Celebrities hit by foreclosure crisis , Bad health, the country's economic downturn, divorce, loss of job, coupled with the subprime mortgage fiasco are responsible for the nation's foreclosure critical problem. Celebrities, the rich and famous, are finding themselves facing the same issues.
The subprime lending market doesn't play into celebrity foreclosures, but wealth and fame aside, the reasons behind celebrity foreclosures are much like those cited by the average person.
In May, 2008, Jose Canseco, The 1986 Rookie of the Year for the Oakland Athletics, owed more than $2.5 million on his 7,300-square foot California mansion. He decided to let the Encino home go.
Canseco told the Associated Press: "It didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else." While he is NOT the first celebrity to face foreclosure, he is one of the first to admit it publicly.
A simple error that snowballed caused the foreclosure of Aretha Franklin's home in May. According to Franklin, an attorney's mistake in overlooking a mere $445 in taxes and then late fees forced her home into foreclosure. Franklin planned to pay the accumulated $19,000+ to stop the sale.
In June, 2008, 85-year-old Ed McMahon's health played a huge role in his foreclosure troubles. The sidekick to the late Johnny Carson and pitchman for many products, found himself only able to work in a limited way due to a broken neck he had suffered 18 months prior. Like others caught in a health-care crisis, McMahon was fighting to keep his Beverly Hills home out of foreclosure.
McMahon told Larry King that a couple of divorces, his injury and then the lack of income because of the injury snowballed. "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," he told King.
Add to that the flat housing market. His home had been on sale for 2 years. Like many others in his situation, McMahon had multiple loans against the property, two mortgages and then a $300,000 loan.
As of June, he was $644,000 behind on payments on his $4.8 million mortgage. The Wall Street Journal reported in June that Countrywide Financial Corp. filed a default notice with the courts in February.
Also in June, two athletes, The Dallas Cowboys "Pacman" Jones and former NBA star Vin Baker found themselves in danger of losing their homes to foreclosure. Baker, formerly of the New York Knicks and Boston Celtics, among others, has been touched by foreclosure twice during the housing slowdown. It hit his restaurant first, then his Connecticut home. His home had been on sale for a long time---another common denominator in the escalating foreclosure rate---before finally succumbing to the overwhelming debt, again, a typical foreclosure tale. It was reported that he had been asking in the neighborhood of $7 million for the home. The pre-foreclosure price was in the $2.5 million range.
Pacman Jones lost his North Carolina home to foreclosure in April, 2008, although it first entered the foreclosure system in 2007.To add insult to injury, while he had 30 days to remove his belongings from the home, someone broke in and stole items, including a pool table. Jones' loss of income from football was cited as the reason for his troubles.
Other celebrities in foreclosure trouble include Latrell Sprewell, a former NBAer best known for choking a coach during practice. Sprewell owed $295,000+ on a home in Milwaukee he purchased for $405,000 in 1994. He failed to make the mortgage payments from Sept., 2007-Jan., 2008. Ironically, Sprewell turned down $21 million to extend his contract with the Minnesota Timberwolves, saying he had to feed his family.
Marion Jones, the disgraced former Olympian who was just released from jail this month after admitting she lied during the steroid investigation, lost her home to foreclosure. Hers is an unusual circumstance, however. Jones, a gold medal winner stripped of all medals from all of her Olympic games, admitted to using performance enhancing drugs prior to her wins in the Sydney Olympics.
So while the old adage, they put their pants on one leg at a time, just like the rest of us, is true, it's also true that bad times and bad decisions hit the rich and famous just as often as they do the rest of us.
The subprime lending market doesn't play into celebrity foreclosures, but wealth and fame aside, the reasons behind celebrity foreclosures are much like those cited by the average person.
In May, 2008, Jose Canseco, The 1986 Rookie of the Year for the Oakland Athletics, owed more than $2.5 million on his 7,300-square foot California mansion. He decided to let the Encino home go.
Canseco told the Associated Press: "It didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else." While he is NOT the first celebrity to face foreclosure, he is one of the first to admit it publicly.
A simple error that snowballed caused the foreclosure of Aretha Franklin's home in May. According to Franklin, an attorney's mistake in overlooking a mere $445 in taxes and then late fees forced her home into foreclosure. Franklin planned to pay the accumulated $19,000+ to stop the sale.
In June, 2008, 85-year-old Ed McMahon's health played a huge role in his foreclosure troubles. The sidekick to the late Johnny Carson and pitchman for many products, found himself only able to work in a limited way due to a broken neck he had suffered 18 months prior. Like others caught in a health-care crisis, McMahon was fighting to keep his Beverly Hills home out of foreclosure.
McMahon told Larry King that a couple of divorces, his injury and then the lack of income because of the injury snowballed. "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," he told King.
Add to that the flat housing market. His home had been on sale for 2 years. Like many others in his situation, McMahon had multiple loans against the property, two mortgages and then a $300,000 loan.
As of June, he was $644,000 behind on payments on his $4.8 million mortgage. The Wall Street Journal reported in June that Countrywide Financial Corp. filed a default notice with the courts in February.
Also in June, two athletes, The Dallas Cowboys "Pacman" Jones and former NBA star Vin Baker found themselves in danger of losing their homes to foreclosure. Baker, formerly of the New York Knicks and Boston Celtics, among others, has been touched by foreclosure twice during the housing slowdown. It hit his restaurant first, then his Connecticut home. His home had been on sale for a long time---another common denominator in the escalating foreclosure rate---before finally succumbing to the overwhelming debt, again, a typical foreclosure tale. It was reported that he had been asking in the neighborhood of $7 million for the home. The pre-foreclosure price was in the $2.5 million range.
Pacman Jones lost his North Carolina home to foreclosure in April, 2008, although it first entered the foreclosure system in 2007.To add insult to injury, while he had 30 days to remove his belongings from the home, someone broke in and stole items, including a pool table. Jones' loss of income from football was cited as the reason for his troubles.
Other celebrities in foreclosure trouble include Latrell Sprewell, a former NBAer best known for choking a coach during practice. Sprewell owed $295,000+ on a home in Milwaukee he purchased for $405,000 in 1994. He failed to make the mortgage payments from Sept., 2007-Jan., 2008. Ironically, Sprewell turned down $21 million to extend his contract with the Minnesota Timberwolves, saying he had to feed his family.
Marion Jones, the disgraced former Olympian who was just released from jail this month after admitting she lied during the steroid investigation, lost her home to foreclosure. Hers is an unusual circumstance, however. Jones, a gold medal winner stripped of all medals from all of her Olympic games, admitted to using performance enhancing drugs prior to her wins in the Sydney Olympics.
So while the old adage, they put their pants on one leg at a time, just like the rest of us, is true, it's also true that bad times and bad decisions hit the rich and famous just as often as they do the rest of us.