It’s not just the middle class and poor who are being hit with home foreclosures. The foreclosure rate is rising fastest for homes valued at $1 million or more, CNNMoney.com reports.
The difference is that many of the wealthy are walking away from their homes voluntarily, as they see no point in continuing mortgage payments on a home that’s worth less than the mortgage value.
The share of foreclosures on properties valued at $1 million or more has soared 115 percent since the housing meltdown began in 2007, and the share for homes valued at more than $2 million has exploded 273 percent, according to RealtyTrac.
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Meanwhile, the share of foreclosures on properties valued between $500,000 and $1 million has plunged 21 percent.
So what gives? "In million-dollar homes, you're looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe?" Stuart Vener of Wilshire Holding Group tells CNNMoney.com.
For many it clearly doesn’t.
But if IHS economist Patrick Newport is correct, homeowners across the board may soon feel better about their mortgages. “The housing market is so much at the bottom that it can really only go up," he tells Yahoo.
Newport’s view was buttressed by news that existing-home sales shot up 4.3 percent in January from December.
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