What We're Hearing

It should be of no surprise to anyone, really, that the national loan delinquency rate on all residential loans is 13%. As most mortgage bankers know, employment drives the housing/mortgage market and until the unemployment situation improves for real -- as in real and massive hiring -- there will be no tangible relief. The Obama Administration's 'Making Home Affordable' progam has been a bust (more or less) not because it's necessarily a bad program but because I sense consumers aren't even bothering to use it and servicers are smart enough not to 'mod' someone into a loan that's going to fail within six months. So how do we solve the delinquency/unemployment problem? Answer: Have all profitable businesses pledge not to lay off workers no matter what. If you need to cut overhead go with a salary reduction plan where all workers -- including management -- have their pay cut. A 10% cut in pay is better than having no job at all. (And it would prevent more loan delinquencies.) Meanwhile, in the La Jolla area where I'm on vacation assignment homes sell for $10 million on the cove. No insurers will write a policy on the homes (so my tour guide told me) because within the next few decades many more multi-million dollar abodes could fall into the water. The cliffs are unstable. Still, you can't beat the view...