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Wealthy losing their homes

By Judy Martel · Bankrate.com
Friday, April 9, 2010
Posted: 3 pm ET

To contradict F. Scott Fitzgerald's opening line in "The Rich Boy," the rich aren't all that different from you and me -- at least when it comes to foreclosures. A study commissioned by The Wall Street Journal predicts that homes with loans of $5 million or more will experience a sharp increase in foreclosures this year.

In February, according to the study, 352 homes in the $5-million-and-above category were scheduled to go into foreclosure. Actor Nicolas Cage's home was one of them. His well-publicized real-estate troubles hit the presses again when his Bel Air home went on the auction block April 7. With a minimum bid of only $10.4 million (asking price in 2009 had dropped to $17.5 million from its high price of $35 million in 2007) there were no buyers, and the home reverted to the bank.

Typically, the wealthy don't lose their homes as often as the middle and lower classes, simply because they have more in assets -- savings and investments -- that they can use to pay the mortgage. Yet big borrowers, according to First American CoreLogic, are more likely to default.

On the other end of the transaction, buyers of high-end properties are harder to find because it's difficult to come up with the cash or a mortgage, even for multi-million dollar homes that have hit rock-bottom prices.

See home values in your state.

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