Secretary Paulson (to no great suprise) was grilled and probably deep fried by almost all the Representatives on the Financial Services Hearing committee. His responses, which were pretty standard irrespective of the questions, centered around:
1. TARP not being a vehicle for helping the auto industry.
2. TARP not being a vehicle for direct intervention to help homeowners.
3. TARP will not be used to purchase illiquid assets.
As you will probably notice, all these are just a collection of his past interviews/press releases over the last few days.
Chairman Bernanke on the other hand expressed support for Chairwoman Sheila Bair's plan to help affected homeowners directly, although he also expressed reservations on some aspects of her plan.
Chairwoman Sheila Bair of FDIC really did not have to answer almost any questions, barring a few to clarify her plan to help homeowners directly.A few points about FDIC Chairwoman Sheila Bair's homeowner rescue plan:
1. The plan will be available only to self occupied property owners.
2. The plan will renegotiate the mortgage payment down to 31% of the homeowner's income.
3. In case the homeowner redefaults, the government will be responsible for 50% of the money due. (this is the part that Fed Reserve chairman Bernanke hates)
4. The entire process will be executed by mortgage servicers, not by the government.
It was no surprise then, that at the end of the hearing, Chairwoman Sheila Bair and Secretary Paulson barely acknowledged each other as they walked to leave the hearing room.
If you are interested in watching Secretary Paulson's uniform responses or watching Secretary Paulson interrupted while trying to answer every question he was asked, here is where you'll find it.