that. for a full list of what would be open, what would be closed, you can check out our interactive page @cnn.com/interactive. we're standing by.

. >> people who have lost their properties can buy under fha guidelines. the. >> the housing fair was also for first time home buyers. >>> alameda county officials are warning tonight that young people, foster youth, are prime target for identity theft. >> you think about it ha losing their identity. they use mobile apps and that's becoming a common way in which they can find they've lost their identity. >> keith carson says the county is working with youth to prevent the theft. they may not know their information is shared (. >> bay area activist dislike the noplace of a new bill. legislature passed the bill for illegal immigrants to get a license. some say this will sigma advertise immigrants. >> especially if you don't have id or form of permanent residences. >> we're going to continue organizing to make sure we take off the mark. >> the license will say it's identification for driving only. >>> a southern california school district is hiring a company to monitor student's social media posts. the company will collect information from facebook, intragram

i was there when they did it. >> so what are the odds fha could escape unscathed? the answer is zero. they've frantically tried raising insurance premiums, that hasn't helped. well, it's helped, but that shows you what deep trouble they're in. adam: so if they're in trouble and we see the hedge funds are going to start selling off some of the properties, what's going to happen to people that want to sell their homes and buy homes? fha's in trouble, so first-time home buyers are going to have more trouble getting a mortgage? what does the future hold? >> well, that's why i've never been overly optimistic about this big housing revival. it was an investor revival, not a traditional household revival. this could actually put really downward -- and if investors are pulling out, the problem is there's no back fill. mortgage purchase applications are still stuck at 1996 levels. we're just not seeing the recovery from the consumer side. adam: all right. and we appreciate your being with us. there's so much more to discuss because housing effects all of us in so many ways.

even though fha change the guidelines in august saying they are going to insure loans after one year of an economic event if you fit within the grid. no matter what we are not in the recovery we deserve to be in. on to the lenders start releasing the inventory and really lending on the market, we will never know what the true situation with the real estate market in america. stuart: i know there is a lot of pressure to relax lending standards all over again. i think there's a lot of pressure to do a whole lot more on the bottom, do you see it happening? that is political pressure to get the housing market going and keep it going. >> fha could change anything they want. we know the lenders have the overlay, they have a final message. certain lenders i talked to after these guidelines said they will probably fold because they want to lend money again. the bottom line is where is it as it relates to the employment and the people had to meet the obligation? the sad commentary in all this, everybody still wants the american dream, and people will get themselves into loans again if they ha

>> remember we talked about three weeks ago, fha in august changed the guidelines. if you fit within this grid, they'll insure a loan. if you don't fit in the new guidelines that i talked about a few weeks ago, basically showing there is a change in income for a period of time, you're current on your present consumer debts, then you still have the two-year, three-year protocol, which means this: if you file bankruptcy on a primary residence was involved, two years after that, fha will insure and two -- the key is to find out if you fall within the new guidelines. if you do, and how do you do that? you go to mortgage lender and ask them about the guidelines and see if they fit within the new fha guidelines to get an insured loan. >> steve: you're suggesting go to somebody who knows what they're talking about. >> absolutely. >> steve: final question from pennsylvania. i am furious at my property management company. i have several rentals and i pay them each a commission from the rent. every time i inspect the house after a tenant leaves, it's always a mess. what can i

. >> people who have lost their properties can buy under fha guidelines. the. >> the housing fair was also for first time home buyers. >>> alameda county officials are warning tonight that young people, foster youth, are prime target for identity theft. >> you think about it has losing their identity. they use mobile apps and that's becoming a common way in which they can find they've lost their identity. >> keith carson says the county is working with youth to prevent the theft. they may not know their information is shared (. >> bay area activist dislike the noplace of a new bill. legislature passed the bill for illegal immigrants to get a license. some say this will sigma advertise immigrants. >> especially if you don't have id or form of permanent residences. >> we're going to continue organizing to make sure we take off the mark. >> the license will say it's identification for driving only. >>> a southern california school district is hiring a company to monitor student's social media posts. the company will collect information from facebook, intragra

