Rich and famous also face foreclosures
NEW YORK (Reuters Life!) - Although sales of foreclosed homes dropped last year, they still account for a quarter of U.S. home sales and the rich and famous are among them.
Basketball legend Julius "Dr.J" Erving, actor Nicolas Cage and hip-hop artist Chamillionaire have all gone through foreclosure proceedings in the last six months, according to forbes.com.
"All price points have been hit by the foreclosure crisis. The rich and famous have not been excluded from that. There are a handful of people in the luxury real estate category that are experiencing foreclosures as well," said Morgan Brennan of forbes.com.
Former Detroit Red Wings hockey star Sergei Federov and Patricia Kluge, the ex-wife of the late media mogul John Kluge, have also lost their homes.
The bank foreclosed on the Kluge's estate in Virginia. When the palatial residence, which was built by the couple in 1985, was put on the market in 2009, it was valued at a whopping $100 million.
Kluge's divorce settlement once entitled her to $1.6 million weekly.
Brennan said strategic defaults, in which a party walks away from a home, even if they have the funds to pay the mortgage, are becoming increasingly common among celebrities.
Erving stopped making mortgage payments on his home last autumn, saying that loans on his Utah mansion are "substantially underwater," according to forbes.com.
In August 2010, two lenders foreclosed on Chamillionaire's Texas home, which he had purchased in 2006 for $2 million. Continued...