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Biggest Defaulters On Mortgages Are The Rich - U.s.

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

No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

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.

Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

I wonder how many of these home owners are really rich?

Still I'm sure the losses on these properties have been factored into the banks balance sheet and it will all be contained.

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of course, having a large "asset" like a house makes you rich....the loan? who cares.

Schroedingers Fat Cats the lot of them.

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Further to this, flicking through the news channels I caught the end of an article about bankers appealing to people NOT to walk from their mortgages....ON MORALITY GROUNDS...

cheeky ticks they are.

dont do as I do, do whats good for me.

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we had this 'strategic default' discussion a while back. Im sure they wanted to change the law to stop you and we had good 'business mens' opinion on the morality of strategic default.

Sure some big bank did it with a canary wharf property or similar

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we had this 'strategic default' discussion a while back. Im sure they wanted to change the law to stop you and we had good 'business mens' opinion on the morality of strategic default.

Sure some big bank did it with a canary wharf property or similar

Its business..not morality.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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