Million-dollar foreclosures

From actor Nicolas Cage to former Wall Street executives, the nation's wealthiest homeowners are seeing a wave of foreclosures.

By Kim Peterson Apr 13, 2010 2:42PM
Homes of the Rich  © CorbisIt took a while, but the foreclosure epidemic is finally reaching the rich and famous.

In February, there were 352 homes with loans of at least $5 million that were scheduled for foreclosure auction, The Wall Street Journal reports. In all of 2009, only 1,312 homes in that category went to auction.

It took longer for foreclosures to hit at this level because the wealthiest had more financial wiggle room as the economy tanked, the Journal reports. They had more savings, or could get more loans. But even some of them couldn't escape the market crash.

One foreclosure was a home owned by a former bigshot at Merrill Lynch. He tried to sell his 14-acre mansion in November for $13.9 million, but got no takers, the Journal reports.

So this week, he declared bankruptcy, which delayed the foreclosure auction that was scheduled on his Westchester palace. Post continues after video:

A mansion belonging to the actor Nicolas Cage also went to foreclosure auction last week. He had put it on the market for $35 million, but couldn't find a buyer.

Bidding on the house opened at $10.4 million, according to The Los Angeles Times. One real estate agent described the home's design as "frat house bordello" with 300 framed comic book covers hanging on the walls.

No one wanted the house, and so the foreclosing lender took ownership. Six lenders overall are owed $18 million on the estate.

"It's very, very difficult for these people to believe they've had such a severe reversal of fortune," one real-estate agent in California told the Journal.

Experts expect that more luxury mansions will head to foreclosure, given the trend lines. One company with data on the home-loan market said that nearly 15% of home loans worth $4 million or more are overdue. That's much higher than the 8.7% overdue for all home loans, according to the Journal.

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