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From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

MELISSA BLOCK, HOST:

And I'm Melissa Block. The housing crisis has touched many people, including, increasingly, the rich. Housing counselors around the country say more people are struggling to keep their million dollar homes.

As NPR's Yuki Noguchi reports, it's a twist on a familiar story of hardship, but with some very different numbers.

YUKI NOGUCHI, BYLINE: Expensive homes dot the hills overlooking the beaches and boutiques of Laguna Beach, California. It's a tony backdrop for an event sponsored by a nonprofit group trying to help financially distressed home owners.

UNIDENTIFIED WOMAN: We ask you to fill all that out so that your counselor can help you and go over your financials.

NOGUCHI: John Jalali and his wife are here seeking a loan modification on their house, once valued at over three million dollars, now worth about two million.

JOHN JALALI: I mean, we really didn't want to be in this position.

NOGUCHI: In fact, Jalali says they never intended to live there. It was built as an investment they hoped to sell, but that was in 2008, the year the market crashed, and their income dramatically declined. They had to sell their other assets, including their old home, and move into the big one in order to avoid foreclosure.

JALALI: We were very happy in our little home. It was very nice. We were comfortable paying $2,500 per month and...

NOGUCHI: And now what is your mortgage payment?

JALALI: Oh, my God, it's $10,000.

NOGUCHI: Their two grown sons moved in to help pay the mortgage. Their combined income still wasn't enough. They're behind on payments. Jalali seems jovial by nature, but even when he laughs, he nervously taps a folio of financial documents. He says he understands his story might not meet with much sympathy.

JALALI: Everybody hears this big, big number and well, this guy doesn't need, maybe, any modification. Let's take his home away from him.

NOGUCHI: Jalali says fighting the banks is bureaucratic and emotionally wrenching. His wife scours the Web for possible resources late into the night. He says they aren't asking for loan forgiveness, just a forbearance on part of the loan until his family's income can recover. He says he will never again put money at risk.

JALALI: No, I never going to make any investment any more. I just gave up.

NOGUCHI: You learned your lesson?

JALALI: Yeah. Just - I want to be a simple man. I just don't want to go through all this. It's ruined our life.

NOGUCHI: It's not just that the number of million dollar homes in foreclosure has spiked. They also make up a larger percentage of homes with foreclosure notices, according to RealtyTrac. Housing counselors around the country told me that in the past year about half of inquiries come from wealthy or formerly wealthy home owners.

Geoffrey Anderson is executive director of Westchester Residential Opportunities, a housing counseling group that's fielding calls from wealthy New York suburbs.

GEOFFREY ANDERSON: These are folks that are losing their jobs on Wall Street. These are folks that live in Scarsdale and Bronxville. These are the folks that own million dollar homes that have used up all their life savings and are now coming to us because there's no other choice.

NOGUCHI: It can be harder to modify a big mortgage. Most exceed the loan size limit for government-sponsored programs designed to help home owners refinance. Some counselors say banks are less likely to modify loans on homes in areas with relatively low rates of unemployment or foreclosure.

Also, with a very big loan, many borrowers can't afford even a modified payment. On the other hand, banks typically take longer to foreclose on expensive homes and families with means can often afford lawyers or financial experts to help.

Carolyn Haynes-Thomas says she expects many more expensive homes to fall into trouble this year, especially in the Sacramento area, where she's director of a housing counseling program.

CAROLYN HAYNES-THOMAS: It's, like, really frightening.

NOGUCHI: Sacramento was an expensive market that lost a lot of value. About a third of borrowers there chose low initial payment loans, most of which are due to reset to higher amounts this year. When that happens, Haynes-Thomas predicts, many home owners will simply stop making payments.

HAYNES-THOMAS: But they are smart. Right? Because, typically, they were higher income earning, better credit borrowers. Right? So we know what's coming. We're going to have literally thousands of strategic defaulters.

NOGUCHI: And that's just in Sacramento because the loans are for more than the homes are worth. Haynes-Thomas worries home owners will have little incentive to stick it out.

HAYNES-THOMAS: Do I want to stay there now and pay, you know, hundreds more per month on a mortgage payment than somebody is across the street? Maybe they're renters. Probably not. So they're - but are they going to move? Are they just going to pick up and - oh, no. You know, let the lender take a year and a half to foreclose, stack my money. Right? And then they're going to move.

NOGUCHI: They'll move, hoping to leave their problems behind. Yuki Noguchi, NPR News.

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