On behalf of Debt Advisors, S.C.
It seems as though no home value is safe in the current market, and the current crisis is affecting people from all degrees of wealth. While it may be easy to assume that the most expensive homes were the first homes foreclosed upon in the housing market crisis, that is simply not the case. In fact, even though the foreclosure rate in general has recently gone down, the rate on the most expensive of homes has gone the opposite direction and spiked.
In 2011, the Mortgage Bankers Association reported that the drop in foreclosures was at a rate of 28 percent. While this may be long awaited good news in a housing market seeing record lows, the foreclosure rate for the most expensive properties has skyrocketed since 2007. In this five-year span, the foreclosure rate has gone up by 115 percent for homes that are valued at least $1 million dollars. Even more startling is the facts that homes valued at $2 million or more saw the foreclosure rate increase by 273 percent.
So what’s responsible for these increasing numbers? One explanation may be that banks are not as open to mortgage negotiations as they were in the past. Also, some homeowners are left with no choice but to abandon their properties because the home’s value is significantly less than its purchase price.
Whatever the reasons may be, home foreclosure and bankruptcy will continue to be an issue that defines our nation’s economy. For many in Wisconsin and across the United States, bankruptcy or foreclosure may be the best options for the future.
Source: CBS News, “Foreclosure rate up on priciest homes,” Constantine von Hoffman, 02/28/12.