Celebs Not Immune To Foreclosure

Real Estate Crunch Hits Everybody, Even High-Profile Entertainers

(AP)  Tabloid magazines like to reassure us that celebrities are just like us - they go grocery shopping, take their dogs for a stroll around the neighborhood, even pump their own gas.

These days, that can also hold true when it comes to the plummeting real estate market. Several celebrities have dealt with foreclosure issues on their luxurious estates and many more have had to drop their asking prices, putting some high-profile faces on a growing problem: the real-estate meltdown is now hitting every socio-economic class.

The case of Ed McMahon has shown that you can make millions over a lengthy show business career and still find yourself in foreclosure. Johnny Carson's former "Tonight Show" sidekick owes more than $644,000 in mortgage payments on his Mediterranean estate in Beverly Hills, a house he and his wife have been trying to sell for the past two years. The six-bedroom, five-bathroom home - in the same exclusive, gated community where Britney Spears lives - is now on the market for $6.5 million, down from an original price of $7.6 million.

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Photos: 2007 In Photos: Mortgage Crisis

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The 85-year-old television personality, who has been unable to work since breaking his neck in a fall 18 months ago, described his economic problems as "a perfect storm."

"If you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen," McMahon said on "Larry King Live" recently. "You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together."

McMahon certainly is not the only celebrity to find himself in such financial trouble. Former NBA player Vin Baker saw his home in Durham, Conn., go up for auction last weekend. The seven-bed, six-and-a-half-bath mansion, on about 11 acres with a basketball court and a bowling alley, had been on the market for $2,950,000. Earlier this year, former baseball star and "Juiced" author Jose Canseco stopped making payments on his $2.5 million home in the upscale Encino section of LA's San Fernando Valley.

Rick Sharga, vice president of marketing for RealtyTrac, which monitors foreclosures, says that people of any income level can get in trouble by buying overvalued homes at the peak of the market that they ultimately can't afford.

"Ed McMahon's a sympathetic character in this scenario in that he got into a house that possibly he could have afforded if he had been able to keep working, then he had an injury that upset his financial apple cart pretty badly," Sharga said. "What you don't know is, in a normal real estate market, if the same lender would have taken a look at an 82-year-old man at the tail end of his career and written him a $4.6 million mortgage he had to keeping working to be able to afford."

It's not all doom and gloom, of course. Avril Lavigne listed her nearly 6,900-square-foot Mulholland Estates mansion for $5.8 million and, after just 36 days on the market, recently accepted a cash offer of $5.2 million.

[sunburn123]

oops ... I mean www.celebforeclosure.com ... guess I''m the foolish one ;)

[sunburn123]

Funny. I check www.celbforeclosure.com every day to follow this stuff. Crazy how people with that much money can be that foolish.

[barbaraf4]

"Why don''t they just pay cash for these homes?"
Posted by whiskyrocker
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Most business managers would advise you not to tie up equity in real estate.

Having said that, what is there about celebrities that causes them to feel entitled to all these trappings of wealth? Buy a house you can afford and then start investing. The glitz and glitter won''t last forever. Have something in reserve.

[libsluv2spit]

Because of the tax deductions on mortgage payments!!

Posted by NewTagAgain at 02:55 PM : Jul 09, 2008
+ report abuse

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yeaaaaaaah right...this moron has to pay his mortgage before he can get the deductions

[reunionpi]

Before Ed McMahon: Pamela''s Federal Tax Lien, judgments and liens

http://webofdeception.com/pamhurnmcmahon.html

[patriot12436]

I find it very hard to be sympathetic to someone who has made millions and didn''t have the common sense to pay for a home in full. The people who worked hard all their lives and are now losing everything i feel sympathetic for.

[sociald63]

instead of saving or investing - these overpaid losers are spending thier $$ on clothes, cars, dope, sexxx, sushi, etc ... BOO-HOO-HOO. gosh, my salary is only 63k but i have manage to send my kids to college and pay off my mortgage

[docpeter-2009]

God forgive me here, but i really don''t see why anybody should feel sorry for celebs or Michael Vick or any other wealthy person who has fallen on a little hard time and can''t pay for their $M home. Geez what a sarcastic shame.

Get real, Celebs are just like us poor runts when it comes to the mortgage crisis. He11 they could have bought 4 or 5 $250K homes and then they would only lose 1, they would still have the others to live in.

[louklou51]

LOL, Boo hoo hoo, why don''t they cry those crocodile tears.
How can millionaires have trouble making house payments? Oh, that''s right, they are too busy enjoying the good life while everyone else suffers. I have no sympathy at all for them.

[newtagagain]

Why don''''t they just pay cash for these homes?

Posted by whiskyrocker

Because of the tax deductions on mortgage payments!!

[whiskyrocker]

Why don''t they just pay cash for these homes?