ltv we are looser. collateral is one come with lost all that equity. if we weren't losing collateral space, the credit box would be very, very tight. >> same question i posed to mark. people here are some of these things and they think oh, no, here we go again. fhfa wants to try to reduce the market, you know, i've a feeling you say that's the wrong way to think about this. so why is that the wrong way to think about this? >> so for people who have not had that much contact with director watt before, i think what you saw today was vintage. he both don't remember as much, but through his time in congress his first real involvement with housing was try to tighten lending standards. and for that he was roundly criticized ironically for constricting credit too much. he was the first sponsor of legislation, for example, to impose predatory lending standards on some of the practices that ultimate led to the crisis. and then at the same time he has been for brought access but only sustainable access. he very much believes that high rates of foreclosure are di

what i can say is we look across the early 2000 ltv's were more lax. the market really moves. put it back in ratio well below. that's actually the least handed it's in the press corps. that's where things over the time. in the air in the 2000's 12 percent of all our origination mom's hackers scores of six claman's. today it's. 3%. defined by the dread that betty -- ready in fannie. and not doing very much london. the reason gets back to what we started with. this is uncertainty about repurchased wears one the best ways to avoid a repurchases to avoid a default. or the best ways to avoid a default is make sure you have a credit or the bar or. the natural tension or all realize. the removal of uncertainty will create more comfort to delve further down that credit curve. we have to be careful in terms of knowing what is and is not a level. there we go. they want to try their reaches the market. you know, have a feeling you're going to say that the long-awaited think about this. so for people who have not had that much contact with director what before, what you saw today was vint

give someone with poor credit a high ltv, low no-dot loan with all the funky features, we'll call them financial innovation to be nice here, right? and say that's okay because the value of the asset backing it today will be worth more tomorrow than it was today, and so i'm good. and we sort of learned -- we never expected. there's a famous lehman brothers prospectus on a bond, and it goes through the details of their house price simulation, and it says there's this one possible path of houses going down 3-4% negative, and they showed if that happened, basically, most of the tranches of that bond would get wiped out because the it was a terrible pool of subprime loans. then they assigned a probability of less than 1% likely hood to that happening, so we're all good, right? you get back to the black swan conversation. we had what we now know -- once you have a black swan it sort of becomes white because it's known. so what's the next black swan? is the it a 60% -- >> interest rate shock? >> something like that. so, you know, we have to, you know, we sort of look at these things and say,

freddie and with the new moves by fhsa as we're moving down the credit card and looking for higher ltvs, the fact that banks can send right to the gses is better for shareholders and investors so we don't have to worry about a potential repurchase two or three years down the road. >> rick? >> all right. you know what? they have been in conservativeship since september of 2008. i think it's a sham that we can't get these reforms done, and i think an entity in covership taking a more proactive role. ed demarco wanted to shrink it. his successor mr. watt wants to expand it so we're going to have what sub prime part two and i don't even care if it works out. nationalization is not in the fabric of this country and in essence what the cut is describing with put-backs back to the banks and all the ratios being changed a bit is in essence the government underwriting housing. they have health care, they have housing. i think enough is enough. if housing can't stand on its own two feet and we can't move mortgages at 4.5%, there's a whole lot more wrong with the country than nationalizing and low