Perhaps as Fitzgerald and Hemingway are said to have once discussed, the rich are different than you and me.
“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” said a University of Arizona law professor in a New York Times article who has studied strategic defaults.
Yes, they have more strategic options.
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.
It’s simply a strategic default option for the wealthy that can walk away unscathed from something sour, unlike the other people that are susceptible to shame and fear mongering used by the government and banking industry.
I wonder if this strategy might strike some bankers as an option above the law. Nah, at a certain level all the rules change, this is America 2010.
But how does all this trickle down?
It’s not surprising, as the well-to-do enter the game with vastly more options, play the game with vastly more options; so why wouldn’t they exit the game the same way?
Despite sneers by the extreme right that somehow the wealthy and powerful are “carrying” the poor, I believe the truth is quite the opposite. It is the vast underclass, the laboring class and the consumers from those classes with the fewest value options, who create wealth for the privileged who jealously guard the top of the anthill. Those few are primarily engaged in manipulating numbers rather than actually being productive.
The wealthy have the resources to game the tax laws, buy political influence, choke-off upward mobility, and name their own terms for just about everything else.
How many of these wealthy mortgagees have a fallback home to go to that the rest of us can’t even imagine owning?
down with the landlords!