Wednesday, May 6, 2009

Subprime is down; now million-dollar mortgages turn sour too

Rich Americans Default on Luxury Homes Like Subprime Victims

The number of U.S. "jumbo" mortgages entering the foreclosure process jumped 127% during the first 10 weeks of this year from the same period of 2008. Chuck Dayton bought a $950,000 house near the ocean in Newport Beach, California, in 2004, with a 25% deposit. He was making $500,000 a year with his plasterboard company. He refinanced in February 2007 with a $1 million loan and also took out two private mortgages to help pay business expenses. Now he owes $46,584 in delinquent payments and penalties. The foreclosure process typically takes about a year. That means jumbo-loan defaults will increase over the next year. [Remember, the US housing market is 12-18 months ahead of the UK. Also what effect will this have on banks?]

Posted by drewster @ 05:51 PM (867 views)
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3 thoughts on “Subprime is down; now million-dollar mortgages turn sour too

  • japanese uncle says:

    Anyone daft enough to finance his business via equity release is first of all not qualified to run any business at all.

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  • Subprimed for the slimed. Primed for the once dimed.

    Epic overleveraging of major (bailout) institutions had nothing to do with this of course.

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  • “Just like homeowners in smaller homes, these homeowners anticipated being able to refinance mortgages to continue making payments and at a future date sell for a gain and put it toward their next home.

    Sounds crazy transforming all homeowners in speculators…

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