Barry recently referenced a fascinating story by David Streitfeld in the NY Times. He beat me to the punch on it, but didnâ??t cover some aspects that I thought were noteworthy.
Hereâ??s the money shot:
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.
This should â?? but wonâ??t â?? be the final nail in the coffin of two arguments:
Itâ??s highly unlikely â?? if not outright impossible â?? that CRA, Fannie, or Freddie to have had a hand in any of these now-sour loans. The CRA/FNM/FRE argument has been rebutted here and elsewhere more times than I can count, yet it has always refused to die. Now, perhaps, we can close the book on it and move on.
Unlikely, I know, but I can always hope.
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See Also: We're Moving On Up! To the Top! To that Deluxe"?. Balloon Juice http://www.balloon-juice.com/2010/07/08/i-cant-wait-2/
Weâ??re All Subprime Now And Forever Eschaton http://www.eschatonblog.com/2010/07/were-all-subprime-now-and-forever.html
Rich Defaulting on Mortgages At Highest Rate naked capitalism http://www.nakedcapitalism.com/2010/07/rich-defaulting-at-highest-rate.html
Jingle mail datapoint of the day Felix Salmon http://blogs.reuters.com/felix-salmon/2010/07/09/jingle-mail-datapoint-of-the-day-2/
Ruthless Rich Dumping Mortgages Outside The Beltway http://www.outsidethebeltway.com/ruthless-rich-dumping-mortgages/
Oh you donâ??t get itâ?¦â?clearlyâ? if it wasnâ??t for the economic collapse DUE to the cra/fannie/freddie crowd the â??poorâ? rich would not be suffering from a collapsed economyâ?¦.and would be able to make their paymentsâ?¦
rt
"Fannie and Freddie were the cause of all our woes"?
That's a "straw-man"? argument.
In any case, those who argue that Fannie/Freddie were only minor factors should at least be willing to take a position on the question of how many hundreds of billions of dollars we should be pumping into these entities.
It would be a contradiction to say that, on the one hand, Fannie/Freddie were minor factors, but that on the other hand, we should be pumping $500B+ into them.
Q: Does anyone here have a handle on, or a data source for, the relative loan volumes involved in these two classes of delinquent loans? How do the dollar piles for the two groups of loans compare?
Lets not dwell on the past. The whole mortgage market was a scam from 2002 to (still goingâ?¦).
My question is: What is to become of the GSEs?
Are they just another giant arm of the executive branch of the USG from here on out? Will they be recapitalized and spun out? Will they be scapegoated and liquified?
I have read no confident forward looking statements about this critical issue from any level of government since bailouts started. If you ever needed a clue that the RE drop is not done, then there ya go.
Agree with Gator81 that you would need to know the volumes for the two different groups to have any view on this pertaining to fannie/freddie/CRA situation and â?? to somehow get over the fact that the majority of bad assets in the system are related to fannie/freddie, due to their share of the market.
Always the appropriate videoâ?¦.
Bushâ??s Ownership Society:
http://www.youtube.com/watch?v=QYvtvcBKgIQ
Quote:
I believe in the American Dream, am the Decider, I have decided to use tax money to pump up that dream to create an artificial unemployment rate by providing money to build a bunch of homes at inflated prices that no one SHOULD have been able to afford.
WRONG! Many of the devout, church-going family-oriented mortgage-less individuals were in the RE business, and were victims of the CRA and Fannie Mae policiesâ?¦
â?¦and Barney Frank.
â?¦and Clintonâ?¦ oohhh that Clinton.
@Diderot
Thanks for the video. Great stuff. Interestingly, apparently not included at the Bush Library news archives. Fancy that.
Agree with Gator81 and Bomber Girl. This isnâ??t very useful without some more info. Come on BR, you know better.
~~~
BR: Which part of this escaped your eagle eye â?? the byline of Invictus, or the intro, where he references my early poist and me by name?
Reading comprehension skills are apparently not your strong suit . . .
Of course it was the fault of the CRA â?? the CREDIT RATING AGENCIES!
DL said:
â??It would be a contradiction to say that, on the one hand, Fannie/Freddie were minor factors, but that on the other hand, we should be pumping $500B+ into them.â?
From McClatchy:
â??Federal Reserve Board data show that:
* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law thatâ??s being lambasted by conservative critics.â?
See http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html
The big mystery to me-
Why were the big banks allowed to dump their subprime junk on Fannie and Freddie AFTER the subprime crash had started? Fannie and Freddie only had 17% of the crap up to that point. Does anybody have good info on this?
BR: Which part of this escaped your eagle eye "â? the byline of Invictus, or the intro, where he references my early poist and me by name?
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