5 Super-Expensive Foreclosures For Sale

-Yahoo! Real Estate

Million-dollar-and-up homes are the fastest-growing segment of the U.S. foreclosure market, with banks seizing some 335% more such properties last year than they did in 2007.

"We're seeing evidence in our data that the high-end market is starting to get hit more," said Daren Blomquist of foreclosure watcher RealtyTrac.com. "I think high-end homeowners have a little more 'padding' to get through tough times if they experience a job loss or other trouble. But as the tough times continue, more and more of these homeowners are succumbing to foreclosure."

True, RealtyTrac's latest figures show that homes with $1 million or higher mortgages represented just 2.3% of houses in foreclosure during the first 10 months of last year. But that's nearly twice as many such houses as in 2007.

Blomquist suspects more rich people are falling into foreclosure because they had mortgages they could easily afford in good times, but can no longer cover in today's tough economy.

"No matter how wealthy you are, there's always that potential that you'll lose your job," he said. "Even if you have a very high income, you're always susceptible to not being able to make your mortgage payments."

The good news: Well-heeled house hunters may find they can pick up million-dollar-and-up foreclosures on the cheap. The latest available RealtyTrac figures show foreclosed homes sold for 27% less on average than nonforeclosed properties did during 2011's first quarter.

Here are the five highest-priced U.S. foreclosures listed for sale on Realtor.com:

The Villa Mar Vista Estate, Laguna Beach, CA
For sale: $19.95 million
Bedrooms: Four
Bathrooms: Seven
Square footage: 11,333
Built in: 2010

The estate has a heliport and a view of the nearby Pacific Ocean.
Photo: Engeland Volkers

This newly built estate's listing describes the property as "a sublime junction of privacy, acreage, generous interiors, tasteful design, plentiful outdoor spaces and vast coastal vistas."

Located about an hour south of Los Angeles in tony Laguna Beach, the Contemporary-style home features four bedroom suites, six full bathrooms and one half-bath, an in-home theater, an infinity-edge pool, a spa, a 20-car garage and private heliport.

Craftsman windows and French doors look out over the property's gardens and terraces and out to the Pacific Ocean, which is less than a half-mile away. You're also just a few blocks from the Aliso Creek Golf Course.

The Razor, La Jolla, CA
For sale: $25 million
Bedrooms: Four
Bathrooms: Eight
Square footage: 11,000
Built in: 2007

The oceanside residence has been the site of commercial shoots.
Photo: Hurwitz James Co

You'll have to act fast if you want to buy the Razor residence, because it's going up for auction Sept. 28 if it hasn't sold by then. Bidding will start at $16 million -- cash only, please.

Located on bluffs some 15 miles north of San Diego, the Razor (named after a bluff at the nearby Torrey Pines State Natural Reserve state park) overlooks the Pacific Ocean from just a few hundred feet away.

The 11,000-square-foot Contemporary-style home features four bedrooms, six full bathrooms, two half-baths, two fireplaces, a heated pool, a dog run, an eight-car garage and a two-space carport.

Architectural Digest profiled the house in 2008, while Calvin Klein used it as the backdrop for a TV spot for its new high-end Calvin Klein Collection. Visa also shot a commercial there for its top-of-the-line Visa Black Card.

The house is near the University of California at San Diego, the Salk Institute for Biological Studies, the Del Mar thoroughbred race track and the Torrey Pines Golf Course, site of the 2008 U.S. Open.

"This home is truly one of a kind," listing broker Bob Hurwitz says. "With today's building restrictions, nothing like it could ever possibly be built again in this location."

East Mockingbird Lane, Paradise Valley, AZ
For sale: $17.995 million
Bedrooms: Seven
Bathrooms: Ten
Square footage: 17,015
Built in: 2009

Among the amenities are a robot Elvis and 21-car garage.
Photo: John Hall & Associates

This estate features a main house with five bedrooms, three family rooms, two libraries, a billiard room, a wine room, a piano room and a hidden "panic room." There's also a mahogany in-home theater with a Dolby sound system and 13 seats that move in sync with the screen action. (A talking, singing Elvis Presley robot greets you at the theater's glass entrance booth.)

