Kelly has reportedly avoided payments on this multimillion dollar mansion for over a year—a decision that may be catching up to him now. However, something just does not seem right about Kelly’s foreclosure—he is financially stable and just completed a very successful tour last year.
R. Kelly’s situation seems to mimic that of other celebrity situation. The news and popular real estate blogs are filled with information on celebrity foreclosures. However, these foreclosures even include the successful celebrities that continue to bring in a surplus of income due to high-profile tours and lead roles in popular films. Clearly, they are receiving enough income to pay their mortgage payments—aren’t they? Why, exactly, are these hot celebrities refusing to pay their mortgage? Simple: Because they can.
When it comes to celebrity foreclosures it appears to be one of two things. One: the celebrity is living outside of his or her means and banking on future success to successfully pay their mortgage payments. However, as they leave the spotlight they are struggling to make ends meet. Or two: instead of paying mortgage payments they splurge on new cars, luxury vacations, and other perks reserved for the rich and famous. In the first scenario these celebrities are like many other Americans facing foreclosure—they simply did not alter their lifestyles in time to account for the recession. In the latter situation, these celebrities are using the money to pay for other ego-centered desires—to have the newest and best of everything. The second category is exactly where R. Kelly resides.
In the end, many of the celebrities either come up with the money to pay off their delinquent mortgages (as is probably the case with Mr. R. Kelly), while others simply sell their homes capitalizing on their fame and therefore appealing to their wealthy fans. R. Kelly may be facing foreclosure, but the chances of him actually losing his home to foreclosure are slim to none. Rest assured, R. Kelly has more than enough money to make his mortgage payments and is simply living the “new” lifestyle of the rich and famous.
The law "closed the loophole in Hawaii foreclosure law that allowed lenders across the country to foreclose quickly ... without our local families having a chance of any accountability, and without our families having a chance to explain their side of the story," said Kim Harman, policy director for advocacy group Faith Action for Community Equity.
Fannie Mae decided to seek foreclosures in the judicial system rather than wait for the mediation process to be set up by Oct. 1. In the meantime, Hawaii is operating under what amounts to a moratorium on nonjudicial foreclosures.
Once established, the mediation system is expected to have a foreclosure turnaround time of four or five months - faster than the court process.
"Currently, nonjudicial foreclosures cannot be pursued in Hawaii. The judicial foreclosure process allows homeowners to raise any challenges to the foreclosure in court," said Fannie Mae spokeswoman Amy Bonitatibus in a statement.
Fannie Mae didn't expand on its reasons for moving its foreclosures to the courts, and it hasn't revealed how many foreclosures it owns in Hawaii, a fact that many of its homeowners don't even know.
"Shifting these cases to the Judiciary ... will result in a similarly frustrating situation of a backlog of thousands of cases and further frustration and delay, prolonging an already stressful situation for borrowers and all those involved," said Rodney Maile, administrative director of the courts, in written testimony to the Legislature.
Foreclosure filings were up slightly last month through June 27, to 166 compared with 109 in all of June last year, according to figures the Hawaii State Judiciary provided to The Associated Press. It's unclear how much of the increase can be attributed to Fannie Mae.
But a surge in court filings may be coming soon, both from Fannie Mae and other lenders that follow suit, said Ron Margolis of Hawaii Life Real Estate Brokers.
"Fannie Mae is just the beginning," he told lawmakers at a briefing last week. "We need to make the legislation not so rigid."
Hawaii had the nation's 11th highest foreclosure rate last year, with 12,425 foreclosure cases, according to real estate research firm RealtyTrac Inc. Only about 10 percent of those foreclosures were handled by state courts, a figure that would greatly increase if lenders opt out of mediation.
A lengthy, drawn-out foreclosure process in the courts will not only hinder the time before homes can be resold and lived in again, it also burdens other residents across the country who have nothing to do with the housing crisis, said Gary Fujitani, executive director for the Hawaii Bankers Association, whose members include the nine Hawaii-based banks.
"The more losses Fannie Mae takes, it comes indirectly from the taxpayers' pocket if they don't collect on a timely basis," Fujitani said. "Everybody's looking at Fannie as a private entity, but this is a government-owned enterprise now."
Even if all these foreclosures end up overseen by the courts, the law's defenders argue that judges can require lenders to provide the same documentation that would have been needed in mediation.
A slower foreclosure process would at least give residents every opportunity to fight for their homes and try to agree on a payment plan, said House Consumer Protection and Commerce Committee Chairman Bob Herkes.
Delays are also a gift to homeowners behind on their mortgages who can continue living in their houses during the foreclosure process.
"If we erred on this bill, we erred on the side of the homeowner, not the lender," Herkes said.
Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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