America’s rich are hurting too

Link copied to clipboard

Published: 12 October, 2010, 23:34

TAGS: Crisis, Politics, USA, Economy

With millionaire’s collecting unemployment, and being squeezed out of their homes; are America’s rich suffering from the recession too?

If there was any question of whether or not we’re still in a recession, the long lines at a foreclosure modification event in Los Angeles, California may give you the answer. Thousands of people lined up before dawn in a last ditch effort to save their homes.
It’s a scene that reminds some of the Great Depression.

“I’m standing in a soup kitchen line and I’m a psychologist, and I’m a PhD. So that’s the economy for you,” said distressed homeowner Sheida Ashley.

The crisis has not discriminated. Record numbers of ordinary homes have gone into foreclosure as borrowers became unable or unwilling to pay their mortgage. Now, it seems like the rich are also sharing some of that pain.

“The rich are suffering,” said UCLA real estate lecturer Paul Habibi. “In the United States right now, according to CoreLogic, we’re actually seeing one in seven homeowners, which have a home worth more than a million dollars being seriously delinquent.”

“I think it’s higher than that. And I think it’s only going to get worse,” said realtor Christian Stevens, also known as Mr. Beverly Hills.

Even celebrities are vulnerable to foreclosure. A bank owned home that used to belong to Oscar winner Nicholas Cage. At one point it was selling for $35 million dollars. Now the listing price is less than half that.

In lower class neighborhoods, there have been many reported cases of people who can’t pay their bills and are now just squatters in their own homes. It’s also happening in high end neighborhoods like Beverly Hills. People sick of seeing big banks being bailed out, have just stopped making their huge mortgage payments and have become luxury squatters.

And that is hurting everyone.

Stevens says the trend is killing jobs because mansions aren’t being maintained. Not paying the bills is also adding to the deficit.

“So while you’re staying in your own home and strategically not making a payment, we’re cutting firefighters and teachers and police and the potholes are growing,” said Stevens.

Many people who once had thriving businesses are now out of work like millions of other Americans. Those who were once living in the lap of luxury are now being squeezed out of their own mansions.

But even with this rise in millionaire foreclosures, there is little sympathy for the rich, even if they are crying too.

“It’s not a matter of feeling for someone in particular as far as walks of life, I think pretty much America is in trouble,” said Ashley. “It’s just what it is. It’s the situation of our country.”

It appears the situation is not showing any signs of improvement.