Big surprise that the messages to my Blackberry came quick and early, as the bosses read today's New York Times piece on how, "Biggest Defaulters on Mortgages Are the Rich."
The article is based on data from CoreLogic, a real estate analytics firmthat can run all kinds of great numbers. The data show that while one in 12 mortgages under a million dollars are delinquent, "more than one in seven homeowners with loans in excess of a million dollars are seriously delinquent."
Shall I wax on about how the rich care less about their credit ratings than the not-so-rich, or how many of these luxury homes are second homes that the owners don't really need, or how rich folks don't give a hoot about their communities and see these homes purely for their investment value?
Nah, I'd rather do a little math.
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.