Celebrity is fleeting and so is the ability for "stars" to pay their mortgages on time and keep the roofs over their heads. Currently, the real estate industry appears to be on track for enduring 1,000,000 foreclosures by years end, and it is not just the average Jane or Joe at risk of losing their homes. Many celebrities (or perhaps wanna-bes) are contributing to the unfortunate trend.
Celebrities Facing Foreclosure
Damon Dash is a music legend known for being the Co-founder of Roc-A-Fella Records. His status as an entrepreneur is not enough to keep the roof of his Tribeca New York property over his head. Dash stopped paying the $78,000 per month mortgage in late 2008 and the property has officially ended up on the auction block.
Even though "Real Housewives" episodes have been airing in a timely fashion, some cast has been neglect in their fiduciary responsibilities. New Jersey housewife Teresa Giudice has filed for bankruptcy and the court is selling off many of their possessions including the family's six-bedroom, five-bathroom “rococo chateau” to help pay off the debt.
David Olsen is best known for fathering financial powerhouses Mary Kate and Ashley Olsen. Apparently the girls have not properly shown their gratitude to their pops as he’s recently filed for bankruptcy and is facing foreclosure on a $2.1 million home in Tarzana, California.
Until recently no one ever heard of Faisal Shazad, however this individual made a name for himself by trying to detonate a bomb in Times Square. Shazad had built a bomb and left it in an unattended car in the heart of NYC, luckily quick thinking bystanders contacted authorities and prevented the attack. Rumor has it that Shazad defaulted on the $200,000 loan on his Shelton, Connecticut home forcing his lender to foreclose on the property.
Discounted Celebrity Homes
While some celebrities are on the brink of financial ruin, others are doing fine, but are still feeling the negative impact of current market conditions. That is why consumers can now find tons of celebrity homes for sale and substantial discounts. Some examples of that trend come from stars with connections to the music industry.
One example comes courtesy of the Malibu residence of the "Prince of Darkness." Earlier this year the Osbournes' listed their luxurious beachfront property in Malibu for $14 million. At that price point, there were no takers and the couple reduced the price to $10.65 million to generate interest. At last check, the property still has not sold and is now being offered as a rental for $44,000 a month.
Singer Brittany Spears is also struggling with trying to unload her mansion in Beverly Hills. Originally, the starlet listed the home for $7.2 million. After months of inactivity, that price was cut to $4.86. The fact that both properties have not moved could be related to the fact that Americans no longer want large homes.
Large Homes Need Jumbo Mortgages
While the news may appear to be distressing on the surface, there is a glimmer of hope within the housing industry. Those who have ever longed to live like a star may stand a better chance because of the large property discounts combined with the competitive nature of the market. If you are contemplating taking that step, then a jumbo mortgage will be in order.
Even though many of the celebrity homes on sale are being offered at huge discounts, the fact is that the average American will not have that much cash liquid. That is why a jumbo loan that "...exceeds the maximum loan amount allowed by the most common mortgage investor," would be necessary (Mortgage Marvel).
