• Closet? R. Kelly’s Whole Estate Trapped in Negative Equity

    When recording artist R. Kelly was hit with a $2.9 million foreclosure lawsuit on his mansion 30 miles outside of Chicago in July, WMAQ-TV reported it was a strategic foreclosure. The value of the estate had plunged from an estimated $5.2 million to $3.8 million in the span of one year, and Kelly had stopped making payments in an effort to get the loan modified. Now that the custom home is worth less than he owes, Forbes reported on December 14, 2011, that the Grammy-winner is listing the property as a $1.595 million short sale.

    The 22,000-square-foot mansion was built in 1997 and sits on a private, wooded lot surrounded by 12-foot high concrete and wrought iron wall, according to Forbes. The original loan Kelly was issued for the home in 1999 was for $3.5 million. In August, Kelly sold his former 8,000-square-foot Lakeview property for $2.74 million.

    As Forbes noted, the R&B singer is no stranger to legal trouble. In June 2008, he was acquitted of child pornography charges in a high-profile trial, and three years later Kelly’s former manager sued the singer for breach of oral contract and fraud. A month after that, he was hit with a tax lien for $837,000.

    While Kelly might not represent the average homeowner in need of foreclosure help , his story still demonstrates the effect the housing market is having on everyone-even the rich and famous. If you too have been unsuccessful in getting your own mortgage modified but know that neither a short sale or a strategic foreclosure really suits your needs, a Chapter 7 or Chapter 13 bankruptcy could allow you to stay in your house while helping you manage your bills.

    Is your house now worth less than you owe? How are you addressing your own negative equity situation?

    Benjamin Brand Services – Chicago bankruptcy lawyer

  • Singer of “I Believe I Can Fly” Brought Down by Foreclosure

    Award-winning R&B artist R. Kelly is facing a $2.9 million foreclosure suit on his mansion in Olympia Fields.

    The music artist has not made a payment on his mortgage since June 2010 according to a complaint filed by J.P. Morgan Chase Bank N.A. in Cook County Circuit Court. The bank filed the lawsuit in June 2011.

    The mansion is a two-story house on a 3.7-acre site. Included in the home are six full bathrooms, seven half-baths and a four garage, as listed by the Cook County Assessor’s website.

    Mr. Kelly constructed the 11,140-square-foot home in 2000, but has not lived there for over a year according to an individual familiar with his movements. The source said that payments were stopped in an attempt to force the bank to negotiate a modification of the loan.

    At issue is the current appraisal amount on the home. The mansion appraised for $5.2 million in 2009, but fell 26% to $3.8 million in 2010. The home is now worth less than the debt, according to the source.

    The current principal amount due is over $2.9 million. Not included in the debt is unpaid interest, which is accruing at the rate of $251 a day, and various related charges from the bank.

    Benjamin Brand Services – Chicago foreclosure attorney