gerri: last week we told you about the fha is seeking 1. 7 billion from the treasury to cover losses from defaulted mortgages. the reverse mortgage did here with details, a jordan welcome back. but people don't know with these reverse mortgages are a and it is exactly as it sounds. >> you have to be 62 years or older and you are tapping your home equity with a mortgage they you get the money as a credit line or as of lump-sum and if you pay the loan back the draft pavements and do get the money now but with the refers payment it pays as you go. gerri: instead debate pays you. it is highly controversial levy we seniors were taking its bid to jeff but there are new rules that people need to know about. >> starting today the new rules. the borrowers will undergo a credit check. gerri: how did it be possible they did not have a credit check? >> they thought they could take it so that you need to be sure you can pay your property taxes also to borrow 15% less fees and in the past and only 60% of the credit lines see you could get less money they want you to have some equity over not going

buif the fha stops writing the 25 to 30% of all the housing loans, we you have a serious problem. i don't think it is that likely that will go on for such a long period of time, but there is an element of confidence and we have seen during the last cycle what happens to the overall economy on the real estate market is hard. neil: i got to see it myself. it is desert is going past each other on this issue. are capable of this? >> there is an issue of consumer confidence that will affect consumer reaction. >> what can i say, if you get the sound bite, you get a headline, but there's no substance behind it and it creates a problem and everyone is looking to one line of data. and i think if you asked about the details, you probably have a better understanding who have basically dunkerque politicians committed never created a job, they've never done anything outside of this. neil: if we look at a shutdown next weekend, there is certainly not enough time to avoid one outright. but if it drug on for a few weeks? >> if people stop being able to qualify for loans, it creates a longer-term

never forget the fha, federal housing administration, which has been writing a huge amount of mortgage insurance, is getting out of that game, leaving genworth and radian to clean up in this market. genworth is moving aggressively. the company recently sold off

the shutdown will trickle down to the fha or the federal housing administration and your mortgage could end up in a pile in offices if congress can't agree to a deal by midnight. one bright spot, they will still continue to approve loan modifications to those facing foreclosure. kohl's has designer clothing line from jennifer lopez and vera wang and kathy meladrino. and that is business news live at bloomberg headquarters in new york, linda bell, reporting for abc7 news, back to you. >> thank you very much, linda. 6:00 now, we've got another hour of news and it all starts right now. >> if they were to lose their paychecks like everybody else would lose their paycheck that might motivate them to resolve it. >> we're hours away from a possible government shutdown and lawmakers do not appear to be moving any closer to a compromise. >> plus why a top ranking navy official has been suspended. >> and despite a cooler morning, a stream of beautiful days of weather is continuing this morning. "good morning, washington," happy monday, i'm jummy olabanji. >> and i'm scott thuman. again -- we want

no fha loans will be available. social security check and medicare checks will go out on time. and active duty military will stay on the job. there is a chance their paychecks may be delayed. so what does it mean for the average person? will you feel this as a taxpayer? stuart varney is the host of varney and company. stu, what have we got here? >> not much. wake up tomorrow morning. if the federal government is not shut down this will not help the average person. 300 million people will hardly feel it at all. 800,000 people will be furloughed temporarily. the impact on the vast majority of people, virtually nothing as of tomorrow morning if we shut down tonight. march are you you think the big date comes with the debt ceiling issue. >> yes, that is far more important. october 17 we lose the authority to borrow more money. midnight tonight we lost the authority to spend more money. borrowing it is far more important. in advance of that deadline what you are seeing is a tee klein in the stock market this morning. how the market closes this afternoon don't know, but you are seein

but if the fha stops writing the 25 to 30% of all the housing loans, we you have a serious problem. i don't think it is that likely that will go on for such a long period of time, but there is an element of confidence and we have seen during the last cycle what happens to the overall economy on the real estate market is hard. neil: i got to see it myself. it is desert is going past each other on this issue. are they capable of this? >> there is an issue of consumer confidence that will affect consumer reaction. >> what can i say, if you get the sound bite, you get a headline, but there's no substance behind it and it creates a problem and everyone is looking to one line of data. and i think if you asked about the details, you probably have a better understanding who have basically dunkerque politicians committed never created a job, they've never done anything outside of this. neil: if we look at a shutdown next weekend, there is certainly not enough time to avoid one outright. but if it drug on for a few weeks? >> if people stop being able to qualify for loans, it creates a longer-

