Are we supposed to feel better by learning about mortgage default and foreclosures impacting wealthy or famous people living in the most expensive communities?
CNN reports on foreclosures in communities such as Beverly Hills and other multi million dollar communities. Is this a case where the homeowners financed their homes with mortgages from those evil predatory lenders or might the decline in real estate values make it a smart business decision to walk away from mortgage debt?
Look at the lenders who originated the mortgages on Beverly Hills' homes. You normally do not associate them with predatory nor subprime lenders. By the way, I peaked at the rate spread values in 2006 HMDA data for Beverly Hills. 1,233 out of 1,368 mortgages were low cost (rate spreads < 3%).
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