What We're Hearing

If the TV show '60 Minutes' finally gets around to doing a story on "strategic" (mortgage) defaults then it must be a fading issue. Don't get me wrong, 60 Minutes is one of the best news shows on television, bar none, but it's usually behind the curve when it comes to financial stories. And I admit that I only caught a few minutes of its piece this past Sunday but one message should hit home to the mortgage industry: Defaulting on your home mortgage is not a "face losing" event like it was during The Depression of the 1930s. Heck, I fully expect that some mortgagors might be having "strategic default" parties in the homes they are about to abandon, especially in party towns like Las Vegas. I mean, why not? Of course, it appears the delinquency picture is looking brighter. But rest assured, loan defaults are driven (mostly) by one thing and one thing only: employment. And on that front the news appears to be improving. According to Barclays Capital, the 'Job Openings and Labor Turnover Survey' (JOLTS) showed increased hiring in March, with the hiring rate rising to 3.3% of total employment from 3.1% in February, the highest since October 2008. The job opening rate (openings divided by the sum of openings and employment) held at 2.0%, but Barclays says, "the details were more encouraging, with increases in all industry categories except accommodation and food services"...