Quote:
Originally Posted by MarchHare
Does anyone have any stats regarding what percentage of mortgage defaulters during the housing bubble were low income versus middle class? I can't say for certain either way, but I seem to recall reading a story a few years ago that indicated that the bulk of the people walking away from their homes were middle class Americans with jobs who foolishly bought homes beyond their means (after the low introductory interest rate was jacked up).
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This article is from 2008 from housing wire which definitely has a mortgage banking industry perspective (bias). The article explains the results of a study of defaults from 07 to 08. The subprime defaults exceeded prime defaults (no news there). But among the subprime borrowers, income had little relation to foreclosure. The highest correlation to forclosure was the type of mortgage product. The more predatory the terms, the higher likelhood of foreclosure.
So AFC-W is correct in the sense that lax lending practices by the banks lead to more foreclosures which is the bank's fault. They lent money to risky people.
I still contend that signing a contract has rights and obligations which just don't disappear because you don't like how it is working out for you.
http://www.housingwire.com/2008/10/2...mes-study-says