Even celebs get hit by foreclosure

Whenever I talk to people about foreclosures, they instantly think of homeowners who got too greedy, who sought mortgage loans with artificially low initial interest rates to get into a home that was too costly for them.

That’s why the news earlier this month that former Tonight Show sidekick Ed McMahon may lose his home in Beverly Hills to foreclosure is such a shocker to some. But anyone who’s been paying attention to the foreclosure mess should have realized by now that no one is immune to mortgage-payment woes.

I feel bad for McMahon. Most people will look at his case as a bit of a joke. McMahon’s house, which is on the mansion, has an asking price of more than $5.7 million. To most people, it seems ridiculous to think of such a pricey home falling into foreclosure.

But it’s not ridiculous. It just shows that the foreclosure crisis hitting the country isn’t relegated to either the poor or the greedy. Anyone can lose a home. Even supposedly well-off celebrities. A spokesman for McMahon said the entertainer broke his neck in a fall about a year-and-a-half ago, and hasn’t been able to work since.

This is the real story of foreclosure in this country: I shudder to think of how many well-meaning homeowners have lost their homes to foreclosure precisely because they did suffer a serious injury, one that curtailed their ability to work. There are far more people who’ve lost their homes because of this than there are those who’ve entered foreclosure simply because they were too greedy. Unfortunately, critics like to point to the relatively small number of “greedy buyers” and ignore the very real unfortunate cases where a home is lost due to bad luck and circumstances.

The McMahon case is interesting, too, because the lender involved in it is Countrywide. That lender, of course, has been widely criticized during the housing crisis for passing out countless bad mortgage loans, many of which are now ending in foreclosure.

I hesitated to write about McMahon’s troubles because it’s already been covered to death and also because the entertainer’s story has become such a punchline to the snide. But the case is such a good example of all the misperceptions surrounding foreclosure that I simply had to report on it.

What are your thoughts? Does McMahon deserve our sympathy? Or is he just one more person whom, in your opinion, made a bad housing decision?