The documents have been signed, the moving van is fueled and ready to go, and our borrowers are mere hours from moving into their new home in Sacramento. They are first time homebuyers and the excitement in their eyes is undeniable. Then comes the call from our funding department; “we can’t approve this loan because your borrower is no longer employed”. What? You are mistaken; he is an engineer and has been with his company for over 10 years? This can’t be right? “I am sorry, his job was terminated today”.
As a mortgage loan originator in California, this is something I am becoming very familiar with. The Los Angeles Times noted last week the California jobless rate climbed to 12.5% in December (up from 12.4%) and is among the nations highest. To add salt to the already deepening wound, economist expect more job cuts as Gov. Jerry Brown tries to close our $28 billion budget deficit. Even gloomier yet is the prediction by the Business Forecasting Center at the University of Pacific, stating our unemployment rate will stay above 10 percent for three more years. Read the rest of this entry »