Press Gaggle by Tony Fratto

Business Wire, July 1, 2008

JACKSON, Miss. -- Aboard Air Force One

En Route Jackson, Mississippi

12:02 P.M. EDT

MR. FRATTO: Good morning. We're on our way to Jackson, Mississippi. The President had his normal briefings this morning. At 12:55 p.m. local time he'll attend a Senator Roger Wicker fundraiser, and it's also a Mississippi Victory Committee luncheon. It's at a private residence, and as you know is custom, it will be closed press.

At 3:25 p.m. this afternoon, the President participates in a roundtable on housing counseling with a group called Family Service Agency. I'll come back and say a few words about this group. And that's in North Little Rock, Arkansas.

One note on that. Secretary Preston -- HUD Secretary Preston will meet us in Jackson and travel with us the rest of the day.

At 5:05 p.m., the President attends an Arkansas Victory 2008 reception; private residence in Little Rock, Arkansas. And then we return to the White House at 9:40 p.m. this evening.

A little background on Family Services Agency. You've probably heard us talk a lot about the HOPE NOW Alliance. The Family Service Agency and certain other credit counseling agencies like them existed far before the creation of the HOPE NOW Alliance. They have some affiliation now with the network of the HOPE NOW Alliance, but these are people in local communities who meet face to face with the citizens of those communities to help them with their credit counseling trouble they may have, including problems they may have in keeping up with their mortgage payments.

These are people who want to stay in their houses; they want to clear up their credit histories, get back on a schedule that they can sustain and improve their credit scores, and that kind of thing. So these are people who live in a community, they're there face to face, meeting with people. They've been affiliated with HUD, going back to 1942. There are about 1,700 of these kinds of offices across the country. This is the -- Family Services Agency is one of the largest. Neighbor Works, which is another HOPE NOW Alliance affiliated --

Q Is it independent, or is it government-run?

MR. FRATTO: It's not government-run, it's independent. It does get some federal dollars. In recent years it's gotten about between $3.6 million and $3.7 million for different programs. But most of the HUD -- million, with an "m" -- this particular organization directly. It also gets funding indirectly through other organizations that might -- where that funding might originate as federal dollars, as well.

The President, in the roundtable, will have an opportunity to sit with a number of the credit counselors, themselves, and the individuals who run this particular office. There will be a homeowner -- one homeowner in the group who will -- so he'll have the opportunity to hear the story of that individual, and we'll have background information for you all in terms of everyone participating in the roundtable later on.

I think that's it. So with that, I'll take your questions.

Q Well, this is a narrow one to start with, but why just one homeowner? I thought that was part of the point, for him to hear the stories of these folks who are struggling.

MR. FRATTO: Well, it's both. I mean -- and I have no idea why or how many people they tried to reach out to. I think people are naturally somewhat reluctant to talk about their troubled financial history, troubled credit history. It's not the thing that most of us would want to sit around and talk about in public. So I don't know, though, if they tried to get more, or not. But certainly the people who are dealing with troubled homeowners every day are in that room, and those are the people who handle these cases and meet and talk to them. And they can relay the stories of many individuals with credit problems.

Q Are negotiations proceeding over the break on the housing bill? Is there any progress that's being made that the President plans to talk about?

MR. FRATTO: I can't speak to specific areas of progress, but discussions continue, certainly. And members of the Senate know I think pretty clearly where the President is on this and what our position has been on various elements of housing legislation.

There are parts of the Senate bill that we really like and think are -- would make an important contribution to improving conditions in the housing markets and in financial markets, and so -- the strong oversight of Fannie Mae and Freddie Mac -- so the GSE part we really like. There are other portions of the bill -- FHA modernization -- that we like, although we'd like to see some critical elements added to FHA modernization.

And there are some elements of the bill that we don't like that we'll have to deal with, and some of that is on the financing for the expansion of FHASecure. This $4 billion of funding for CDBG -- block grants -- is something we don't think will contribute to solutions or prevent foreclosures, and in fact, it's funding that actually goes to those holding these foreclosed loans, and that's the original lenders. And we prefer not to be subsidizing lenders. We'd rather try to focus on ways we can help homeowners who want to stay in their homes.