‘Luxury’ Foreclosures Soar
For the past two years, foreclosure activity has been increasing on higher-end homes at a faster pace than lower-end homes, says Daren Blomquist with RealtyTrac, a company that tracks foreclosure housing data. Foreclosure activity on homes priced at $1 million or higher have soared 489 percent between 2007 and 2011. On the other hand, foreclosure activity on properties worth less than that have jumped by 105 percent.
Plenty of celebrities have been making headlines in recent years facing foreclosure woes on their properties, such as football star Terrell Owens (who has had five different properties foreclosed upon), actor and comedian Chris Rock, actor Burt Reynolds, and former heavyweight boxing champ Evander Holyfield.
Some well-known names — such as singer Rihanna — as well as home owners with jumbo loans also increasingly are choosing to strategically default and walkway from their underwater mortgages.
“We are seeing more people who can afford to make the mortgage payment but it just doesn’t make finance sense when they still have this large negative equity amount they are dealing with,” Jon Maddux, chief executive of YouWalkAway.com, told Forbes.