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.
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.
“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Sooner or later, this kind of thing is going to start mattering to ordinary people, and all the shushing and how-dare-yous around the subject of so-called “class warfare” is not going to have the effect it usually does. This is a moral scandal as well as an economic one. People don’t mind others getting rich, as long as they believe the rich are playing fair (incidentally, a colleague of mine was telling me only yesterday about a study that found Americans are unique in the world in having this attitude). I think that attitude is one of America’s great strengths, because it blunts the vice of envy.
But if you rub people’s noses in data showing that wealthy people are gaming the system and not doing their fair share, things may change. In this way, wealthy people undermine one of this nation’s moral (and economic) strengths: the conviction that individual prospering is something to be welcomed. This data, and the “ruthless” quote, suggest that the wealthiest people are much less sentimental about their moral obligations to pay their debts than most of us are. Like I said, sooner or later… .