The rich bail on their mortgages more than the poor

"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.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent."

http://www.nytimes.com/2010/07/09/business/economy/09rich.html?_r=1&src=me&ref=general

i doubt dodd and frank forced banks to loan to these rich delinquents

 

Well now. That excuses the whole Fannie Freddie debacle.

Here's a Chris Dodd gem for you:

In a bid to stem taxpayer losses for bad loans guaranteed by
federal housing agencies Fanny Mae and Freddy Mac, Senator Bob
Corker (R-Tenn) proposed that borrowers be required to make a 5%
down payment in order to qualify. His proposal was rejected 57-42
on a party-line vote because, as Senator Chris Dodd (D-Conn)
explained,

"Passage of such a requirement would restrict home
ownership to only those who can afford it."

 

it seems like you are dodging the issue, but im sure you wouldnt do that. you just forgot.


i will address your point to show you how its done.

whats the context of the quote? specifically, what is "it" that dodd was referring to? if "it" is a home then thats a stupid thing for him to say. if "it" is the down payment, then thats a difference in policy.

about the 5% down payment, i dont see how having people make a 5% down payment will help them stay in their homes. in fact it would hurt because they would have less reserves to pay monthly mortgage. it wouldnt save the banks or gov any because they would get that money from the lendees anyway since the poor dont often bail on their loans with much money left in the bank. perhaps requiring a down payment would have better vetted applicants for those that could afford the mortgage, but that just shows the lenders arent very good at vetting.

 

I won't dodge the issue but let me say that my neighbor isn't rich, he works at UPS and is a union member who works for Safeway.
He is a Democrat and voted for Obama.
I talked to him the other day and he is talking about bailing on his condo here in Denver.
He like myself is upside down on his unit, $40,000 upside down.
He has tried to work with his mortgage company to refinance and feels like he is getting nowhere.

Common sense tells me the following.
A lot of rich people are smart and make wise investments and choices or they would be poor.
Rich and the middle class can afford to bail on their homes because they have enough cash flow or ability to do so.
Poor people don't have this option, much like those in New Orleans after Katrina, they didn't have the ability to leave.
I see no problems with people making wise financial decisions.
You have to look no further than government for some of our misery, unintended consequences is a bitch.
I don't see what the big deal is here?
Why should anyone stay in a upside down home?

 

snopes.com: 5% Downpayment Quote

Snopes has that quote as false since it comes from a satire site (Semi-News), but what Chris Dodd actually said wasn't that different in my opinion. The actual quote from that debate (according to snopes) was "It would have disadvantaged home buyers who had good credit and solid incomes but lacked cash to make required down payments.".. Well, even if this is accurate, isn't that essentially the same thing? In this case, even if the quote is inaccurate, the concept and way of thinking are very, very real.

I'd be interested to know what Dodd meant by good credit and solid income... Is that a 600 score and a household income of $35k a year? Or is it 800+ with a household income of $100,000 a year? Because chances are, the latter of the two has the means to save up a down payment more times than not. The first does not.

The way I see it, if you have great credit and a solid income, it shouldn't be a problem for you to save up a down payment for a house. It just takes time to do, just like any goal.

The problem is, like with so many other things people want it NOW and the easiest way possible. Even if that means a stupidly high house note that they can't afford, which is usually a result of purchasing a house with nothing down. When they can't have their way they claim the system is broken and they're being left out or discriminated against because of their financial status.

 

Coming up with a 5% down payment shows that the buyer probably has a job and has an inking about saving money.

Lenders weren't allowed to vet. That's the problem.

As for Dodd, he's talking about the down payment proposal and he's an idiot.

 

what i don't understand is why the mortgage companies won't work with people? how is it in everyone's best interest to forclose and then sell at a lesser price, which could take just as long?

 

For once I dunno?
I have read and heard Snopes was founded by liberals but I get conflicting information.
Don't take everything at face value but I had to post this link!opcorn:
Snopes - Encyclopedia Dramatica

 

Yeah, you're gonna get that with any source of info. If I post something that conservatives agree with, then a liberal is bound to tell me it's from a right-wing nutjob site and is inaccurate. If I post a fact that supports a liberal's point of view, then some conservative will say the source is no good because it's from a liberal rag. You know the routine.

As for Snopes, I agree with them on some things, and I disagree with them on others. That's why I referenced the original quote and posted what I thought about Snopes' assessment of it. I'm sure someone will be along to tell me how wrong I am.. lol

 

i didnt put anything down on mine because there was little benefit to it and i havent had any problems. but they should show the ability to pay--you know, monthly payments no greater than 30% take home, good credit, stable job. ive got no problem with banks requiring a 5% dn payment though, i just dont think its that big a deal.