Wealthy walking away from loans at higher rate then poor now

Post #329,345 by jay 7/9/10 3:35:17 PM Reply	Wealthy walking away from loans at higher rate then poor now http://www.nytimes.c...ml?_r=1&th&emc=th 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. By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent. Turns out the rich are quicker to dump their loans when they get in trouble. The poor and middle class have a lot more invested in their houses, both financially and in terms of their lives. Jay
Post #329,346 by drook 7/9/10 3:41:24 PM Reply	Different analysis Poor people have been brought up to believe bankruptcy is a moral failing. Rich people know it's just another financial strategy, one that might be the best option. -- Drew
Post #329,352 by Another Scott 7/9/10 4:00:19 PM Reply	I think bankruptcy is different. I'm sure it depends on the state, but I don't think there's any reason why you can't default on a mortgage, leave the house, have the bank take it, and get on with your life without declaring bankruptcy. http://bankruptcy.la...-Foreclosure.html Presumably the bank would try to collect various fees (like the balance on the mortgage) and penalties in addition to the house, though. Bankruptcy may be the smarter option (especially in Homestead Exemption states), but I don't think it's required. IANAL. Cheers, Scott.
Post #329,356 by drook 7/9/10 4:11:06 PM Reply	I was too specific People who think bankruptcy is a moral failing feel the same way about defaulting on a mortgage. They don't see it as strictly a financial calculation, which is exactly what it is for the other party. -- Drew
Post #329,350 by Andrew Grygus 7/9/10 3:58:49 PM Reply	Another possibility. A lot of those with mortgages over $1 million may be status seekers who couldn't actually afford that much in the first place, or people who expected to turn it over at a higher price before they ran out of money.
Post #329,546 by lincoln 7/13/10 12:50:56 PM Reply	Re: Wealthy walking away from loans at higher rate then poor This should Â but won't Â be the final nail in the coffin of two arguments: 1. The Community Reinvestment Act was the cause of all our woes. 2. Fannie and Freddie were the cause of all our woes. It's highly unlikely Â if not outright impossible Â that CRA, Fannie, or Freddie to have had a hand in any of these now-sour loans. The CRA/FNM/FRE argument has been rebutted here and elsewhere more times than I can count, yet it has always refused to die. Now, perhaps, we can close the book on it and move on. Unlikely, I know, but I can always hope. source: http://www.ritholtz....ie-coup-de-grace/ "Chicago to my mind was the only place to be. ... I above all liked the city because it was filled with people all a-bustle, and the clatter of hooves and carriages, and with delivery wagons and drays and peddlers and the boom and clank of freight trains. And when those black clouds came sailing in from the west, pouring thunderstorms upon us so that you couldn't hear the cries or curses of humankind, I liked that best of all. Chicago could stand up to the worst God had to offer. I understood why it was built--a place for trade, of course, with railroads and ships and so on, but mostly to give all of us a magnitude of defiance that is not provided by one house on the plains. And the plains is where those storms come from." -- E.L. Doctorow
Post #329,565 by beepster 7/13/10 5:20:44 PM Reply	Um, there is a nit here... one in seven is a pretty impressive number BUT...how many of those loans are there and what percentage of the dollar value are they in the overall default totals. My guess, pretty low. I will choose a path that's clear. I will choose freewill.

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