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Even the rich and famous face foreclosure

By Reuters
February 25, 2011

Actor Nicholas Cage: Your money or your house

Although sales of foreclosed homes dropped last year, they still account for a quarter of U.S. home sales and the rich and famous are among them.

Basketball legend Julius “Dr.J” Erving, actor Nicolas Cage and hip-hop artist Chamillionaire have all gone through foreclosure proceedings in the last six months, according to forbes.com.

“All price points have been hit by the foreclosure crisis. 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,” said Morgan Brennan of forbes.com.

Former Detroit Red Wings hockey star Sergei Federov and Patricia Kluge, the ex-wife of the late media mogul John Kluge, have also lost their homes.

The bank foreclosed on the Kluge’s estate in Virginia. When the palatial residence, which was built by the couple in 1985, was put on the market in 2009, it was valued at a whopping $100 million (62 million pounds).

Kluge’s divorce settlement once entitled her to $1.6 million weekly.

Brennan said strategic defaults, in which a party walks away from a home, even if they have the funds to pay the mortgage, are becoming increasingly common among celebrities.

Erving stopped making mortgage payments on his home last autumn, saying that loans on his Utah mansion are “substantially underwater,” according to forbes.com.

In August 2010, two lenders foreclosed on Chamillionaire’s Texas home, which he had purchased in 2006 for $2 million.

Brennan believes Americans, many of whom are facing financial difficulties of their own, are interested in seeing the rich and famous facing those same difficulties.

“In my opinion, millions of Americans are struggling to make their monthly payments. They like to hear that people they love, or love to hate, are experiencing something they can relate to,” she explained.

The list of foreclosures can be found at www.forbes.com.

Copyright © 2011 Reuters

One Response to Even the rich and famous face foreclosure

  1. woody188

    February 25, 2011 at 3:37 pm

    “In my opinion, millions of Americans are struggling to make their monthly payments. They like to hear that people they love, or love to hate, are experiencing something they can relate to,” she explained.

    Not really, particularly when these people have multiple homes and aren’t going to the homeless shelter for the night like the regular folks. I’d poop my pants if I saw Nick Cage or Dr. J in a tent city.