Look, its a way to make money. They need a headline. Melissa well, the show is called money. All right. We have to go. Thats all the money we have for you today. The c becker tomorrow. The willis report is coming up next. Gerri tonight, the white house planning to use executive power to limit gun owner rights in this country. And the number one goal of american millionaires. The surprising answer to a new survey. Welcome to the willis report. Hello, everybody. Im gerri willis. The Consumer FinancialProtection Bureau rolling out new mortgage rules today, and as we do whenever the government issues new regulations, we take a look at the true impact on you , not the promises. Here are the basics on todays new rules. They prohibit a borrowers total loan payments from exceeding 43 of income. No more of those highrisk mortgages like no Income Verification loans that played a part in the housing bust. Skeptics ask whether these hurt the people theyre trying to protect and damage the delicate housing recovery. Joining me now, resident fellow at the American Enterprise institute and former executive Vice President of fannie mae. And director of Housing Finance and policy for the center for american progress. I will start with you. These rules are crucial. Why . And do they go far enough in your point is you . It seems like common sense that if you are a Mortgage Lender and make a mortgage, youre going to check to see if the borrower can afford the mortgage. That is precisely what did not happen in the runup to the housing crisis which is why we need the rule that the bar has the ability to pay the loan back. Gerri just common sense. I think the problem here is that fha and other Government Agencies are making loans that are irresponsible for years and years, including loans with high debt ratios and will continue to make them under these rules, yet the cftc says they will prevent irresponsible lending. One of the most irresponsible lenders out there. Gerri we agree to disagree. I want to talk about this issue of a 1sizefitsall mortgage because it is clear that is what will happen because of a new rule making. Banks will be more incentive just offer the 30year fixed mortgage. Is that a good thing . First of all, i dont think that is true. You can still make a 15year mortgage, and you can still make adjustable rate mortgages. What you cant make is mortgages that are so risky that most people cannot possibly handle them. Gerri ahead, jump in because i think there are a slew of other mortgages that people who watch this program are fairly welltodo and responsible citizens might want to see. Big problems, for example, with the socalled ninja loans, the very ones that apply to Small Business owners who have uneven streams of income. Do you think we will get in a situation where we are limiting the options of consumers . I think the ninja loans and loans for selfemployed will be difficult to get. Severely abused during the crisis throughout the crisis. The government, again, promoting a lot of those loans in the lead to a tremendous amount of abuse. Suppose to be used for Small Business owners and ended the being used for many, many times, millions and millions of people. The problem that these new rules present is that the cfpb has set up a definition of a prime loan, yet this line can have a zero down payment, can have a 580 fica store store. And you can have a debt ratio of over 50 percent. As long as it goes through a government sanctioned automated underwriting system by fannie, freddie, or fha its a prime loan gerri what about that. No skin in the game. I put down no down payment, and under this scheme i get a big loan. Well, that is not what this is about. First of all [talking over each other] gerri in the text of the rule you do not have to make a downpayment necessarily. What you were talking about is that under a certain definition call the qualified mortgage, which is a special definition within a much larger role, there is no particular down payment requirement, although there are a bunch of other down payment requirements. All this does is set a floor for responsible lending. It does not prescribe the lenders its exactly how. Gerri let me put it to you this way. Lets say their is a lender it decides the floor is where he wants to be and require no downpayment. Is that good policy for the consumer Protection Bureau that is trying to make everybody more responsible . I dont think it makes sense for regulator to prescribe a down payment. In an america where everyone was required to have a 20 percent down payment we would not have much of the Mortgage Market because the vast majority of families cannot possibly do that. Lenders make decisions for all kinds of reasons. Credit enhancements, mortgage insurance, all sorts of reasons that a lender might be able to do save lowdown payment lending. Gerri one of the interesting things about this, it seems to me that it locks the government even more tightly into the Mortgage Market. Instead of saying we will change the rules, mix this up and make the private sector take it over and run this thing. Instead the government is getting more involved. What do you make of that . Absolutely. [talking over each other] on one hand we have the federal Housing Finance agency trying to reduce their footprint by raising their guarantee fees to make them less competitive. On the other hand we have the cftc saying for the next seven years or as long as fannie and freddie are in conservatorship, anything they do under their automated underwriting is acceptable. Well, that will lock fannie, freddie, and they say the same thing for fha. That will lock all of them into the system that relies on the government. You are going to