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[flvegan]

5. Why is that a "big and risky mortgage" for Paris Hilton?

5.25% seems about right because someone worth $300 million or whatever, with significant income, isn't really a risk. That's what credit is, risk. What's the downside for the lender? Paris Hilton isn't going into foreclosure, it would be hell for her "brand" which has a ton of value and the Hilton name likely wouldn't stand for it. If the house isn't worth as much, they go after her for deficiency (depending on the state laws).

As much as it pains me to say it, she's smart for taking the loan. If she's wisely invested, she's making a shit ton more than 5.25% on her portfolio. Use their money.