Jumbo-Loan Defaults Surge in U.S. as Recession Reaches Wealthy Homeowners

[Purveyor]

Source: Bloomberg

By Bob Ivry

Feb. 20 (Bloomberg) -- Luxury homeowners are falling behind on mortgage payments at the fastest pace in more than 15 years, a sign the U.S. financial crisis that began with the poorest Americans has reached the wealthiest.

About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent, a percentage reached within 10 months and the fastest since at least 1992, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Florida. That’s almost twice as quickly as 2007 borrowers fell behind and a level 2006 owners haven’t attained after almost three years.

The jump in late payments on jumbo loans, while still lower than the 20 percent delinquencies in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.

“The biggest influence in rising delinquencies is related squarely to the economy rather than poor underwriting,” said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, New Jersey-based mortgage research firm. “We are apparently all suffering to some degree. It’s certainly more severe for some but still, it’s pretty much widesprea

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aXQyhJ_n2Nqs&refer=home

[Pirate Smile]

1. This was one of the complaints I heard on CNBC when Obama's plan came out - it didn't

help with the jumbo loans. What a shock that this was a concern they would focus on. More "Losers" for Rick to rant on.

[closeupready]

2. Well now that the rich are in trouble, can we actually do something meaty now?

:eyes:

[mbperrin]

3. B-b-b-b-b-b ut it's just the LIARS who are in trouble - the pore folk who tricked

the bankers into givin' them big bucks a-purpose to break the banks!

I know it's true - I saw it on the TEE-VEE!

There's no actual problem!!!!!!!


:crazy:

[uncle ray]

4. "the U.S. financial crisis that began with the poorest Americans"

what bullshit.

the crisis may have started with subprime loans, but it was not exclusively poor people that got these loans, it was middle class people who overextended themselves pretending they were of the investment class, largely buying houses they could not afford, expecting them to rise in value forever. i realize there was much more to it than that, but it certainly was not the fault of poor people.