The mortgage crisis is so bad, it's now claiming celebrities as victims: Evander Holyfield's $10 million home in Fayette County, Georgia; Jose Canseco's home in Encino, California; and Ed McMahon's $4.8 million home in Beverly Hills, California are being foreclosed.
One guy that averted foreclosure was Michael Jackson: his Neverland Ranch auction was cancelled when an investment company bought the loan.
Ed McMahon even went on Larry King's show to explain how he got into financial hot water:
King: And the payments, you can't make -- what's the problem?
Ed McMahon: Well, 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. 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. [...]
King: But, Pam, the assumption is that the McMahons are multimillionaires and multimillionaires -- how much behind are you, $644,000, right? That's what's reported? ... If you're a millionaire, shouldn't you be able to pay $644,000?
Pam McMahon: I think over the years, you know, it's just a kind of a combination of maybe Ed working so hard and not kind of looking at proper management, which happens a lot. ... Because you're a celebrity, people think you have a lot more than you have. And you always want to take great care of all of your friends and your family and everybody, and you do. And you don't, and I think, you know, we didn't keep our eye on the ball. We made mistakes.
Transcript of Ed and Pam McMahon's interview with Larry King: Link
It's simple really with great earning come great responsibility to wisely spend and invest. Lots of these high profile types think the money stream will last forever until they realize otherwise.
But let's face it it's not like Ed is a typical American struggling with a foreclosure that has no finances or options that people he does.
You mistake Neatorama for a professional operation! :) Thanks for catching that - I've fixed it for ya!
Nobody said they were smart business people - they've got people to do that bit.
Duh.
Pam McMahon - it almost rhymes.
Oh, yeah - he's got money problems. Sucks, but hard to sympathize with him. A lot of people don't make in their lifetime as much as he owes.
(but I'm sure he'll survive...)
:o)
Now they will have to live in 2 million dollar homes!
I have never had a lot of money, and I have always said that if I ever do have a lot of money that I would invest it wisely and build businesses to make even more money so that I would never have to worry about not having enough ever again!
Guess my old one line joke on the way out the door (If Ed McMahon knocks on the door while I am gone, tell him I will be right back!) is no longer valid!
Damn! I feel like a true American Icon has just really let me down! Say it ain't so, Mr. McMahon!
NEVER get a loan with a flexible (aka adjustable) payment plan or a balloon payment at the end. When interest goes up, your payment goes way up.
Always ask for FIXED RATE for the term of the loan.
If I thought he was going to end up living in a '78 Ford and eating at soup kitchens I would be able to feel sorry for him. He will come out the other end of this living in far greater luxury than most of us can dream of. Without having learned a thing, most likely.
In response to a few of the posts here, I'm sorry, but no one's selling "bad loans."
If a loan company says you haev a flexible rate, and you sign it, YOU are responsible for paying that. Considering the government is forcing loan companies to go aginst the contracts, a TON of them are going belly-up. Why? They counted on the money that would come from those loans, otherwise they wouldn't have been able to make the ultra-low rate promises to people. If you sign something, you should be bound to it. It's not the insurer's fault you don't want to pay what you agreed to.