mike thorell is president of pinnacle bank in scottsdale, a community bank with one branch. half of its lending is to small businesses. the other half to home buyers. >> i would harken back to the days when i started in banking it took a real highly, highly qualified person to get a 5%, 10% down mortgage were there, and maybe more. >> reporter: thorell says that local and regional lenders are stepping up in the absence of aggressive lending by the mega banks. >> it now has been very clearly represented that you got to be careful. and you see a lot of the national lenders not fully embrace coming back to the state to make loans and if they are coming they're being extremely careful. >> reporter: another factor are arizona laws preventing banks from going after homeowners for any money owed on a home after its been foreclosed on and sold. but mortgages are not a factor in many housing transactions in the phoenix area. 40% of homes sold here are being bought with cash, even as median prices have turned higher. last summer, phoenix median home prices fell to $108,000. in februar