see more reliance on government rather than less, which i believe is probably what the cfpd wants. Gerri julia. Well, you could not have more reliance on government because 90 percent of the market is backed by the government. [talking over each other] gerri in the long run doesnt this new rulemaking seem to make the government even more important and lock it down for years to come . This rule is separate from the need for overall Housing Finance reform. I would love to see some reform, love to see us figure out what to do. I dont think conservatorship [talking over each other] gerri handle all of onetime. Well, it has not been handled. The time was when doddfrank was passed. Conspicuously absent, and so we drove things out over the past four, three years. It continues, and that is what will happen. This is, again, a step in the wrong direction because it is really going to entrench the government. Right now the governments hold on the market is decreasing slowly. The last statistic was 16 percent of lending was not guaranteed by the government, up from 10 . I think with these rules it will push things back through fannie, freddie, and even fha. Gerri the beat goes on. Thank you for coming on. Great to hear from both of you. Thank you for your time. Thank you for having me. Gerri now we want to know what you think. Was the housing bust caused by bad lenders are bad borrowers . Log onto gerriwillis. Com, vote on the right hand side of the screen and i will share the results of the end of tonights show. More coming up in this hour. A weightloss product known to millions of americans. The company responding to accusations it is just as an appearance team. Stay with us. Next, president of lama could use executive order to limit gun owner rights, where does the administration stackup when it comes to trying to do an endrun around congress . Ill break it down. What are you doing . Nothing. Are you stealing our Daughters School supplies and taking them to work . No, i was just looking for my stapler and my. This thing. I save money by using fedex ground and buy my own supplies. Thats a great idea. Im going to go. We got clients in today. [ male announcer ] save on ground shipping at fedex office. Gerri vicepresident joe biden surprised many by suggesting the president would seek his preferences for guncontrol made law through an executive order. The president is calling ted enact an executive order, executive action that can be taken. We have not decided yet, but we are compiling with the help of the attorney general and all the rest of the cabinet members as well as legislative action we believe is required. Gerri all right. Well, the outcry has started almost immediately. Why is it president obama chooses to go around congress and make his wishes known by edict . Doesnt it seem like he overrides are elected representatives we too often . In truth, barack obama is not the biggest issuer of executive orders. Take a look. President obama has 147. Towards w. Bush, 291, clinton, 364. Granted, those were the course of two terms. Again, reagan takes the prize. If you go back further, the biggest order of executive orders was, get this, harry truman, who between 1945 and 1953 issued 8906 executive orders. Successfully challenged when he placed all steel mills in the country under federal control because he failed to act to further a law congress had already passed and instead is to his own policy. The Supreme Court invalidated the move which is so concerned about the idea of the president making lot about guns and gun ownership. We know obama has never been a fan of guns. Remember his statement about people who cling to their guns and religion . That was not a compliment. It was an insult. The idea that the president would car back freedom, set aside in the constitution is simply ridiculous. Any reconsideration of gun laws that would impact the nearly 80 million gun owners in this country should occur with all our elected representatives, not just one. The nation elected him president , not king, not sark. Lets do things the oldfashioned way, democratically. That is what i think. Drop me an email, gerri foxbusiness. Com. Coming up on the willis report, is this a real business or a pyramid scheme . We would get to the bottom of one Global Management weightloss companies during a debate. And could his nomination as the next treasury. I considered resending my offer to appoint him. Covering the rollercoaster handwriting and if it is the worst signature ever. Also, should you spoil your kids or give them tough love . Hear how millionaires are raising their youngsters according to a new survey. We are on the case next on the willis report. [ male announcer ] how could a luminous protein in jellyfish, impact Life Expectancy in the u. S. , real estate in hong kong, and the optics industry in germany . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 75 of our mutual funds beat their 10year lipper average. T. Rowe price. Invest with confidence. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. With investment information, risks, fees and expenses you know it even after all these years. But your erectile dysfunction you know,that could be a question of blood flow. 