I was watching Good Morning America today when a story on Ed McMahon’s mortgage woes came on. The longtime TV sidekick
is in danger of losing his multimillion-dollar Beverly Hills home to foreclosure. Documents show that McMahon is nearly $644,000 behind in payments on a $4.8 million mortgage loan he got in 2005. Countrywide Home Loans Inc. filed the notice of default on Feb. 28, with the amount owed to “increase until your account becomes current,” according to documents obtained by Celebtv.com.
As of Wednesday afternoon, McMahon’s Mediterranean-styled house was still in the process of foreclosure; the bank hasn’t taken it over yet and no trustee sale date has been set. McMahon and his wife, Pamela, are having “very fruitful discussions” with the lender to resolve the problem, spokesman Howard Bragman said Wednesday.
It’s not a story I normally pay attention to, but the lead-in tease from Diane Sawyer caught my ear:
Further proof of the far reach of the economic downturn — the housing crisis in the tony neighborhood of Beverly Hills? Where a banks is now threatening to foreclose on the mansion of TV veteran Ed McMahon.
A real estate expert quoted by the Associated Press attempts to make the same point:
The former “Star Search” host has found himself in the same situation so many homeowners have recently, said Daren Blomquist, spokesman for RealtyTrac, which follows foreclosure filings. He found that McMahon has taken out several loans on the house over the past few years, including a $300,000 home equity line of credit the same day he took out the $4.8 million loan in November 2005.
“You’re using your house as a piggy bank because there’s so much equity — at least back in 2005 — so you’re able to take money out of it and use that for just spending in any way you see fit,” Blomquist said. “But the problem with that in the long term is that with the housing in this market, you don’t see it continue to go up in property value. Now, you see it going down in many areas … and you still have to pay your mortgage payments. You don’t have the option to take more cash out of the house.”
It certainly is a sad story, but it’s not exactly the same thing as a family in Jamesburg losing a $200,000 Cape Cod because the were conned by some bank into borrowing more than could afford on an adjustable-rate mortgage. McMahon is not likely to end up on the street — in fact, he’s planning to live there as long as he can and is in the process of negotiating a settlement, something that most of those hit by the sub-prime crisis have been unable to do.
Hank Kalet 