Mortgage turmoil snares Ed McMahon

http://www.latimes.com/business/la-fi-mcmahon4-2008jun04,0,7909098.story

Mortgage turmoil snares Ed McMahon
Johnny Carson's sidekick has defaulted on millions in home loans.
By Peter Y. Hong
Los Angeles Times Staff Writer
June 4, 2008

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.

"He's not alone. There are plenty of people affected by the weak economy, bad housing market or bad health," McMahon's spokesman, Howard Bragman, said late Tuesday.

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

"The ideal situation would be that he would be healthy and able to earn a living to pay for his house," Bragman said.

The six-bedroom, five-bath home on Crest Court is listed for sale at $6.25 million, said real estate agent Alex Davis of Alex Davis Estates, who has the listing. It's been on the market for two years, he said.

It would seem to be an ideal home. The Hilton & Hyland luxury real estate website described the home as a celebrity Mediterranean estate in the prestigious Beverly Hills gated community of The Summit, which overlooks Coldwater Canyon and Mulholland Drive.
"This once-in-a-lifetime offering is full of charm and character. The foreign imported doors and meticulously chosen fireplaces are unlike any other," the website boasts. It also has a master suite with his-and-hers baths and closets overlooking the yard and a sweeping canyon.

But Davis said The Summit has been a difficult area to sell.

"In the midst of trying to sell this property, there were a lot of distractions," Davis said, citing paparazzi who have converged around the nearby home of Britney Spears.

"When we were trying to sell the house one time, there were about 100 paparazzi there," he said.

Another difficulty for the area has been a mold contamination that has plagued a number of homes, including McMahon's and one purchased for the director of the Getty Museum.

McMahon won a $7.2-million insurance settlement after claiming that mold in his house killed his dog Muffin and sickened him and his wife.

According to a lawsuit he filed, the trouble began when a pipe broke and water flooded a den. Mold was later discovered throughout the house. McMahon and his wife, Pamela, blamed faulty cleanup.

"When your family loses its health and your home is a wasteland, that's a colossal disaster," McMahon said at the time.

Both the Hyland website and ChristiesGreatestEstates.com list the property, built in 1989, at $5.75 million. Davis said it was still priced at $6.25 million.

McMahon took out two loans on the property totaling $4.5 million and later borrowed an additional $300,000 against the house, according to ForeclosureRadar. The loans were obtained through Countrywide Home Loans Inc.

A Countrywide spokesman declined to comment, citing privacy concerns.

The Wall Street Journal first reported the story. Though McMahon was in negotiations with Countrywide, the paper said it wasn't clear whether McMahon and his wife would be able to remain in the home.

McMahon was about $644,000 in arrears on the loan when the notice of default was filed, the paper said.

Federal regulators have been urging lenders to ease loan terms, but it wasn't clear if that would happen in McMahon's case.

peter.hong@latimes.com

Times staff writer E. Scott Reckard contributed to this report.