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More Wealthy Default on Their Mansions, WSJ

The sub-prime crisis has turned into the super-prime crisis.Homeowners with mortgages of more than $1 million are now defaulting at nearly three times last year’s rate, according to a Bloomberg article.Payments on about 12% of mortgages exceeding $1 million were 90 days or more overdue in September, up from 4.7% a year ago and well over the 7.4% default rate for U.S. mortgages as a whole. There are 114,000 home loans of more than $1 million...“You are just starting to see the tip of the iceberg with luxury short sales,” said Adrian Heyman, owner of Property Advisors, a real estate broker in Scottsdale, Arizona. “A lot of wealthy people are upside down in their mortgages, and they just can’t afford the second or third vacation home anymore.”
By Robert Frank, Dec. 18, 2009 WSJ

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