I read with great sadness that Victoria Gotti, the platinum blonde matriarch of Growing Up Gotti, was threatened with foreclosure. If this happens to a mob-connected reality TV star, can't it happen to anyone? How do I prevent it from happening to me?
A: To prevent it from happening to you, pay your mortgage!
Most of the homes in foreclosure in America today are there because of an evil combination of ill-advised mortgage products and sudden financial reversals, such as job loss. That's scary, and can be tough to avoid -- but it's not the scenario that usually hits the rich-and-famous.
The cause of the "Gotti Gotcha?" News reports say that Victoria Gotti hadn't paid her mortgage for two years. (Fans of celebrity real estate may remember the case of Ed McMahon, who had a similar attitude of I'm-going-to-toss-the-next-24-mortgage-bills-in-the-trash-and-see-what-happens.)
According to the New York Post, Gotti's lender, JP Morgan Chase, tried to sell the house in 2005. (Here's the current listing.) They then reached an agreement with Gotti that she would pay them $200,000 by February 2006 -- which, the Post says, she didn't do.
So the lessons here for ordinary citizens are pretty simple:
- Make your mortgage payments;
- If you can't make your mortgage payments, work out a deal with your bank;
- If you work out a deal with your bank, honor it;
- If you can't honor your deal with your bank (or decide not to), sell the house, oh, sometime in the three years that it will take the bank to catch up to you.
Photo of Gotti mansion courtesy Century 21 Laffey.