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Ask your doctor about cialis for daily use and a 30tablet free tal. [ male announcer ] how do you make 70,000 trades a second. Reach one customer at a time . Or help doctors turn billions of bytes of shared information. Into a fifth anniversary of remission . Whatever your business challenge, dell has the technology and services to help you solve it. Gerri a company that sells nutrition and weight loss product being called a giant pyramid scheme. Details in 60 seconds. Dont go away. Gerri is herbalife, the multibillion Dollar Company it sells nutrition and weightloss products by word of mouth, preying upon the very people it purports to help . Company ceo house swinging after a Hedge Fund Manager claimed the company was the best managed pyramid scheme in the history of the world. Joining me now, columnist for dow jones newswires. Good to see you. Long time no see. Is this company on the verge of collapse . Ha. No, absolutely not. What he is saying is this company derives most of its revenues from recruiting people, people recruiting people rather than selling products i havent seen any solid numbers that shows exactly how the company gets its revenues and thats still up in the air. Gerri the ftcs to get only 9 percent of the server is make gross compensation. The numbers arent that big for individuals your mom and dad sell their products to one. The Company Called holiday magic the ftc said it down. What i was trying to say is that these things have been around for a long time, jerry. Some of them are sustainable like tupperware. Others are, you know, flash in the night. What they do is they did you cannot recruit your friends. Gerri here is. Net sales. This is no small company. Very, very big. They had a lot of success. It sells weightloss supplements virtually all of the planet. You know who i am wondering is the bad guy and all of this, short sellers do not have a good reputation. And William Hackman is out there saying his company is going down. Interesting is that nothing is company sang his stirring the wrong thing. A lot of people out there are saying, hey, this is not fair and is not true. What do you make of that . All those people are selling things you could buy walmart. The a shakes. How many claims are made about diet shakes and vitamins he wants to make money off of it. He says the money will personally making will donate to charity and he is out to expose the company. We can take that for what its worth, but in some ways shortsellers are gods messengers that all is not right with the world. Nobody likes a spoiler, and they come in and spoil things. I dont know if this company is going to be deemed a pyramid scheme by the ftc. That is what he is getting at which is a pretty bold bet. One thing to say this is as Lucky Company based on aggressive sales, and that think it is apparent scheme, but hes saying this stock is going to zero. [talking over each other] gerri let me read a comment. We are confident there will be a legitimate company with legitimate customers. Out swinging. It has gone down a line as of multilevel marketing company. And no one is complaining about avon today. Or to borrow or amway. He confined companies to do well and others to pay a lot of money for inventory and could not sell it. Not everyone is a salesman. That is what it comes down to. Gerri thank you for coming on. Appreciate your time. All right. Does president obama have the authority to raise the debt ceiling without congress . Will he tried to . Our handwriting expert is digitalis about the most talkedabout signature. Will it end up on our dollar bill . Can you read that . From that fox business studios in new york city, its the willis report with Gerri Willis Gerri as the debt ceiling showdown, members of the Financial Services round table now headed by former gop president ial candidate temple in tay are urging congress to raise the debt ceiling. Failure to do so will cause a wire. Will republicans caved . Always great to have you on this show. What do you make of this . These and other Business Leaders of this country who are saying, you have to raise that debt ceiling. A little hypocritical. These Business Leaders of the same ones to say we have to do something about our enormous debt, and what will cause a wire to our nations finances continuing to go around borrowing a trillion dollars year after year after year. The phony issue, people are saying if we dont pass the debt ceiling its a default. That is off the table. The constitution prevents a default on the national debt. Revenues come in even after we pass you know, past the date which we have not passed the debt ceiling. What it means is it is more like a government shut down, not a default on debt. And shame on the media and people. Gerri there are other things that are bad that may happen like a selloff in the stock market. The last time we tested this result of 2,000 points in the stock market, and i think that is what they are reacting to. They dont want to see that happen again, and they dont want to see executive to five executives across the country tie up the purse strings. I think they have practical considerations. What i want to know is if you believe that it would be a mistake to test cutting spending by holding off on this debt ceiling issue. Thats a tough call. I do believe in the rule, and you know it, every dollar of increase in the debt should be tied to a dollar of spending cuts. This is, i think, a financial emergency we are facing, and i think that is very commonsensical, and of the president rejects that, then who is responsible for not raising the debt ceiling . The congress or the president . I guess what i am saying is, lot of this will be determined by public opinion. As the public wants, a blank check to increase debt . If so, that is what the president will get. If they say, this is a real problem and we wont give him a blank check and an unlimited credit card in demand some spending cuts. I am not sure politically how this will play of, but i just dont think the republicans are going to give the president that. Gerri you know, 1 of spending for 1 of tax cuts rule, but he could not keep that rule when he passe