Owners of properties with mortgages greater than $1 million are feeling pain the same as-if not worse than-less well-heeled owners.
More than 12 percent of mortgages exceeding $1 million were 90 days or more past due in September, compared to 6.3 percent of loans less than $250,000 and 7.4 percent of all U.S. mortgages, according to research firm First American CoreLogic
The reason for the shortfalls seems apparent. The number of U.S. households with a net worth of more than $1 million, not counting their primary residences, fell to a five-year low of 6.7 million last year from 9.2 million in 2007, according to consulting firm Spectrum Group.
While holders of ordinary mortgages can hope for government help, there is no such thing for holders of big mortgages and it's also difficult to find a re-fi.
There is no refinance market for you if you are underwater and outside the Fannie and Freddie framework, says Keith Gumbinger, vice president at mortgage data firm HSH Associate.
The answer for some is a short sale. While there are no official statistics, practitioners like Adrian Heyman, owner of Property Advisors in Scottsdale, Ariz., is seeing increasing numbers of luxury short sales.
A lot of wealthy people are upside down in their mortgages and they just can't afford the second or third vacation home anymore, Heyman says.
Source: Bloomberg, Kathleen M. Howley and Dan Levy (12/17/2009)