Biggest Defaulters on Mortgages Are the Rich


So much for the “rich always having money”. The NYTimes ran an article on the default rates of the wealthy:

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.

However, the rich quote is here [pun intended]:

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.

So, let me get this straight. The poorer classes went through the “sub-prime” fiasco a couple of years ago. They had worse credit scores but keep paying as long as possible. The wealthy have high credit scores, yet stop paying because they are “ruthless” and can still pay. And the FICO score is defended by whom???

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