View Full Version : Blame The RICH, Not CRA NOT Fannie & Freddie

Gayle in MD
10-07-2010, 01:28 PM
CRA. Fannie. Freddie. Coup de gr‚ce.

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 didnít cover some aspects that I thought were noteworthy.

<span style='font-size: 14pt'>Hereís 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 ó but wonít ó 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'>Itís highly unlikely ó if not outright impossible ó 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>

10-07-2010, 06:08 PM
The 'money shot' is wrong on the facts and the theory. The rest of the population is headed for foreclosure at a rate of 1 in 5 but, more importantly, the actual number of homes facing foreclosure owned by the 'rich' is extremely small compared to the total houses in that unenviable position.

10-08-2010, 02:50 AM
The bottom line is that leftist policies have given us a culture where defaulting on debt has went from being considered shameful to being considered an entitlement.