The rich and famous are finding they aren’t immune to foreclosure. In the last six months, actor Nicolas Cage, baseball legend Julius “Dr.J” Erving, and hip-hop artist Chamillionaire have gone through foreclosure proceedings, Reuters News reports.
Morgan Brennan of Forbes.com says strategic defaults are becoming more common among celebrities--that’s when a party walks away from a home because of its big loss in value, even though they have enough money to pay the mortgage.
That’s what Erving did. He said his Utah mansion was drastically underwater and so he stopped making his mortgage payments last fall on the home.
"All price points have been hit by the foreclosure crisis,” Brennan told Reuters News. “The rich and famous have not been excluded from that. There are a handful of people in the luxury real estate category that are experiencing foreclosures as well."
Source: “Rich and Famous Also Face Foreclosures,” Reuters News (Feb. 24, 2011)
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