Last Updated Jul 27, 2011 11:55 AM EDT
Grammy-winning R&B singer-songwriter R. Kelly is undergoing foreclosure proceedings on his south
suburban Chicago home. The 11,140 square foot property was purchased by the superstar in 1999 for $3.5 million. Unfortunately, the home isn't worth what Kelly paid.
Like a majority of homeowners in America, Kelly is underwater with his mortgage, owing a balance of $3 million on a residence that lost 26 percent of its estimated value between 2009 and 2010.
But the performer, whose net worth is estimated by multiple sources to be in the neighborhood of $150 million, clearly has the funds to meet his loan obligations. Yet Kelly has not remitted a monthly mortgage payment since June 2010, per a complaint filed by J.P. Morgan Chase Bank last month in Cook County Circuit Court. So what gives?
According to a report from Crain's Chicago Business, the story is one I hear from my readers every week: Kelly "stopped making payments on the mortgage in an attempt to force the bank to negotiate a modification of the loan." Even a man with tremendous financial and legal resources has been unsuccessful in securing more equitable terms from his lender. A spokesman for J.P. Morgan Chase declined comment on the Crain's story.
It appears that Kelly ceased to occupy the home right about the time he stopped making payments. It is unlikely that the star will ultimately default, but his loss would certainly be someone's gain. For a steeply discounted REO price, the buyer could net themselves a two-story house atop a 3.7 acre site. The home features six full bathrooms, seven half-baths and a four-car garage.
Chicago's housing woes have been somewhat overshadowed by the foreclosure news from other cities and states, like Las Vegas, Phoenix and Miami. According to RealtyTrac, the Windy City is first in the country in the rate of ongoing foreclosures. Chicago is also selling fewer homes each month than any other major metropolitan area outside of New York City. Given this perfect storm of housing market depressants, Kelly may have tough negotiations ahead with his lender.
Does it provide an odd sort of comfort to learn that the stars are really just like us?
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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.