Mansion foreclosures surge

$1,000,000+ for this?

Inquiring minds are questioning the old adage, “The wealthy always have money.” The WSJ has an article today looking at new housing data for homes with a mortgage of 1+ million dollars. And its shocking:

The percentage of $1 million-plus loans more than 90 days delinquent rose to 13.3% in February, half again as high as the 8.6% overall delinquency rate, according to First American CoreLogic, which tracks U.S. real estate and mortgages.

The statistic, from this Reuters article, points to a sobering reality amid the happy talk of newly minted millionaires. Many affluent and wealthy can’t keep up with their mortgage payments.

Last month, there were 205 foreclosure filings for mortgages of $5 million or more, the third straight month such filings rose, according to RealtyTrac. The 205 foreclosures totaled $813 million.

Do some quick math and divide 205 into $813 million. You get an average mortgage just shy of $4 million. The real problem with this is the “90 days late”. The cure rate of these homes, due to the enormity of the delinquency, is almost 0%.


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