Over the past five years there have been million of homeowners who have lost their homes to foreclosures. In fact, there have been 4 million homes that have been foreclosed on. And while the majority of these homeowners were your every day type of owner who fell behind on payments, as of recent there have also been an increasing number of the wealthy — musicians, athletes and other celebrities — that have also found themselves going through the foreclosure process.
According to RealtyTrac, there has been a 489 percent increase in foreclosure activity for those homes valued at more than $1 million. For those less than $1 million there has been a 105 percent increase.
An example of one celebrity to go through this process, time and time again, was Terrell Owens, the former wide receiver for the Cowboys. In total he has defaulted on five properties, including a condo in Sunny Isles, Florida. This condo ended up being sold in a short sale, as did two other units. Two others were also repossessed by the bank.
Comedian Chris Tucker also went through a similar situation and ended up selling his Lake County, Florida, 10,000 square foot mansion in a short sale. Aside from at one time facing foreclosure on the property from the bank, he also reportedly owes the IRS $11.5 million in taxes.
However, not being able to keep up on payments is not the only reason more and more of the wealthy are losing their homes, as some others are choosing to strategically default. In those cases, realizing it may make more sense financially to walk away from a home that is underwater, some are choosing the foreclosure route to no longer have to deal with such a large amount of negative equity.
Source: Forbes, “Foreclosure Woes Of The Rich And Famous,” Morgan Brennan, Aug. 15, 2012