Good morning, Mr. Chairman, Senator Gramm, and distinguished Members of the Committee. Thank you for the opportunity to appear before your Committee today. I am honored that President Bush has nominated me to be a director of the Federal Housing Finance Board, and I am deeply humbled to appear before you at this confirmation hearing. If confirmed, I would be the first full-time female director of the Board.
I want to express my appreciation, to you, Mr. Chairman, the Senator from my home state of Maryland. I would also like to express my appreciation to Senator Gramm for everything that he has done on my behalf. He will be sorely missed by his many friends everywhere.
I would like to take the opportunity to introduce my husband, Harold, and my six children, Leon, Francesca, Jeremy, Godfrey, Theodore, and Richard. I'm happy that they can take time out of their busy work and school schedules to be here today.
I am profoundly grateful to my parents, Ellen and Gabriel Roth, for making the difficult decision to come here 35 years ago from England. I remember sailing into New York Harbor on Labor Day weekend, 1967, and seeing the Statue of Liberty. To be honest, its symbolism did not mean much to me then as a child-I was just glad that the five days of sea-sickness were over. But it has become more and more important as I have grown into adulthood and made the choice to become an American. My parents' decision gave me the opportunity to work in the White House under President Reagan, President George H.W. Bush, and our current President Bush, as well as marrying a wonderful man and having six children. Nowhere else in the world can immigrants have such opportunities.
It is extraordinarily hard to do what my parents did, and pack up all one's possessions and three young children and move to a new country, a country my mother had not even visited. The story is that my father called my mother from the United States and said, "We have to move here, they even heat the bathrooms!" Our home in England had kerosene heaters that my father would go around filling every night before he went to bed. There was no heater in our family's only bathroom, as was common practice in many English homes. One night the wick in the kitchen kerosene heater malfunctioned, and we woke to find the kitchen covered with soot from floor to ceiling.
And that brings me to the subject of housing, and the Federal Housing Finance Board. Many people ask about my interest in the Federal Housing Finance Board. Housing affects all of us-all of us need somewhere to live. And many either own homes, or aspire to do so-it's part of the American dream. With such a large purchase, the financing mechanism is critical.
Our housing and capital markets work so well that many people assume that there is nothing special about them. But, internationally, these well-functioning systems are rare. Our standard fixed thirty-year mortgage is not standard in most other countries, even in the developed world. Generally, people in other countries are required to put down much larger sums, and borrow at rates which vary directly with the prime rate of lending. So when the prime rate goes up, mortgage payments unpredictably take more money away from groceries and clothing. And housing can be so scarce that selling a home and moving to another city becomes practically impossible. If I should have the honor of being confirmed, I would try to preserve and improve the flexible financial systems that America has and make it possible for more Americans to take advantage of them.
The Federal Housing Finance Board oversees the Federal Home Loan Bank System, a group of 12 banks which have $700 billion in assets and approximately 8,000 member banks. The Board makes sure that the System is on a sound financial footing, an important task, as can be seen by recent developments in the corporate and accounting world.
The Federal Home Loan Bank System makes it easier for small banks to lend money to Americans for mortgages. In the first days of banking, banks could only lend out what they had on hand in deposits. Later, they acquired the ability to borrow from some sources to make loans to others. The 8,000 member banks can now, through the Federal Home Loan Banks and the Board's Office of Finance, take advantage of pooling their requests for funds to achieve lower rates, which get passed on directly to the consumer.
About 68 percent of American households own homes. But the rate for minorities is far lower, with fewer than half of Hispanics and African American households owning homes. President Bush and the Federal Housing Finance Board are trying to raise these levels. The Board's Affordable Housing Program helps improve home ownership among these groups, a vital social goal. Recently, the Board expanded the amount of affordable housing program funds that Federal Home Loan Banks can contribute towards downpayment assistance programs for first-time homebuyers.
Chairman Sarbanes and Members of the Committee, I am honored to appear before you today. If confirmed, I promise to work closely with this Committee and Congress to ensure the safety and soundness of the Federal Home Loan Bank System and the fulfillment of the System's affordable housing goals. I look forward to answering any questions that you might have.
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