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Companies Assess Economy's Impact
(Michael Nagle - Bloomberg News)
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Let me use Florida as an example, and I'll be blunt about this. Florida is very over-built. It will take a long time to correct. Values continue to fall and delinquencies continue to increase, hitting 232 basis points in March, up from about 160 basis points in December, and up from 49 basis points a year ago. We are attacking this problem with three main strategies. First, we are making sure every delinquent borrower is contacted and offered a work-out.
Secondly, we are performing underwriting reviews on defaulted loans and if the loans were not underwritten to our guidelines, we will require the servicer to buy them back or make us whole. And third, we are pursuing deficiency judgments against investors and second-home borrowers.
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Arne M. Sorenson, above, chief financial officer for Marriott International, summed up what many firms expressed.
Our philosophy in an environment like this is very simple. While we cannot make our lodging business immune to a weaker economy, we can strive to outperform our competitors.
Staff researcher Richard Drezen contributed to this report.