Other amenities include a two-bedroom guest house, two swimming pools, an on-site solar-power station and a $1.2 million security system. There's climate-controlled garage space for 21 cars -- including a four-car "show garage" outfitted with restored genuine gas pumps from the 1920s and '30s.

Located just outside Phoenix and Scottsdale, Ariz., the estate is a mile or so from the Phoenix Mountains Preserve, the Camelback Golf Club and the McCormick Ranch Golf Course.

The Wyndham Estate, Newport, RI
For sale: $7.9 million
Bedrooms: Seven
Bathrooms: Eight
Square footage: 12,500
Built in: 1891

The Baronial-style mansion looks out toward Martha's Vineyard.
Photo: Gustave White Sotheby's International Realty

Located less than a mile from Newport Harbor on the Atlantic Ocean, the Wyndham Estate combines classic 19th century looks with 21st century updates.

The Baronial-style mansion features seven bedrooms, eight bathrooms, four fireplaces, a ballroom, a music room and a rooftop deck and whirlpool with ocean views out to Martha's Vineyard some 20 miles away. The manicured grounds also host a man-made pond, waterfall and garage space for nine cars.

The Newport Country Club, New York Yacht Club and Ocean Drive State Park are nearby.

Biltmore Estates Drive, Phoenix, AZ
For sale: $6.95 million
Bedrooms: Nine
Bathrooms: Eleven
Square footage: 17,799
Built in: 2002

Country clubs and a golf course lie near the estate.
Photo: Russ Lyon Sotheby's International

Located in Phoenix next to the Arizona Biltmore Golf Course, this 1-acre estate features nine bedrooms, 11 bathrooms, five fireplaces, an in-home theater, library, wine cavern and al fresco patios, balconies and outdoor dining/dancing terraces. The rear courtyard hosts a massive heated pool and an adjacent spa.

In addition to the Arizona Biltmore Golf Course, nearby attractions include the Phoenix Mountains Preserve and Paradise Valley and Arizona country clubs some two miles away.

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Squatter Nation: 5 years with no mortgage payment

  -CNN Money

Charles and Jill Segal have not made a mortgage payment in nearly five years -- but they continue to live in their five-bedroom West Palm Beach, Fla. home.

Lynn, from St. Petersburg, Fla., has been living without paying for three years.

In Thousand Oaks, Calif., an actor has missed 30 payments, and still, he has not lost his home.

They're not alone.

Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics. Of those, two-thirds have made no payments at all for at least a year, and nearly one-third have gone more than two years.

These cases can go on and on. Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the "robo-signing" issue is particularly combative, it's 807.

If they want to fight evictions hard, borrowers can remain in their homes even longer while their cases are being worked through.

The Segals have been doing that -- in court. They bought their home in 2003 with an adjustable rate mortgage. After a few years, their monthly payments tripled to $3,000, just as their home-inspection business was cratering.

The Segals want the bank to modify the mortgage so payments are affordable, and they think the court will agree that their lender put them into a toxic loan.

"The evidence will show that we were defrauded," said Jill Segal.

Walk away from your mortgage? Time to get ruthless

If they lose, of course, they'll finally have to leave. And, unfortunately, more than 50 months of missed mortgage payments hasn't translated into big savings.

"It's very hard to save," said Jill Segal. "Our company's billing is 90% off and my husband is only working about four days a week."

Lynn, who didn't want her last name used, purchased a two-bedroom on Tampa Bay in 1998 for $135,000.

As the waterfront property's value skyrocketed, eventually reaching $750,000, she refinanced twice (once to expand a business), and took out a second mortgage. She now owes more than $600,000 on the home, which is worth only $235,000.

Living in this foreclosure limbo is "Hell," Lynn said. "I feel like I'm locked in a box. I work for a financial organization and if this came out, it could cost me my job."

She's still hoping to negotiate the loan. In the meantime, small things bother her. "A couple years ago, I lost my dog and I can't decide on getting a new one," she said. If she has to move, she can't be sure she'll go somewhere that allows pets.

The actor from Thousand Oaks, Calif. began having problems during the screenwriters' strike in late 2007, followed by a threat of a strike by the Screen Actors Guild.

