Rich are the biggest defaulters on mortgages

[NYT] 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.

Feel free to shed a few crocodile tears - plutocrats are losing their master suites and saying goodbye to their wine cellars and screening rooms. 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.

The CoreLogic data also suggest that the rich do not seem to have any qualms whatsoever whether their decision to default on their mortgage responsibilities adversely effects the surrounding communities, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent.

“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”

One word: Guillotine.