never forget the fha, federal housing administration, which has been writing a huge amount of mortgage insurance, is getting out of that game, leaving genworth and radian to clean up in this market. genworth is moving aggressively. the company recently sold off its wealth management unit, plans to spin off its australian division. it's just a really good situation. i would recommend buying it into this weakness so can you run circles around all the money managers who i believe will be buying it aggressively from now to the end of the year. and lastly there's assurant, aic. property casualty insurance. it's a very forward thinking company, getting into all sorts of neat markets. assurant bought lifestyle group. it's a british mortgage provider. assurant has a solid track record of successfully developing new specialty insurance markets. this group is really red hot. buy them tomorrow. going into this year, money managers will be searching for stocks to anoint. they're going to search for the winners. and i want to you get there first, which is why i'm going through the year's best perfo

never forget the fha, federal housing administration, which has been writing a huge amount of mortgage insurance is getting out of that game, leaving genworth and radiant to clean up in this market. the company recently sold off its wealth management unit, plans to spin off its australian division. it's just a really good situation. i would recommend buying into this weakness so can you run circles around all the money managers who will be buying it aggressive from now to the end of the year. and lastly there's assurant, aic. it's a very forward thinking company, getting into all sorts of neat markets. assurant bought lifestyle groups. it's a british mortgage provider. assurant has a solid track record of successfully developed new specialty insurance markets. this group is really red hot. buy them tomorrow. go into this year, money managers will be searching for stocks to anoint. they're going to search for winners. and i want to you get there first, which is why i'm going through the year's best performing sector by sector. e*trade, lincoln national, assure ant and schwab. these outp

the fha was really a savior of the housing market but obviously it came at a price. it looks to be a 1.5 to $2 billion short term cost. >> well, we have seen history of intervention in the housing market before. we will keep an eye on that one this time around. appreciate it. >> that does it for closing bell. kelly, always a pleasure to have you with us. >> and fast money begins right now. >> live from the nasdaq market site, i'm melissa lee. here is tonight's line up. hedge fund big wig joins us with stock picks globally. multibillion dollar listing, the exchange war is on for twitter's ipo. and a stock that has more than doubled this year, we're talking to the ceo of web md. our traders are tonight are steven, guy, and pete. resisting the rally.

the mortgage interest rate reduction, the fha, the program, va, all of the different -- have tended to promote homeownership. barney said you can have too much of a good thing. homeownership went up. all of the models didn't see a big drop in residential mortgages. if you were an investor and owned a mortgage, the biggest risk was not historically you wouldn't get your money back, you would get it back too soon. and then you what disappointed me in terms of dodd frank and the way that was watered down was that the regulators allowed this -- the exception if a mortgage was a qualified mortgage. and the new consumer finance protection bureau originally had regulations that said the buyer had to be able to afford the home and put 20% down. okay? there's huge resistance. so affordability is important. but flexibility to pay, but willingness to pay is very important. and the only way you get to willingness to pay is the 20% down. even on that, it bowed to the political pressure. >> -- >> no. he was in joint pressure. i don't think it has to be a 20% down. there are other ways. >> something

think you're fine, because in the end there is a change in the mortgage insurance business and the fha is pulling out and i think you should hold on to the trading tock and will hold in the judicial environment and i think you can see their 15, $15 and the bad loans are going to go and the generate long are growth wrote. i think the shortfalls, this is where they'll be concentrating. don't move. lightning round is next. >>> tomorrow, kick off the trading day with "squawk on the street," live from post nine at the nyse. ♪ nascar is about excitement. but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. he sure it's hard to believe he was ever sick. he does. but the bills, they just keep coming. you remember the life insurance you bought years ago. it has living benefits t

