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Foreclosures on Pricey Properties Pick Up
Well-to-do buyers weren't immune to wacky loans, and they're coming due
By Harry Kimball
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Posted Oct 12, 09 9:19 AM CDT
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(Newser)
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The country's most expensive homes are now making up a larger segment of foreclosures in the most recent spike of mortgage defaults. An analysis of recent data shows that 30% of June foreclosures involved homes valued in the top third based on location; that’s up from just 16% at the beginning of the crisis. “The slope of that curve in recent months is much sharper than it was recently,” an economist tells the Wall Street Journal.
Conversely, homes valued in the bottom third of local markets were responsible for 35% of June foreclosures, down significantly from 55% in 2006. The spike in foreclosures on expensive homes is highlighted by the sort of loans that are going bad: Prime loans—which include so-called “exotic mortgages” often used to buy pricey properties—accounted for 58% of foreclosures in the second quarter of this year. Last year, that number was just 44%.