Celebrity Foreclosures 2011
Everyday Americans aren't the only ones losing homes. Many a celebrity has fallen into foreclosure lately too. Some have lost homes due to financial woes. Others have chosen to go the "strategic default" route, giving up the keys to a property to limit their losses, not because they can't afford the mortgage payments.
The famous folks losing their homes these days run the gamut from A-list actors and elite socialites to lower-profile reality show stars. We compiled a list of 13 rich-and-famous homeowners that are either currently going through the foreclosure process or have done so in the past year.
Some celebs are losing multiple homes. Retired hockey star Sergei Fedorov lost two homes in the Detroit suburb of Bloomfield Hills, Mich., in the past year. Grammy-winning songstress Toni Braxton lost her Las Vegas-area home in 2010; then in January US Bank filed a foreclosure suit on her Duluth, Ga., country club residence.
In the past two years former pro baseball player-turned-(failed) entrepreneur Lenny Dykstra has walked away from two Thousand Oaks, Calif., homes. One was a sprawling manse that he'd bought from hockey great Wayne Gretsky in 2007 for $18.5 million. After Dykstra tried unsuccessfully to sell it, he abandoned the property early last year. By the time JPMorgan Chase and other creditors took possession in November, the estate was in disrepair, reportedly with raw sewage leaking from the piping. The cleaned-up property sold in January for $10.5 million. Dykstra's other home is scheduled to be auctioned later this month.
Hakeem Seriki, hip hop artist and Grammy-winner known best as Chamillionaire, strategically defaulted on his Houston-area home last summer. "It wasn't a good business investment to keep paying that much mortgage on a house that I'm never at," he said. Seriki even posted a YouTube video explaining his decision.
Strategic defaults have become increasingly common with homes at all price levels. YouWalkAway.com, a San Diego-based online site specializing in strategic defaults, boasts more than 5,000 clients choosing to walk away from homes that are "underwater"--those for which the mortgage debt owed is more than the property is currently worth. Jon Maddux, chief executive of YouWalkAway.com, says a significant percentage of his clients fall under the high-net-worth, high-profile category.
"We have our share of celebrities and professional athletes with million-dollar-plus homes that can't fathom keeping this underwater home," he says Maddux. "They think it's a bad investment, and maybe their financial planner told them to call us."
When it comes to the rich and famous, home ownership tends to be a different kind of legal beast. Whereas most non-luxury homes are acquired with mortgages, many famous folk purchase property via trusts and so-called "straw buyers," according to Edward Weinhaus, chief operating officer of Blockshopper.com, a real estate research site. Trusts can keep the whereabouts of stars' residences somewhat private. They can also complicate and drag out the foreclosure process, with many cases ultimately involving foreclosure lawsuits and property liens.
Read More:forbes
Posts
