CNBC's Diana Olick looked at the numbers in last week's Times story about ruthless, heartless rich people defaulting on their mortgages and found out that they were a little misleading. "Here's my problem with the thesis of this article: A little less than 14 percent of the loans outstanding in the U.S. are "jumbo," meaning over $417,000, according to government statistics (FHFA). The number of loans that are over $1m are even less than that. So when we're talking about rates of default, you have to factor in the share of the market that you're looking at and the bottom line numbers. Yes, the rate is higher, but it's a far smaller share of borrowers, and that makes the numbers far more volatile. And we're not talking about the super rich here. We're likely talking about those in the one to two million dollar homes, because the super rich don't deign to deal with such banal items as mortgages. And when we look at investment homes, of course the more expensive ones will default at a higher rate, because the equity lost will be far greater, with the original investor further underwater; that then makes the time horizon for recouping that investment too long for anyone, rich or otherwise, to stay in the game." [CNBC]
Most Viewed Stories
‘I’m No Longer Afraid’: 35 Women Tell Their Stories About Being Assaulted by Bill Cosby, and the Culture That Wouldn’t Listen
McDonald’s Prepares to Finally Give Everyone All-Day Breakfast
Jon Stewart Told Wyatt Cenac to ‘F*ck Off’ When He Was Challenged About Race
Why Lonely People Stay Lonely
The Best TV Shows of 2015 (So Far)
How Exactly Did Ant-Man Make Michael Douglas Look So Young?
What Open Marriage Taught One Man About Feminism
A Neuroscientist Argues That Everybody Is Misunderstanding Fear and Anxiety
New York Times Discovers Bleakest McDonald’s Ever
Are You a Head Person or a Heart Person?