We learn from author Mitch Joel that the days of networking in business are over, thanks to online social media.
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Jill: I'm Jill Schlesinger Editor at Large Ilyce: And I'm Ilyce Glink the Money Watch Real Estate Blogger. Jill: In today's Reality Check President Obama didn't have much to say about the housing market in last night's State of the Union. Why not? Jill: So Ilyce we had to sit through an entire speech, stay up late at night and one of the core issues of what brought the economy down barely got a mention. What's up? Ilyce: I don't know it was really disappointing. He spent all of maybe 30 seconds saying that there was going to be some vague mortgage help but hello you've got a loan modification program going on that's a complete failure. I think he should have spent a little longer than 30 seconds on it. Jill: Let's talk about that loan modification program cause I've been getting all of these notes all week that oh there's going to be a big announcement about the enhancement to making that affordable program better. First of all why has it been? What is wrong with it? Ilyce: I think there's a lot of a different reason why it's not working. One reason is that I think there's an issue between what the banks are able to do both on an accounting side and what their investors want to do with what the fed keeps saying they're supposed to do or what president Obama keeps saying. It's almost as if all of these people get in a room and they say ok we're gonna modify 4 million loans and only 100,000 loans have actually been permanently modified. Millions of people's credit has been ruined and so I think the mechanics of the program have not been transparent, not well explained, people are in a really bad state over it. Jill: We had over 2 million foreclosures last year we're going to have a couple million this year probably right? Ilyce: 4 million this year, there were almost 3 million last year. Jill: And so what can be done to stave off, if you Ilyce Glink were president and grand puba of the whole mortgage modification process what needs to happen? Ilyce: You know I think people need to get jobs. If you really want to solve the problem put people to work, then they're going to have income, then they're going to pay their mortgage because the last thing people want to do is foreclose and leave their homes. They just don't want it, it's a major uprooting of lives, kids lives get destroyed, you've got to change school districts. It's really a big problem. If you can't find a job for everybody in America which although that would be nice, full employment, then I think you have to be transparent about who's really going to get modified and who isn't. The idea that you're somehow saving these 100s of 1000s of people who've been put into temporary loan modifications that you're saving them $300 a month, well my experience and the 100s of people who have written with me not so much the case. So there has to be a little bit more transparency. People have to understand that the banks really don't have a financial incentive to modify their loans. They have a financial incentive to foreclose. Jill: So let me ask you something. If the president said last night in the State of the Union ok we're going to change the loan modification process and by the way we're going to force banks to actually approve short sales or cut principle balances would that do the job? Do you think again short of you with the Ilyce Glink jobs program what would really change this into a successful program the one thing that could be done right now to turn this thing around? Ilyce: The government has to from the top down to force the lenders to accept a massive principle reduction. If they accept a massive principle reduction and get these loans modified in a permanent way and not just a 5 year fix which a lot of these loans are in a 5 year fix plan which and then it bounces back up to where it was but if you cut the principle and then you write the permanent loan mods and you get people these super low 50 year low interest rates then you have a chance of making this work and otherwise not a prayer. Jill: Ok so this is the Ilyce Glink program. That is fantastic and that's your Reality Check. Thanks for watching.