Remember that Brent White essay about under water mortgages? Some of you may have read it and some may have not. Basically, it was an essay on how under water mortgage owners are financially better off by walking away than by attempting to pay off a mortgage for a house that no longer retains equal value. He also got into some very interesting insights about the psyche of the American consumer and the pressure felt to fulfill their obligation of paying their mortgage. Engaging stuff.
Building upon that, a new study has shown another trend moving away from people’s tendency to pay off their mortgages. Now, it seems, that people are more bent on paying their credit cards off as opposed to keeping their mortgages current. No more than three years ago, the exact opposite was the norm.
In a study conducted by Trans Union, a global credit solutions company, and published on CNNmoney.com, it is reported that now about 6.6% of consumer are delinquent on their mortgages while being current on their credit card payment, while in 2007, 4.6% were delinquent on their credit card payments and only 3.95% were delinquent on their mortgage. The statistics increase for states that were hit hardest by the mortgage crisis—namely California and Flordia.
It doesn’t seem like a whole lot, but it cites an increasing trend in the way Americans are looking at their financial portfolios. Something has caused them to push their mortgages to the back burner. Most likely, it’s the fact that people’s homes are no longer making them money, so they’re more inclined to let their mortgages slip.
Now it seems that Mr. White’s little diatribe on the idea of consumer guilt and fear of shame over their mortgage has flopped to the side of credit.
Tags: Mortgages
