Feb. 28, 2012 at 10:43 AM ET
If you’re living in an expensive McMansion and can’t make the mortgage payments you may be better off than a homeowner of a modest split-level that’s underwater.
Some banks are more lenient when it comes to kicking out cash-strapped homeowners of expensive houses, compared to those in more humble dwellings.
That's the conclusion of a Wall Street Journal analysis published Tuesday that found, “nationally, borrowers with loans of at least $1 million were in default for an average 792 days last year before banks repossessed their homes.” Homeowners with mortgages under $250,000, the study found, were kicked out six months earlier.
The top five states with the biggest disparity in eviction rates were Kentucky, Missouri, Indiana, Utah and Michigan. And the states with no measurable difference between fancy houses and dinky digs were South Dakota, North Dakota, Iowa, Rhode Island and Nebraska.
Where there was a difference between eviction rates, the Journal cited several possible reasons:
It’s more evidence of a broken foreclosure system in the United States. Earlier this month, the nation’s five largest banks agreed to a $25 billion settlement to end an abusive foreclosure practices investigation launched by the government.
In announcing the deal, President Barack Obama said: "We have reached a landmark settlement with the nation's largest banks that will speed relief to the hardest hit homeowners.''
Hopefully that will be the case for not just palace dwellers but cottage owners too.