If Ed McMahon Can't Pay His Mortgage, Things Must Really Be Bad!

It was released this week that Countrywide Mortgage Company filed a notice of default on February 28 for the $4.8 million dollar loan on a home belonging to TV personality Ed McMahon. The media is urging us to feel sorry for McMahon. They are giving plenty of reasons to hate the "big, bad" mortgage company and "save" dear old Ed. Maybe I am callused, maybe I am unable to invoke sympathy, but I have come up with the top five reasons not to feel sorry for Ed McMahon (I would have stayed in true Late Night form and put ten, but then this post would have been too long).

Reason Number 5: Most individuals at the age of 85 don't or can't work any more.

Spokesman, Howard Bragman, has said that the ideal situation would be if McMahon would heal from his neck injury (evidently he fell and broke his neck 18 months ago and has been unable to work) and be able to go back to work. Granted, I am a Dave Ramsey follower, so it makes no sense to me that you don't have any money to pay your bills at 85, let alone have a mortgage at the age of 85. What happened to all that money he has made in the 65+ years he has been working? Was none of it saved? Was none of it invested? I do feel sorry for the man working a minimum wage job who gets hurt and is unable to work to support his family. Ed McMahon has not been working minimum wage jobs. He should not have to work at the age of 85 to pay his mortgage.

Reason Number 4: Hollywood wives don't work.

I watched an interview last night with his wife, third I believe, who has to be at least 30 years younger than him (although it can be deceiving determining the ages of California women). Is her neck broken too? What is stopping her from getting a job? If we were in foreclosure and David was unable to work, do you think that I would be doing nothing? I would be waiting tables, sacking groceries, picking up trash, cleaning houses, anything I could find to make money to keep our heads above water. Maybe she could think of a reality show to pitch.....

Reason Number 3: He has a second mortgage out on the house.

Oh, Ed, never, never use the equity in your home for anything - leave it alone! Evidently in addition to the $4.8 million dollar loan, Ed took out a $300,000 loan against the value of the house. Oh I would love to hear Dave Ramsey talk to a caller with a story like this! That is one of the biggest mistakes a person can make dealing with finances. It would be better to sell everything, cash in 401K's (almost never recommended) or take out a personal loan than to borrow against the equity of your home.

Reason Number 2: He won a $7.2 million dollar lawsuit against a plumber when a bad plumbing job created mold that had to be removed.

I know that he probably spent some of the money to clean up the mold and I know that can be a costly job. I also know that he probably had more than half of the money left after the clean up took place, plenty to pay off the home loan. David and I sit around and day dream sometimes about if we won the lottery (pretty big dreams since we don't even play), but our plans start with giving some to the church, paying off our school loans, paying off our house, setting it up in mutual funds so we will never have to worry about anything, saving for kids college, then we start thinking about new cars, cruises, the really fun stuff. Now, we have never had that kind of money, but I cannot imagine peeing (I try to keep the blog rated PG!) all that money away and having nothing to show for it.

And the number 1 reason I do not feel sorry for Ed McMahon: His house has been on the market two years priced at $6.25 million dollars or half a million over what it is valued at ($5.75 mil).

Yes, I had to read that several times too. The house is valued at $5.75 million dollars. He is asking $6.25 million. Why not talk to Countrywide and negotiate a short sale or maybe listing at the amount owed on the house and see what that does? He is not in a position to gain from his investment. He is $600,000 behind on his loan for goodness sake! Get out from under the house and move on. I will not claim to be a real estate expert, but if a house doesn't sell in two years, isn't lowering the price one of the first things you do to move it?

I tried to put a comic light on this, but I do agree that there are problems in the housing loan industry. Three years ago, buying a home was almost like buying a car from a "no credit no problem" lot. "Do you have a job and a checking account? We can get you moved in this weekend!" Home lenders were offering loans to many people who had no business buying a home. Lenders were offering no money down, interest only, and adjustable rate mortgages that got people in the homes, but took advantage of the situations. Those lenders were wrong and they should have to answer for their actions. But this is not one of those situations. This is someone who did not pay his bills first and now is in a sticky situation. Ed McMahon was not affected by the weak economy or the bad housing market. If someone is working at the age of 85, there should be a plan on how to take care of things if they suddenly become unable to work. He made bad decisions.