CRA. Fannie. Freddie. Coup de grâce.

July 9, 2010 4:00pm by

Barry recently referenced a fascinating story by David Streitfeld in the NY Times. He beat me to the punch on it, but didn’t cover some aspects that I thought were noteworthy.

Here’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 — but won’t — be the final nail in the coffin of two arguments:

The Community Reinvestment Act was the cause of all our woes.
Fannie and Freddie were the cause of all our woes.

It’s highly unlikely — if not outright impossible — 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.

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/

We’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/

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client. References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers Please see disclosures here: https://ritholtzwealth.com/blog-disclosures/

twitter

facebook