Friday, July 09, 2010

Wealthy walk away from mortgage obligations in droves

I'm sure you'll be shocked to learn that wealthy people are walking away from underwater mortgages in far greater numbers those "other" people who only got their homes because ACORN bribed Barney Frank to force Fannie and Freddie to give them mortgages or whatever the current conservative narrative is about the 08 meltdown these days. And of course it was "them" and not the unmitigated greed of the wealthy class that caused the meltdown.

Not that anything will ever dislodge that myth among the conservative cultists, but for the fact based among us, NYT's latest study shows one in seven mortgage holders in the million+ range are in default while only one in twelve in low end mortgages are deliquent. This, of course, may have something to do with the fact that the high end crowd is walking away from second homes and investment properties. And even among pure investors, "The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent."

Of course, it's not that the wealthy can't afford to keep up the payments, they're walking away because they've already drained the equity out of these investment properties and aren't getting any return anymore. But hey, it's good to be rich. If a man steals a loaf of bread because he's hungry, they call him a thief. If he is able to steal millions because he's well connected, they call him a good businessman.


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