The number of bank foreclosure properties priced more than the conforming loan limit of $729,750 has been rising, according to a recent survey conducted by the Mortgage Bankers Association and studies by several property research firms.

Based on data from the researchers, default rates on prime jumbo mortgages have been increasing, particularly home loans provided by lenders from 2006 to 2008.

Robert Toll, chief executive of luxury house builder Toll Brothers, admitted that the rise in prime jumbo loan foreclosures is a threatening development for the home building industry.

Additionally, the MBA data showed that out of three recent foreclosures, one was a prime loan, indicating a significant rise from the one-in-five ratio last year.

The percentage of prime mortgages in foreclosure increased by 3 percent, an increase of 51 points from the number in the first quarter and a rise of 158 points from the number during the same period last year. Default rates on prime mortgages have also been rising.

In the past, foreclosure actions are largely filed for homes valued below $100,000 and houses priced between $100,000 and $300,000. In some states like California, the average sales price for bank foreclosure properties in the past was $192,031. But now foreclosures have been happening in high-end communities, where most mortgages are far above $729,750.

One example is the foreclosure of a luxury residential project in Vero Beach, Florida by Regions Bank, with the project developer owing the bank a total of $22 million.

Another is a luxury residential project in Dallas, which was planned to feature a shopping mall. It has been foreclosed by Wachovia Bank, now a unit of Wells Fargo.

Analysts said that the number of high-end foreclosure homes would have been higher if luxury-home owners do not sell their distressed homes through short sales.

To avoid the humiliation of foreclosure, many owners of high-end homes exert all efforts to sell their properties before they are foreclosed. With their business and social networks, they are able to negotiate with their lenders to accept short-sale proceeds as payments for their jumbo loans.

Banks meanwhile prefer short sales when high-end homes are involved because they lose much more in high-end foreclosures compared to what they lose in the foreclosure of lower end homes.

Across the country, bank foreclosure properties continue to impact not only the lives of defaulting homeowners, buyers and investors, but also the financial conditions of banks heavily exposed to the commercial and residential sector.