He's working with his lender toward a mortgage modification, submitting page after page of documents, which the bank has often misplaced or waited so long to examine them that they had grown too old to use.

His ideal outcome is get the loan modified and get all his late fees waived. He feels entitled to that because the bank advised him to stopped paying in the first place to qualify for one of the government's foreclosure programs. Before that, he had missed only one payment.

Meanwhile, he has cobbled together some income streams -- small acting parts, teaching acting classes and even handyman work.

"In a way, I feel like I'm lucky because I haven't had to pay any 'rent' for 30 months," he said.

But he feels like he's always under a cloud. "I haven't slept in three years," he said. "It's terrifying. I have to have the ultimate poker face in front of my kids."

10 dirt cheap housing markets

Ruben Martinez, a Staten Island, N.Y., man trapped in a particularly bad adjustable rate mortgage, stopped paying more than three years ago. His attorney, Robert Brown, has managed to stave off one foreclosure.

Martinez, still struggling to find work, has little in savings despite the missed payments. He's earning some income as a pastor and consulting for a non-profit family counseling organization.

"There's pressure on me every day," he said. "I have a wife, three daughters and two grandchildren. Where are we going to live?" 

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Foreclosures down for 7th straight month

-CNN Money

The number of foreclosure filings issued in April plunged 34% from a year ago -- the seventh straight month of declines.

And there were just 69,532 homes repossessed last month, a 32% fall from the peak last September just before the eruption of the "robo-signing" scandal, in which banks were found to be mishandling the foreclosure process.

Will the seeming good news continue? No way, said Rick Sharga of RealtyTrac, which issued the latest monthly figures on Thursday.

Even with the drop, there were nearly 220,000 foreclosure filings during the month, including notices of default, scheduled auctions and bank repossessions. And there are 3.7 million borrowers at least 90 days late on payments. Normally a large percentage of them would already be in foreclosure. They are not -- for two reasons.

One is that ongoing regulatory issues. Banks want to make sure their procedures are all in place. Second, the banks have already saturated many markets with repossessions they've put back on the market. "Banks can't move inventory fast enough, at prices high enough, that they're excited about foreclosing on any more homes," said Sharga.

On the other hand, there are a couple of reasons to believe the conditions may be improving. Hiring has picked up, enabling some borrowers to resume paying their bills. Banks are also doing more to keep borrowers in their homes. In March, banks completed 77,000 mortgage modifications without government assistance, according to Hope Now, a coalition of mortgage servicers, investors and private counselors. That was 26% more than in February.

"What's important," said Faith Schwartz, the head of Hope Now, "is that these modifications are much more affordable. They should perform much better."

Home prices, however, continue to erode. That's a problem because it pushes more borrowers "underwater," with home loans worth more than the value of their homes. That removes an important financial cushion should the borrower run into financial problems. And it given incentive to "strategically default," or walk away from their homes and mortgage payments.

The percentage of underwater owners of single-family homes has now reached 28.4%, according to real estate web site Zillow. That will worsen if home prices fall further.

"Home value declines are currently equal to those we experienced during the darkest days of the housing recession," said Zillow Chief Economist Stan Humphries. "That's going to put more homeowners in default." Home prices have fallen so fast lately that Humphries changed his 2011 outlook, forecasting a 7% to 9% price drop for the year, up from 5% to 7%.

Just as falling home prices result in more foreclosures, rising foreclosures hurt home prices by swamping housing markets with repossessed homes. Bottom line is that the crisis could last for years, according to Sharga. It could be 2014 before the housing market returns to a more normal condition. 

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Foreclosures Trapped by a Lack of Lawyers

-Wall Street Journal

Moves by banks to ditch law firms snared in the "robo-signing" mess are spreading delays and confusion to borrowers, while angering judges grappling with thousands of foreclosure cases now trapped in limbo.

The trouble began when U.S. banks and government-owned mortgage giants lost confidence in some law firms that handled a huge volume of foreclosures. After controversy erupted last fall over the shoddy review of loan documents known as robo-signing, banks dropped some law firms.

