Biggest defaulters on mortgages THE RICH

[editec]

Except most middle class people had no equity in their homes. With zero downpayment options, or at most 5% that could be borrowed and given on seller seconds etc they had nothing in them. Frequently it was more advantageous to walk away from the house (the term du jour for sending your keys is "jingle mail") and rent more or less the identical house down the street for less money per month.

homeownership has long been the hedge against inflation, which renting does not assume Rabbi.

~S~

Huh? So what?
Actually a study by an economist I saw referred to asked the basic question: DOes encouraging home ownership among working class people actually help them? The answer was no.

I'd like to read that study.

 

[Mini 14]

But the issue at hand was why were more purchasers of very expensive homes walking away than purchasers of modest homes, was it not?

And my post, which you largely didn't bother to comment on, addressed THAT issue, lad.

A larger percentage, not a larger number.

And I would assign a good deal of that to the smaller pool of people eligible to buy $1,000,000.00 homes (if 10 qualify, and 2 default, that's 20%), and the fact that banks tend to go after bad loans of millions of dollars more vigorously than they go after bad loans of $100,000.

 

[The Rabbi]

homeownership has long been the hedge against inflation, which renting does not assume Rabbi.

~S~

Huh? So what?
Actually a study by an economist I saw referred to asked the basic question: DOes encouraging home ownership among working class people actually help them? The answer was no.

I'd like to read that study.

It was a female PhD candidate at U of Wisconsin, or something like that. My memory is hazy about it. Basically she pointed out that owning a house ties working class people to a particular area. When they lose their jobs they are not free to move around to get a better job. So the house is like an albatross.
It asked a question that should have been obvious: Does this really help people?

 

[Terral]

Hi Big Fitz:

I must agree with the Topic Starter that most of you will simply not understand the true nature of this Economic Financial Meltdown Crisis ...

Well this is a highly suspicious conclusion. I take it more of a sign of EVERYONE who bought too much house is defaulting. The rich just are defaulting later as their 'on paper' wealth evaporates.

The Foreclosure Crisis has very little to do with people buying too much house! The #1 reason that American Workers are loosing their homes to foreclosure is:

1. Worker Displacement.

Most of you have no idea about what these two words even mean, because everyone wants to look at the banks and sub-prime loans and everything but the 'real problem.' There are many contributing factors leading to the massive unemployment problems facing the USA, but "Worker Displacement" is the primary culprit from:

A. Too many goddamned Americans 'hiring' too many goddamned Illegal Aliens.

Just one Illegal Alien Foreign National sneaks across the border to 'displace' just one American Worker from his JOB, which means the same American Worker must go out and 'displace' another American from his JOB in an ENDLESS cycle. Americans have foolishly allowed far too many Illegal Aliens to simply devastate the local JOB markets, while at the same time our corrupt politicians try to make them all LEGAL through Illegal Amnesty.

B. NAFTA Offshoring of the U.S. Manufacturing Base to 'displace' U.S. Workers from JOBS.
C. Outsourcing of JOBS to all corners of the earth using cheap foreign workers to 'displace' American Service Sector Workers.
D. Twenty-three (23) Guest Worker Programs that bring in 1.5 MILLION Foreign Nationals to 'displace' American Workers from JOBS.

Of course this makes Avatar correct in saying, then they weren't that rich. I'd add the words "anymore" to it.

Listen here, Big Boy! The rich people in the USA cannot help it if corrupt govt politicians allow American Workers to be 'displaced' from JOBS, so that fewer and fewer 'American Workers' can afford to make house payments. Illegal Aliens live 20 and 30 people in one house, which 'displaces' local American Workers from JOBS, which means those American Workers cannot afford to make house payments and pay their taxes to support the local Tax Base. Rich people know very well that the value of their mortgage-backed security portfolios is based upon the ability of their tenets to pay 'and' those tenets are going into foreclosure and bankruptcy in record numbers; because the corrupt politicians in Washington, D.C. are only making matters FAR WORSE. If the value of your rental properties sinks below the mortgage amounts, because of Govt Corruption and Stupidity, then logic says to leave the keys on the counter and STOP dumping good money after bad. Period!

The rich defaulting does not change the fact that Freddie and Fannie have destroyed this economy.

