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Wednesday, June 4, 2008

How Bad Is the Mortgage Crisis?

posted by on June 4 at 8:57 AM

This bad.

Ed McMahon, the longtime sidekick to Johnny Carson on “The Tonight Show,” is fighting to avoid foreclosure on his multimillion-dollar Beverly Hills estate.

McMahon defaulted on $4.8 million in mortgage loans with a unit of Countrywide Financial Corp., which filed a notice of default in March, according to ForeclosureRadar, a company that sells default data pulled from public records.

The 85-year-old pitchman for various products, including American Family Publishers, is the highest-profile person to be caught up in the nationwide real estate downturn and mortgage crunch.

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How bad are geriatrics with money?

Posted by Bellevue Ave | June 4, 2008 9:07 AM


Posted by heywhatsit | June 4, 2008 9:11 AM

he should just tell his lenders that his check from publishers' clearinghouse is in the mail and he is an instant millionaire!

Posted by SeMe | June 4, 2008 9:17 AM

Except no. Super-rich former celebrities have money problems all the time, this is nothing new.

"...McMahon fell and broke his neck about 18 months ago and has been unable to work since."

I think his lack of income for the last year and a half is why he's losing an insanely expensive house. Also apparently he took out a number of gigantic loans. So, just like shark attacks, this seems like The News reaching to make up trends that don't really exist.

Posted by mattymatt | June 4, 2008 9:19 AM

I heard he is having a hard time selling his house because it is in the same neighborhood as Britney Spears. Although I'm not sure why that would make a huge difference - I still was able to sell my house and I lived next to the crazy cat lady.

Posted by smp | June 4, 2008 9:22 AM

4.8 million in mortgage loans sounds like a bad idea at any time.

Posted by tiffany | June 4, 2008 9:25 AM


"this seems like The News reaching to make up trends that don't really exist."

Yeah, in reality the economy is doing swimmingly. What mortgage crisis?

Posted by Bison | June 4, 2008 9:30 AM

Maybe he can bunk with the new host of the Today show? I think he has a spare 3500 square foot guest quarters over one of his garages ...

Posted by Will in Seattle | June 4, 2008 9:31 AM

Unless his mortgages were some sort of exotic products -- or Ed McMahon depended on mortage-backed securities for his income -- it's not clear to me how this is related to the mortgage/credit crisis.

Posted by joykiller | June 4, 2008 9:33 AM

The principle is the same at all levels of overmortgaging. A $500K Seattle shitbox condo mortgage is no less risky for a $40K earner than the $4.8M mansion mortgage has been to Ed. It all depends on the borrower's ability to pay the bank its monthly rent on the nut. Get behind in payments to learn who really owns your home.

Posted by tomasyalba | June 4, 2008 9:33 AM

How sad is it that an 85 year old still hasn't payed off his mortgage?

Posted by keshmeshi | June 4, 2008 9:45 AM

@11 That made me laugh. Pretty sad I guess.

Posted by PopTart | June 4, 2008 9:48 AM

@4, Really, by 85, especially with his kind of income, he should not have to work to keep his house.

@10, Thats not so much a problem with overmortgaging, but a problem of having a mortgage/rent payment at all. Unless your one of the few who can own a place to live outright, your ability to stay in your home is contingent upon you having the income or savings to make the payments.

Posted by Giffy | June 4, 2008 10:05 AM

A lot of older folks got caught up in this. Easy home equity loans, refinancings to travel/supplement diminishing pensions/pay for out-of-pocket medical expenses. It's tough to spot them sometimes, since it's so shameful to get caught like this when you supposedly are older, wiser and more responsible.

If you have good relations with homeowning family elders, keep an eye peeled to see if they drastically cut back on usual expenses, especially medical needs. Could be an early warning sign that a teaser refinance mortgage is resetting, or that the bank's shut down their home equity line.

Posted by tomasyalba | June 4, 2008 10:16 AM

Sounds like McMahon's been getting some tragically stupid financial advice. He should have millions in the bank; he earned enough. He shouldn't be working at 85, and he shouldn't be holding any multimillion dollar notes, either.

Posted by Fnarf | June 4, 2008 10:18 AM

Crisis or stupidity? I do not fell bad for him one bit. If you cannot front the cash for your multi-million dollar home then you deserve what is going to you. I bust my ass every day to afford my crappy Capitol Hill studio that just posted notices it to is going condo and I have 90 days to find something smaller for twice the price. So yeah boo fucking hoo to those who choose to live the lifestyle instead of living their life.

Posted by Going Condo | June 4, 2008 10:39 AM

I hope he isn't reduced to dining on Alpo.

Posted by inkweary | June 4, 2008 11:26 AM

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