Ed McMahon Was He So Different?

In one of Ed McMahon’s last interviews he disclosed his frustrations of being forced to file for foreclosure over his $4.8M home.  Ed McMahon was a Superstar who made multi-millions of dollars over the course of his career.  However, during his last days he was forced to file for foreclosure because he was behind a reported $644K in mortgage payments.  To the everyday American the amount of money we are talking about is outrageous and not a realty.  However, Ed McMahon’s situation is not that different than the everyday American.  He owed money due to becoming divorced, he lived beyond his means, and he suffered a career ending neck injury in which he broke his back thus not allowing him to work anymore.  Many “everyday” Americans are experience the same problems.  They may be in endanger of foreclosure due to having an enormous amount of debt, lose of a job, or have come into a series of actions that have caused them to be in an extraordinary circumstances.  To relate to Ed’s circumstance to rest of America MF Report placed an example below:

Example: 

  • ED McMahon
    • Ed’s mortgage was worth $4.8M and owed $644K therefore he was behind by 13.42% on his mortgage payments.
  • Average Amercian Mortgage
    • The average American home was purchased for $247,900 in 2007 (height of market) according to the US census.  The average person in foreclosure is an estimated eight months or more behind on payments.  Therefore, average monthly mortgage $1,687 X 8 equals $13, 496 or 5.44%.

Ed was living far beyond his means.  His mortgage was greater because the value of his house was greater so his percentages may be greater than the average American, but he was a victim of circumstances just like every other American in financial distress.  His house was on the market for two years at the date of the interview and because he refused to lower the price of his house to a realistic market value he fell so far behind on his payments he had to foreclose on his home.  This is representative of a majority of Americans.  Many Americans are under financial duress, but because they believe the market will rebound or because they love their house so much they are not willing to lower the value of their home to be the market leader in their respective neighborhood.  As an owner you have to be able to bring money to the table if you want to sell your home in this economy or you may land up in foreclosure too.  If a person was certain the market would rebound or you were going to keep your job for ten more years then it may be worth fighting to stay in your home.  However, for most Americans it is to tuff to determine the next month. 

The idea MF Report is trying to convey is everyone is at the mercy of our current economic state.  If we live beyond our means and do not adjust our standard of living to our realty and current economic state then as individuals our lives may become an out-of-control rollercoaster which we are unable to regain control over.  Sometimes we may have to cut our losses to survive and be successful in the future.  Remember none of us have a crystal ball.

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Below is a summary of the conversation between Larry King and Ed and Pam McMahon.  Please note it is out of context and not word for word. Enjoy.

Larry King:  What happened?

Ed McMahon:  How much time do we have?  Hahahaha! A combination it is like a perfect storm.  Economy problems.  Selling a house right now is a tremendous operations.  We have had this house on the market for two years.  We must have shown it 50 organizations and/or people. Nobody has made an offer it is a lovely home I hate to leave it I want to keep the home I want this all to work out.

Larry King:  And the payments, what is the problem

Ed McMahon: You know if you spend more money then you make then you know what can happen.  A couple of divorces flown in a few things like that, things happen, you want everything to be perfect.  That combination of the economy I have a little injury I have a situation and it all came together.

 Larry King:  What, you broke you broke your neck.  You feel? What at home?

 Ed McMahon: I do not want to elaborate on that but I feel and broke my neck.

 Larry King:  Has that Stopped you from working?

 Ed McMahon:  Oh sure, you know you cant work with this around your neck and uuuhhhh I have to wear this.

 Larry King:  But Pam the assumption is the McMahons are multi-millionaires and multi-millionaires how much behind are you  $644,000 that is what is reported.  Can’t pay; if you are multi-millionaires shouldn’t you be able to pay $644,000.

 Pam McMahon:  Yeah, I would like to know where those multi-millions are.  Where are those multi-millions Ed?

 Ed McMahon: Hahahahahah.

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Comments

By Randy Nichols on August 28th, 2009 at 2:29 pm

I must say this is a great article i enjoyed reading it keep the good work :)

 

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