No! Freddie and Fannie represent 'symptoms' of Govt Corruption that allows 20 to 30 MILLION Illegal Aliens to run around loose EVERYWHERE 'displacing' U.S. Workers from JOBS. If fewer and fewer American Workers can afford to make offers on houses, for all the reasons above, the value of those houses will go DOWN as a basic rule of economics. The rich people are wise to dump their real estate holdings in favor of moving their resources into areas where wealth can be optimized for their posterity. You are watching the collapse of the American Empire through Govt Corruption, which is the reason we see the vast disconnect between Washington, D.C. and We The Sheeple ...

The question is: When will the idiot day traders figure out that America is going down the tubes ...

GL,

Terral

 

[boedicca]

One wonders how much the pending Obama Tax increases are exacerbating this situation.

Next year, marginal rates will increase, AMT will get worse, and more deductions will be reserved out. All of this probablu results in some people, who can currently afford their mortgage on their current income, being driven to the point of being so house poor that they see no reason not to walk away.

 

[Care4all]

The Republican failure to do anything about the looming real estate crisis:

Republican Congress Talked About Financial Reform, But Did Nothing

Republican Congress Talked About Financial Reform, But Did Nothing

And who was obstructing republicans from doing anything about this mess back in 2003 when even W saw there was a problem... Oh that's right... the Democrats.

And don't say that they had the votes to pass it... Your tardocrats in office have the votes to pass anything but yet you guys whine they're being obstructed like a bunch of old women in need of a few gallons of Activia and a bran muffin.

Me thinks you need to READ a little bit MORE than you have on the topic....go outside of your normal window, in order to find out the TRUTH....I know it is hard, it is even hard for me to do such, but it will only serve us well, if we do....because TRUTH TRUMPS ALL, even our own partisan views.

Politics is scummy and things happen behind the scenes that would shock us all!

FREDDIE lobbied REPUBLICANS to STOP Hagel's legislation to regulate them.....shocker huh? You blamed the Democrats for holding up this regulating of fannie and freddie when the Republicans is who had the POWER to do something. Freddie DID NOT lobby the Democrats with 2 MILLION DOLLARS, they lobbied the Republicans to keep them from bringing up the regulation.....WHO would have thunk it?

Freddie Mac lobbied against regulation bill - Business - U.S. business - msnbc.com

* -

WASHINGTON — Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.

In the cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by Sen. Chuck Hagel, R-Neb. DCI's chief executive is Doug Goodyear, whom John McCain's campaign later hired to manage the GOP convention in September.

In the midst of DCI's yearlong effort, Hagel and 25 other Republican senators pleaded unsuccessfully with Senate Majority Leader Bill Frist, R-Tenn., to allow a vote.

"If effective regulatory reform legislation ... is not enacted this year, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole," the senators wrote in a letter that proved prescient.

Unknown to the senators, DCI was undermining support for the bill in a campaign targeting 17 Republican senators in 13 states, according to documents obtained by The Associated Press. The states and the senators targeted changed over time, but always stayed on the Republican side.

 

[Gadawg73]

hate to break it to you, but if they are defaulting, they ain't that rich.

Nope, you are so wrong. I know as I am the consultant the banks hire to investigate this.
They STAY rich by defaulting. Do the math.
Default on an asset you hedged your $ on at a high appraisal rate. You borrowed against that at 125 % of asset value IN THE STRONG MARKET 3 YEARS AGO. You have the cash in pocket and now that asset is at 40% of the appraisal value where you have 125% of it in pocket.
You are judgement proofAS YOUR ATTORNEY advised you to do this.
Smart man lets the bank have that 40% asset and you HAVE ALREADY pocketed the difference.
That is what is happening in the real world and the rich are doing it in droves. When the house goes into bankruptcy they negotiate and LEASE another mansion.
Sorry to bust your bubble and awaken U to what has happened in the real world.

 

[Douger]

The crisis was caused by murkins wanting to be like their TV heroes.
My BIL hung himself since he could't afford to be a Murkin any more. 2 new cars,Harley, 100 grand remodel, new pool.....and got laid off.A ******* plumber with all that useless shit.
Rope is cheap.
Idiots.