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[0:37] ..." them any -- So they're being very carefully here with the sliding real estate values and also the rising unemployment."...
[0:58] ..." the stakes -- bit of a stretch and and dependant upon rising real estate values which is not the case and longer so yet -- they're starting to disappear and where actually getting back to more. Fundamental"...
[2:27] ..." the tightening of credit is of those some of the reasons that mortgage rates have not dropped father. Then they have since the crime rate has dropped mortgage rates have not dropped that far."...
[2:37] ..." That's right the Fed has been lowering interest rates and that -- spread that that investors and lenders are demanding has increased. So even though -- the that the longer term treasuries are about where they where before the interest rates have crept up a little bit because lenders are demanding more or risk premium. To make those loans."...
[3:01] ..." no changes really expected we think the Fed is probably done lowering interest rates and the the the longer term rates which determine the thirty year fixed great -- looked pretty stable here so we really"...
[3:23] ..." thought that what was really -- the log jam now in the housing market is that mortgage rates have not dropped in in a way that has some people have expected seen other interest rates going down."...
[4:02] ..." completely evaporated a year from now. So they're waiting for deceive the housing market begins to stabilize then I think we have some pent up demand that make coming in"...
[0:00]" banks have to be more careful now and because the value the home realty buyers are going down which means that -- collateral values evaporate on slipped -- more careful in in their lending -- consumers what it means is that now they every down payment is required -- before they can get a sub prime -- and maybe not put any down payment on the property and also banks are requiring verification of income as it's so they can better sensibility out of the bar to repay. Making a loan as someone really can't afford the loan is really not doing them any -- So they're being very carefully here with the sliding real estate values and also the rising unemployment."
[0:45]" Does this also mean that some of these more exotic mortgages like you know and and -- on mortgage or the negative amortization mortgage these are starting disappear."
[0:58]" That's right to beat the stakes -- bit of a stretch and and dependant upon rising real estate values which is not the case and longer so yet -- they're starting to disappear and where actually getting back to more. Fundamental old fashioned banking where you actually require a down payment and they -- a credit check in compared vacation."
[1:17]" Now what boat. Consumer loans and other types of loans powers that."
[1:24]" Well anything with -- use home values is collapse hold good collateral is under scrutiny that would they also include home equity loans so there there are tightening up a bit on how much they're willing to lend in the home equity loan because the value of the properties are still going down. And we expect that they will continue to work to slide for the remainder of this year so banks are being cautious on that. Also high of food and fuel prices are taking a bigger bite out of consumers' budgets so it's much more difficult for consumers to work to repay. Loans and for that reason that some of the credit scores that are required are being raised."
[2:03]" so actually the the requirements for all types of loans are are going up."
[2:07]" That's right the consumer is definitely under squeezed not only from high food and fuel prices but also these -- the sliding value of their property and with rising unemployed but it increases the uncertainties so -- All types of consumer loans are being tightened."
[2:23]" John let me ask you it is this -- crisis and the tightening of credit is of those some of the reasons that mortgage rates have not dropped father. Then they have since the crime rate has dropped mortgage rates have not dropped that far."
[2:37]" That's right the Fed has been lowering interest rates and that -- spread that that investors and lenders are demanding has increased. So even though -- the that the longer term treasuries are about where they where before the interest rates have crept up a little bit because lenders are demanding more or risk premium. To make those loans."
[2:58]" so no change in that is expected."
[3:01]" Right no changes really expected we think the Fed is probably done lowering interest rates and the the the longer term rates which determine the thirty year fixed great -- looked pretty stable here so we really don't look for much relief fund the longer fixed rate mortgages."
[3:17]" The reason I ask that question is that I had a real estate agent Cole and and tell me that. He thought that what was really -- the log jam now in the housing market is that mortgage rates have not dropped in in a way that has some people have expected seen other interest rates going down."
[3:36]" That's perhaps partially true but what I I think he he we historically has dark are right no point mortgage is around 6% which is historically very cheap like don't think it's the lack of availability or there or that credit is so expensive but it's it's that buyers especially first time buyers are reluctant to buy. Of you don't want to catch a falling knife they don't want to buy a house put 10% down and find out that they're down payment is completely evaporated a year from now. So they're waiting for deceive the housing market begins to stabilize then I think we have some pent up demand that make coming in"
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