Rich Defaulting on Their Mortgages

The price tag for the nation’s housing crisis continues to escalate. An increasing number of rich people are defaulting on their mortgages by the same issues facing the poorest subprime homeowners.

From Bloomberg: Borrowers…whose 2004 compensation was almost 10 times the median U.S. household income, are becoming trapped by….falling home prices erase equity and make it impossible to sell or refinance without losing money.

The number of U.S. homes valued at more than $729,750, the jumbo-loan limit in the most affluent areas, entering the foreclosure process jumped 127 percent during the first 10 weeks of this year from the same period of 2008, data compiled by RealtyTrac Inc. of Irvine, California, show. The rate rose 72 percent for homes valued at less than $417,000 and 78 percent for all homes, RealtyTrac said.
…
Foreclosures have come to the Hamptons, the beach towns about 100 miles east of New York City on Long Island…

Almost 90 borrowers entered the foreclosure process in the towns of East Hampton and Southampton in the first 10 weeks of 2009…Home sales in the Hamptons fell 67 percent in the first quarter from a year earlier, the most since records were first kept in 1982, according to Town & Country Real Estate of the East End LLC.

emphasis added

Apparently the crazy financing was not limited only to the subprime segment of the industry.

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