Here’s the interesting part – they’re doing so voluntarily, according to CNNMoney.
According to RealtyTrac, more than 36,000 homes worth over $1 million were foreclosed upon last year. While that may be less than 2 percent of all foreclosures here in the U.S., it represents a much larger share of foreclosure activity than in previous years.
“These properties are accounting for a bigger piece of the foreclosure pie,” said Daren Blomquist, vice president of RealtyTrac.
Out of all U.S. foreclosures, the share of them being done on homes worth over $1 million has increased by 115 percent since 2007, while the share of multi-million dollar foreclosures (homes valued at over $2 million) rose 273 percent.
Meanwhile, the share of foreclosures on mid-range properties ($500,000 – $1 million) dropped by 21 percent.
“In the lower-priced houses you’ll see more people defaulting because they can’t afford the payments and it’s a choice between feeding their family and paying the mortgage on a home that’s under water,” said Stuart Vener, a real estate and mortgage expert with Wilshire Holding Group.
“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?” he said. In many cases, it often makes more financial sense to walk away.”
They don’t necessarily have to hurry up and get out of the house if they opt to walk away. On average, it takes approximately 348 days for a foreclosure to be completed, Blomquist said.
“They may get almost a year of free housing out of the deal.”
- Million-dollar foreclosures rise as rich walk away (money.cnn.com)
- Rich Americans: ‘Take My Mansion, Please’ (huffingtonpost.com)
- FORECLOSURES: Here They Come (businessinsider.com)