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Donnachaidh Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-30-10 09:58 AM
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Mansion Foreclosures Surge
http://blogs.wsj.com/wealth/2010/06/29/mansion-foreclos...

For those who think all is well again in the world of Richistan, consider the following statistic.

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 cant 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.

Early on in the crash, the weakness was in the lower-price tiers. In the past year, most of the biggest price declines have been in the upper tiers, Mark Zandi, chief economist of Moodys Analytics, told Reuters. That suggests high-end households are coming under increasing pressure.

Lenders to the wealthy are taking a hit. Bank of Americas U.S. Trust unit reported a nearly sixfold increase in its loan-loss provision in the first quarter, to $184 million from $31 million a year earlier. Net charge-offs at Northern Trust rose to $31 million from $2.7 million a year earlier, though they were down from the 2009 fourth quarter, according to Reuters.


More at the link ---
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izquierdista Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-30-10 10:05 AM
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1. Break out the violins
:nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity:
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Stevenmarc Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-30-10 10:07 AM
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2. I'd say most of the higher end mortgages were for spec properties
If you know anything about truly high end real estate people who buy homes in the $5 million plus category tend to pay in cash, they don't take out mortgages.
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ixion Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-30-10 10:25 AM
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3. According to Dr. Housing Bubble, the next wave of defaults will be
Option ARM and Alt-A loans.

Once again, he is spot on.
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