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Anthony Sanders, George Mason University Finance professor, on the Federal Reserve’s take on the housing market.
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The recovery.
Anthony Sanders is a professor George Mason University.
You say that he.
To housing.
Is what do you -- let's put it this way do you agree with Ben Bernanke.
Well I agree that the data is showing some stability all house price indices application or have all -- went up a little bit last month.
-- rendering of the summer when house prices usually go up anyway but the role saying kind of work -- least bottomed out or trending upwards sales are going up.
There are some positive signs for the housing market he found a bit lukewarm if you will and where we are.
Well I'm very lukewarm because most of the housing recovery is taking place in New York Washington DC.
Beverly Hills and San Francisco and Russian help so it's it's a very.
Believe this upscale -- recovery but across the country it's not really that great.
How if you will describe for me the current mortgage market.
Who -- the most qualified lenders these days because that pictures totally changed since the financial meltdown.
Well.
I remember when they said fight -- score 660 was good not qualified you for a mortgage.
I just look at Fannie Mae's.
Recent MBS and the TBA market which is the mortgage backed security and the average.
Credit on those mortgages -- 771.
Step -- certainly one.
And average down payment is 31%.
-- afterward -- was seven point four trillion in the downturn in.
Borrower's equity and households.
I don't know -- Poses people are going to be -- that's really gonna put a lot down on the housing recovery so you're saying the lenders are are to risk averse right now.
Absolutely the water's really don't want to do you have Freddie and Fannie -- set.
-- -- requirements up in the upper seven hundreds.
And then each of the lenders has a credit overlay on top of that because they don't wanna get stuck with these loans they wanna -- -- -- Freddie Fannie Nelson -- vaccine yet everything still tight.
That's -- truly be.
And you know could be potential here too because they don't want another mortgage market meltdown so what is there -- ballots can can at a bar work.
-- find -- a good place right where borrower could maybe not meet the qualifications but is it.
The risk that you could've been back in the day to follow wears a sweet spot.
Absolutely -- coming this year.
Deathly since housing prices have -- stabilize and most of the country.
Now Fannie Freddie the FHA and the financial feel more comfortable but then I wanna -- I'll make loans of loans that are gonna our houses and -- dropped 30%.
So now they see some stability in the market they might -- easing the credit requirements.
But probably not too much on the down payment I doubt they want to go back to the 0%.
Or 5% down loans and in more.
But what we'll see is we should see some relaxing credit standards over the coming year.
Which will hope right and they can take -- get over these low mortgage rates right and then hopefully you can stir things -- get this industry rehabilitated across the board.
And not just in this key cities.
Well that's the problem Bernanke faces re added in that little.
If true.
There's even he knows that yet that -- pushing rates down so low and I'm not sure how much lower between Europe and what QE3 how much further gonna push those rates there.
But they're really not able to jump start the housing market because the credit side there just isn't the available credit and so it's.
-- it's a -- recovery.
At any standards thanks a lot -- lord.
