CRISIS IN U.S. MORTGAGE CREDITING SPHERE TO HAVE NO IMPACT ON MORTGAGE SYSTEM OF ARMENIA

ARKA News Agency, Armenia
Aug 27 2007

YEREVAN, August 27. /ARKA/. The crisis in the mortgage crediting
sphere of the United States will have no impact on mortgage system
of Armenia due to lack of two fundamental contributing factors,
Director of Association of Mortgage Market Participants of Armenia
Vardan Petrosian said. According to him, two fundamental contributing
factors lack

"Financial markets of Armenia and USA are not mutually integrated that
much; besides, mortgage sphere in Armenia has no system importance
to the financial market for the time being," he said.

Petrosian also added that mortgage gains importance in the country
gradually and "it is natural to suppose that the sphere will be of
key importance after some time".

According to him, the situation on the U.S. mortgage market is one
of the occasions and opportunities to gain experience and education.

"The mortgage crediting market of Armenia takes its first steps in
the way of development, and this is a good opportunity to study the
experience of other countries and learn lessons", he said.

In spring 2007 crisis occurred on the U.S. mortgage market due to
inability of mortgage borrowers to pay off the credits. As a result of
mass defaults of American borrowers the ratings agencies overestimated
the ratings of more than 1,000 issues of mortgage bonds for total of
$12 bln. Fifty companies went bankrupt in USA.

As of June 30 2007, the volume of mortgage credits allocated by the
Armenian banks reached AMD 35,159 mln, thus increased by more than
two times over the year (AMD 17,026.0 mln as of June 30 2006). Over
the same period, the mortgage credit portfolio of credit organizations
reached AMD 3,067.7 mln against AMD 711.4 mln in the year before. ($1 =
AMD337.12).