With regard to savings rates, I think the way that people save is not affected by whether mortgages are funded in the capital markets or are funded through depositories. I think the decisions are entirely independent.
In fact, I think one reason for the success of the secondary market, as opposed to the portfolio lender, is if you look at how Americans save today, it is not generally in savings accounts or checking accounts.
People tend to save through pension funds, through 401(k)s, through money market funds and mutual funds, through insurance vehicles, and so forth. In other words, the general flow of American savings is through the capital markets.
One of the reasons for the secondary market is to provide a bridge between the way Americans do save and the necessity for housing finance. If you look at the share of financial assets held by depository institutions or the share of American savings in deposits over the last 20 years, it has plummeted.
I believe that's really a matter of what's going on with the asset side of American household balance sheets, rather than what's going on with mortgages.
Two of Tony's concerns are really genuine concerns that, if we're evaluating our housing finance system, we ought to take quite seriously. If the GSEs are not doing as well as other lenders in fairly and appropriately dealing with borrowers who are having some difficulty, this would be a matter for concern.
Borrowers' Treatment Counts
It is actually the case that the way borrowers are treated is an important part of how you should evaluate the housing finance system.
It is my impression that while you often do hear these statements like "we don't own the loan anymore," much of the servicing of mortgage loans continues to be done by the originating financial institution.
We try to work very closely with our servicers in making sure that each borrower is treated fairly and appropriately. It's my impression that we are doing at least as good a job as most portfolio lenders.
With regard to product innovation and flexibility, of course, that's how you want to evaluate a housing finance system.
What we've seen over the last four or five years - with particular acceleration over the last couple of years - is real innovation, real creativity, and real desire to have the housing finance system of the secondary market reflect the way Americans live.