Rick Lazio: “as the gentleman realizes, this problem was created not last year or 2 years ago or 5 years ago, but over 20 years ago…”

“as the gentleman realizes, this problem was created not last year or 2 years ago or 5 years ago, but over 20 years ago when the section 8 program was created. At that time the Federal Government, in its infinite wisdom to encourage people to invest in low-income housing and develop housing that moved away from public housing to a more appropriate blend of private and public partnership, created the section 8 program. Unfortunately, when they created that program, we ended up on both sides of the deal, so to speak. By that I mean that we guaranteed mortgages through the FHA fund at the Federal Government for 40 years, but we guaranteed cash flow through the section 8 program for 20 years to the owners. So we are on both ends of the deal. To the extent that we rachet down the annual costs to keep up the units precipitously, which I believe we all would like, I certainly would like to see that happen, we risked that certain of these properties would end up in default as owners simply walk away from them, because these loans are guaranteed 100 cents on the dollar by the Federal Government.”