According to the New York Times, the rich are defaulting on their mortgages at a greater rate than the rest of us:
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.
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.
Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.
“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
No doubt this means that stiffing the bank will soon become a patriotic act. Who knows, Congress may feel some pressure to rethink it’s bankruptcy position.Certainly there was no reason to let the riff-raff be able to do a cram down on their hovels, like the rich have always been able to do on second homes. But if this article is true, it puts the issue in a whole new light.
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