Gayle in MD
10-07-2010, 01:28 PM
CRA. Fannie. Freddie. Coup de grâce.
By Invictus - July 9th, 2010, 4:00PM
Posted By Invictus On July 9, 2010 @ 4:00 pm In Credit,Current Affairs,Data Analysis,Economy,Real Estate | Comments Disabled
Barry recently referenced [1] a fascinating story by David Streitfeld in the NY Times [1]. He beat me to the punch on it, but didn’t cover some aspects that I thought were noteworthy.
<span style='font-size: 14pt'>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.</span>
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.
<span style='font-size: 14pt'>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.</span>
http://www.ritholtz.com/blog/2010/07/cra-fannie-freddie-coup-de-grace/
By Invictus - July 9th, 2010, 4:00PM
Posted By Invictus On July 9, 2010 @ 4:00 pm In Credit,Current Affairs,Data Analysis,Economy,Real Estate | Comments Disabled
Barry recently referenced [1] a fascinating story by David Streitfeld in the NY Times [1]. He beat me to the punch on it, but didn’t cover some aspects that I thought were noteworthy.
<span style='font-size: 14pt'>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.</span>
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.
<span style='font-size: 14pt'>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.</span>
http://www.ritholtz.com/blog/2010/07/cra-fannie-freddie-coup-de-grace/