Finding replacement lawyers who can pick up the slack quickly has been a struggle. While the resulting slowdown means that fewer houses are being seized, late fees are piling up for homeowners seeking a loan modifications. Investors who own bonds backed by those mortgages could face higher costs from the snags.

"It's causing chaos because nobody knows who's representing whom," says Thomas Ice, a foreclosure defense lawyer in Royal Palm Beach, Fla.

The problems are particularly acute in Florida, one of 23 U.S. states where foreclosures must be processed through courts. Last fall, Fannie Mae and Freddie Mac terminated their relationship with the Law Offices of David J. Stern. At its peak, the Plantation, Fla., firm handled nearly 20% of all foreclosures in the state.

In March, the Stern law firm told judges across Florida that it was unable to file the necessary paperwork to withdraw from 100,000 cases. Florida's attorney general is investigating allegations that the firm routinely forged notarized documents. The firm denies the accusations and is challenging the attorney general's jurisdiction in court.

"There's nobody to call to expedite any of these things. My clients are in limbo every day," says Craig Lynd, a founding partner of KEL Attorneys, an Orlando, Fla., law firm.

Two of his clients, 58-year-old Ruth Diehl and her husband, have been in talks with a J.P. Morgan Chase & Co. unit for more than two years about a loan modification on their home in Ocoee, Fla. The bank agreed to offer different loan terms at a court-ordered mediation session last summer, where it was represented by the Stern law firm.

But the deal wasn't finished, Mr. Lynd says, and efforts to force compliance with the agreement in court was hampered by the removal of the Stern firm from the case. A different law firm was assigned to the case, and J.P. Morgan asked the new firm to reach out to Mr. Lynd, said a J.P. Morgan spokesman.

Ally Financial Inc., the GMAC Mortgage parent in which the U.S. government owns a 73% stake, transferred to other lawyers its foreclosures previously assigned to the Stern firm.

Lisa Butterfield, who is trying to surrender her Middleburg, Fla., home to GMAC through a "deed-in-lieu" of foreclosure, says she has heard nothing from the new lawyer who was assigned her case. "You finally think, 'I'm finally going to get this settled,' and then it's not," she says. She moved last year to take care of her parents but still pays the utilities in hopes of reaching a deal with GMAC.

An Ally spokeswoman says the "situation in Florida is challenging, given the large number of borrowers in foreclosure and the number of quality law firms to manage these cases." She declined to comment on Ms. Butterfield's situation.

Mr. Stern has blamed former foreclosure clients for failing "to take into consideration any succession planning" when they terminated his firm, according to a written response to a Florida judge. Jeffrey Tew, a lawyer for Mr. Stern, says banks have withheld millions in legal fees and are to blame for delays.

A Fannie spokeswoman says transfers of foreclosure files from terminated firms to new lawyers have been completed. Fannie has approved 16 law firms to handle its cases in the state, up from nine firms last year. Freddie uses 14 law firms in Florida, up from four.

Peter Blanc, the chief judge in Palm Beach County, Fla., with nearly 9,000 cases from the Stern firm, last month urged Mr. Stern to reconsider his decision to walk away from cases. Another problem: Two law firms that got some of the Stern cases were later dropped by Fannie, Freddie and banks.

"Whatever anyone thinks the cost of David Stern's implosion is, quadruple it," says Richard Shuster, a real-estate lawyer in Miami.

On Friday, Judge Blanc will start convening special hearings to reassign hundreds of cases a day until the backlog is cleared. "If nobody shows up" on behalf of the banks, "we will dismiss the cases," he says. If that happens, banks would have to essentially start over.

In February, Fannie terminated its relationship with Ben-Ezra & Katz after the Fort Lauderdale firm notified Fannie that some paralegals took inappropriate technical shortcuts. Marc Ben-Ezra, a principal at the law firm, says the firm is trying to withdraw from 15,000 cases "cooperatively and responsibly."

But other firms taking over those foreclosures "tend to be overwhelmed," while some clients have seized files and told his firm to no longer act on their behalf. "It's bad for everybody," Mr. Ben-Ezra says. On Thursday, the law firm said it is suspending its foreclosure practice until further notice.

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