The bustle in a house

I'll be the first to admit that a lot of what gets posted here is only tangentially related to classical music. But, then again, there's a lot of things going on in the world that only seem tangential. Here's an example: subprime mortgages.

Subprime lenders offer mortgages to borrowers with poor credit, typically financing the risk with higher interest rates, penalties for early repayment, and such practices as balloon payments (at the end of a fixed period, the balance of the loan has to be repaid or refinanced). The subprime market has been in trouble lately, with a host of companies going bankrupt in the wake of a rash of foreclosures on adjustable-rate mortgages too freely given out during the housing boom a few years back.

Yesterday, Toll Brothers, the country's largest builder of luxury homes, announced that it would not meet earnings expectations this year. You might wonder why a luxury home builder, whose clients presumably have good credit, would be affected by the subprime implosion. It turns out that the crisis has rippled throughout the entire mortgage industry, with lenders tightening up credit and income restrictions across the board, making it harder for anybody to buy. There's also a domino effect: most people buying luxury homes are upgrading, which means there has to be a middle-class buyer for their previous home, which means that home needs a buyer, and so on down to the base of the pyramid. If first-time home buyers can't get into the market, the owners already in the market can't move up.

Now, if you're wondering where you've seen the Toll Brothers name (and their ubiquitously trademarked America's Luxury Home Builder™ slogan) before, they're the company that took over as lead corporate sponsor of the Metropolitan Opera radio broadcasts in 2005. The initial agreement only guaranteed support through 2009, however; think the mortgage market will recover by then? Or will Peter Gelb have to start passing the hat like Joe Volpe did after Texaco bailed?

In the grand scheme of things, this is just a blip, and you could certainly make the case that the future of the Met broadcasts is on satellite radio and the Web anyway. But it's a reminder that, no matter how far away an issue may seem from the everyday work of music-making, there's often a more direct connection than there first seems.