Ok, before I even start this, I’m going to get sidetracked a little: why do we have a special term for home loans? Don’t bother quoting me the etymology; I’ve already looked it up. We don’t have a special term for an auto loan. Should we have a cartgage? Whatever, I just don’t really like the word.
The conventional wisdom is that the mortgage crisis is impacting the poorest the most. Conservatives attribute this to irresponsible people taking out mortgages that cost them far more than they could really afford. Never mind reality, that’s too difficult a concept for their ilk to grasp. But as for the basic idea that the poorest have been hit the hardest, that’s pretty much been accepted by everyone. Which is why this article in the NYT is a bit of a shocker:
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.
Pretty wild, huh? Even I’m surprised by that one, although I guess it makes sense. It’s just that people who do that kind of thing are usually so ostracized by society that we don’t expect people to just walk away from a debt like that. I guess that should remind us who holds the real power. My advice to all you people being crushed by your home loan: do the same thing! Bravely run away from that which is ruining you! (I say this as a confirmed renter). Anyway, I’ve mostly got nothing to add to that. Take it for what you will.
