Rich Are Biggest Mortgage Defaulters By Far- NYT study

[apples and oranges]

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1&hp

Why is this just coming out now? Everyone was made to believe that it was poor, middle class buyers who bought above their means and brought the economy down. :eyes:

[Lance_Boyle]

1. Now, DU, do we understand why bailing out these irresponsible fucks was a bad idea?

This place clamored to "keep these helpless foreclosure victims in their homes." I said all along the majority of those suffering brought it on themselves through greed and overextending their credit. Maybe now that it's *rich* irresponsible fucks we can all agree that taxpayers should not have to help them "stay in their homes?"

[disillusioned73]

2. You make a good point, sir Lance

[ljm2002]

9. It's easy enough to craft policies...

...that do not favor multimillionaire owners of multiple properties.

For example, you could start by limiting any homeowner bailout program to address only primary residences.

You could look at the homebuyer's net worth before crafting out a relief plan.

There is lots you could do without bailing out the rich.

Of course, given political realities, the chances of a really good policy in this area are pretty slim, granted.

[ljm2002]

12. So you've said all along...

...that "the majority of those suffering brought it on themselves through greed and overextending their credit"...

That doesn't make it true.

Please supply us with facts and figures that support your assertion that the MAJORITY of those suffering "brought it on themselves".

To me it sounds just like the old "welfare queen" canard. Sure, some people abuse any system. There are indeed crooks, and there are people who play the game only for their own benefit. On the other hand, there are many who play by the rules and for one reason or another end up getting shafted. You seem to be arguing that those people should not be helped because there are some who abuse the system.

Yet I do not see any similar argument being made for the bailouts of the financial entities, whose entire structure is just made for looting from the less wealthy to give to the more wealthy.

[ms.smiler]

3. The foreclosure crisis is the result of irresponsible lending, not

irresponsible borrowing.

Wall Street banks certainly didn’t discriminate – they scammed homeowners of all classes.

They had investor money to lend, so with no skin in the game and money to be made from fees and commissions, they sought any breathing person they could snag for a mortgage. The larger the mortgage, the more they made in fees and commissions.

Wall Street corrupted the real estate & appraisal industries and they created the bubble in real estate. Banks encouraged people to refinance and pull equity from their homes. They couldn’t and can’t make money off someone without a mortgage.

Loan originators sold defective mortgage products that were designed to fail.

Securitized mortgages were covered by insurance which paid 30 times the amount of the loan.

Wall Street actually makes more money from supposedly defaulted mortgages than from homeowners dutifully paying their mortgages.

And if Wall Street could tank the economy, they could also trigger supposed defaults within the group of homeowners with traditional 30 year fixed rate mortgages.

The more economic damage Wall Street creates, the more money they make. I think of it as cannibalistic capitalism.

Positioned between investors and borrowers, Wall Street banks scammed both the actual lender and borrower. Some investors, like the plumbers union in New Jersey have wised up to the scam and are suing. Some enlightened homeowners are also suing their supposed lenders.

How many borrowers wrote their own mortgages? None.

How many borrowers conducted the appraisal for their property? None.

How many borrowers did the underwriting for their mortgages? None.

How many borrowers had the authority to approve their own mortgage? None.

The responsibility for these mortgages rests with the loan originators and Wall Street who now maintains two sets of books on Promissory Notes.

The homeowner on the Main Street side isn’t supposed to know about the second accounting of their Promissory Note securitized on the Wall Street side.

Why should banks collect once on a mortgage if they can collect twice.

Wall Street gets the investors money, the equity and property of millions of Americans, TARP & TALP funds, plus insurance money.

And that is the result of supposedly irresponsible borrowers?

It was a bad idea to bail out the irresponsible banks, but it’s never a bad idea to support ordinary Americans.

Ordinary Americans across the country did not conspire to snag losing deals for themselves, instead; Wall Street banks conspired to strip equity and wealth from American homeowners.

[Missy Vixen]

6. I wish I could recommend a single post within a thread.

This post should have its own thread.

The "irresponsible borrowers" meme is being used to paint all borrowers with the same brush. Frankly, I'm sick and tired of reading it.

[ParkieDem]

7. I only partially agree.

No doubt that irresponsible lending led to this problem. But you can't have irresponsible lending without irresponsible borrowing, and policymakers (of both parties and at all levels) who encourage or at least facilitate the problem.

The housing bubble has almost too many villains to count. Obviously, the lenders, who wanted quick billions by selling securitized loans to investors. The bond insurers wanted in, too, as they never thought the risk of insuring these products would exceed the billions they earned in premiums. Then you have existing homeowners, who all too often used their paper equity to refinance and pay for toys and vacations they couldn't have afforded otherwise. Some first-time homebuyers got caught up in it, too, thinking the value of their home would never fall and that they could make a killing on a 5-year ARM. And let's not forget local governments, either, which stood to make a killing from enhanced property tax revenue.

[ljm2002]

11. You cite "existing homeowners, who all too often..."

"...used their paper equity to refinance and pay for toys and vacations they couldn't have afforded otherwise."

This meme is cited so often, I think it deserves some facts and figures to go with it. Would you happen to have any facts and figures to support this assertion?

The one figure that I am very aware of, living in Nevada, is that over 50% of homebuyers in this state are underwater -- they owe more than their mortgage is worth. I am one of that group, and yes I did make a down payment, yes I do have a fixed rate mortgage, no I did not take out any equity -- and yet now I'm at negative equity by about $80,000. Since I did not buy the house as an investment but as a place to live, and since I do like the house and the neighborhood, I'm staying put. But I have to admit, lately with all of this stuff about "strategic default" in the news, I sometimes wonder if I'm being sensible here or just being a chump. Because I could go buy more house for less money right now, let this one go, and have a lot more disposable income.

So I really want to know: are you claiming that most of the 50% in this state who are underwater just up and decided to live beyond their means? Please back it up.

[ljm2002]

10. +10000!!! n/t

[Octafish]

4. The rich are lousy tippers, too.

Why the monied are that way, I don't know.

[Tsiyu]

5. What does this mean?

I thought Gawd sed in the Bobble that rich people are rich because they know how to handle money wisely, so we should divert all of our tax money to them rather than using tax revenue to pay for hard-working and disabled people's health care and schools and such.


And the Bobble (and teabaggers) and Boner INSIST that we will just be BLESSED beyond our capacity to be BLESSED if we let the rich handle all the money the nation has.

So what does this mean? I am so confused.

Does it mean I ain't gonna get tinkled on ...I mean, trickled down on - this week, either? :crazy:

[SOS]

8. The article points out

that the rich are "ruthless" while the middle class who behave in the same manner are "bad citizens".

What an absolute farce.