Foreclosure Rate Highest Among Wealthy

What's not known is how many of the homes are investments, or primary or secondary residences, but it's clear that the foreclosure rate for mortgages exceeding $1million is higher than for lower priced homes, according to the New York Times analysis.

July 11, 2010, 1pm PDT | Irvin Dawid

The Times reporter goes to a wealthy Silicon Valley community, Los Altos (called "one of the wealthiest places in the United States" by Wikipedia) to investigate the growing number of foreclosures affecting the top bracket.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times. By contrast, about one in 12 mortgages below the million-dollar mark is delinquent."

The gap is larger for investment homes: "Where the original mortgage was more than $1 million it is now 23 percent. For cheaper investment homes, it is about 10 percent."

"The so-called strategic defaults (where homeowners walk away from 'underwater homes') have become a matter of intense debate in recent months" as it can have devastating effects on the community. It appears to be less of a concern of many in wealthy enclaves, like Los Altos and others in the Bay Area.

Thanks to Mike Keenly

Full Story:

Biggest Defaulters on Mortgages Are the Rich

Published on Friday, July 9, 2010 in The New York Times - Economy