A recent foreclosure proceeding against former NFL player Terrell Owens illustrates that, in this time of recession, asset forfeiture has begun to affect higher-end homes in Tennessee and nationwide.
The former NFL wide receiver last played for the Dallas Cowboys in 2009. Since then, his finances have undergone significant upset. In the past year alone, Owens has seen foreclosure proceedings instituted against 5 of his homes around the country.
In fact, foreclosure activity against higher-end homes — those worth more than $1 million — has increased at a higher pace than other areas of the real estate market. According to data compiled by a real estate information provider, foreclosure activity on such homes increased 489% from 2007 to 2011. That surge far outpaced the 105% increase on properties under $1 million in the same period. In terms of numbers, more than 4 million homes have been foreclosed on in the past five years.
Some celebrity homeowners find themselves in the foreclosure process because of money-flow issues, having fallen behind on mortgage payments. Others, however, are utilizing the legal process as a financial strategy to be released from mortgage responsibilities on real estate whose fair market value is outweighed by its cost basis.
For example, mortgage laws might not permit lenders to collect against a homeowner’s other assets. For that reason, some homeowners — like pop singer Rihanna — are choosing foreclosure in order to be freed from mortgage payments on an underwater property. The singer recently opted for default on her $6.9 million home in Beverly Hills, despite reported gross earnings in 2012 of around $53 million.
If you are facing asset forfeiture, an attorney can advise you of the laws governing that process and any options you might have.
Source: Forbes, “Foreclosure Woes Of The Rich And Famous,” Morgan Brennan, August 15, 2012
- Our firm handles situations similar to the one discussed in this post. If you would like to learn more about our practice, please visit our Memphis Stopping Foreclosure page.