. >> one more by the wachlt if the government shuts down, people hoping for an fha-backed mortgage are going to have to wait because those applications will not be processed. >>> new this morning, fremont police are looking for a man they say kidnapped and robbed a woman earlier this month. that's a sketch of the suspect who forced the victim into her car at gunpoint to the warm springs area. short while later, he took her money and ran off. he's described as slender middle east earn man in his mid 20s with waive have i or curly hair. the woman was not physically hurt. >>> a security guard shot a man who allegedly try today rob a reporter. the reporter had just finished an interview in san francisco's bayview district last night when two men appeared with a gun and demanded his gear. the security guard who recently retireed from the oakland police department opened fire. bullets hit one suspect's leg. somebody drove him to sf general, and police were weight for him at the hospital. the reporter wasn't hurt. bay area tv stations, including ours, regularly hire security guards for news c

with fha and va loans making up the bulk of the rest, that according to inside mortgage fine nance. federal regulators are trying to wind down fannie and freddie. they have increased their fees they charge lenders and also talk of lowering the loan limits. that hope then is that investors would come back to the market and banks would start lending outside of fannie and freddie. but that will, of course, take a loot of time. plenty more on-line. tyler? >> thank you very much. >>> let's go to dominic for a market flash on an airline that is joining the s&p 500. dominic? >> how about the friendly skies delta in this case here. they're getting a pop in trading up about 7%. late friday, s&p, dow jones end disease will add -- indices will add delaware dell -- delta. here's how some of the other big s&p 500 additions have fared in trading so far this year. on july 1st we found out that info and ratings company nielsen would replace sprint nextel. shares finished up 2% in the next regular trading session but a month later we're down 1%. on june 3rd, we found out gm would replace heinz, shar

thinking about getting a loan for a housedozens have been killed and the entire process was stop the fha.. beginning of the fiscal year. money began towards hiring police and also social-service programs. all of those things are going to be running dry. >> do you think that this has a high possibility? >> i would think so. and i think that it is probably 75%. >> let us talk about the president obama care. we got a question from even anderson. he is a founder of a small start up company and he is wondering what type of impact it will have on small businesses. will he have to raise his race? it also >> guest: one of the reasons why the republican party is so bent on trying to kill the president obama gear is that it is addressing the issues that your friend brought up. first of all, how many employees does he have? if he has 50 employees or more? >> is the cut >> guest: off 20 employees guest even if it is 20. it is assuming that obama care is not defunded in the mid october. that is where he can look to find better prices, better deals, better competition for security and insurance for hi

the fha pulled the plug. i know he tried hard to do that. my comment was a lot of my conservative friends said let them go bankrupt. you shouldn't have done bear stearns. lit fall. lehman was allowed to fall. and, of course, the consequences were so terrible. we came to the consensus we couldn't let it happen again. then it was national free market day. >> the other thing which barney allowed me to tell the story in the prologue that's just come out with the reissue of "on the brink" was that wasn't too long after lehman went down -- excuse me, that bear stearns went down that the markets and, again, bear stearns, bear stearns had only been saved because the buyer in the form of j.p. morgan emerged. and we had to have a definitive system. but we learned that the time we didn't have the necessary authorities to save a failing investment without a buyer. so ben bernanke and i went and talked with barney. we explained he didn't have the emergency powers he had for emergency banks. we didn't have them for investment banks to wind them down and k

then you saw the obama administration yesterday or the day before unveil a new plan and having the fha which requires only a three and a half percent down payment try to make it easier for people who defaulted on their mortgage to get a new one on a new on sale. >> this is dangerous because it is a repeat of what we saw post financial crisis -- pre financial crisis, i should say. there is another risk, regulators are trying to tell the arab people, don't worry, we can regulate risk out of the market. we will keep you safe and sued the big bad banks. the truth is, the best protection against bad practices in the market is bankruptcy. what we saw at the end of the bush administration and throughout the obama administration is completely the opposite. government taking over these industries, hundreds of regulators into the banks in telling the public, don't worry. it will be fine. there is a lot of trouble there. ashley: a headline move today. getting out entirely of the college loan program because the obama administration takeover of the loan market, $407 billion in four years has pushe