Saving Celebrity Homes from Foreclosure

Foreclosure isn't just for the mainstream population; celebrities are getting hit with mortgage problems, too.

In Miami Vice, Detective Sonny Crockett faced seemingly insurmountable obstacles, including a bout of amnesia that caused him to shoot his own partner. But these challenges were trivial compared to the real-life foreclosure problem of Don Johnson, who portrayed the policeman on TV, and owed more than $14 million to his lender.

The FHA may soon be saving homes in your neighborhood from foreclosure, but there's little it can do to help the likes of Johnson and other celebrities, including Ed McMahon.  The former Tonight Show sidekick recently made headlines for defaulting on a $4.8 million mortgage on his Beverly Hills home. Since both Johnson's and McMahon's mortgages were well in excess of the FHA's maximum loan limits, neither celebrity foreclosure qualifies for the refinancing program outlined in the Housing Stimulus Bill. Other high profile homes in jeopardy with big mortgage balances include Edith Wharton's estate in Lenox, MA, and the Mark Twain House and Museum in Hartford, CT. What's a famous person to do?

The Donald to the rescue

An unlikely source may give foreclosure assistance to Ed McMahon. Sometime along the way, he earned some recognition from real estate mogul Donald Trump. Upon hearing of McMahon's troubles, The Donald stepped in and offered to help. His plan is to buy the property and lease it back to McMahon. Last reports say the discussions are proceeding, but nothing has been inked just yet.

Rewriting history

Also in the news for the wrong reasons is the estate of American writer Edith Wharton. The fate of the property, known as The Mount, hangs in the hands of fundraisers and American literature buffs who are willing and able to donate money. The fundraising team needs to raise $3 million to secure a pledged donation for another $3 million; it will take the full $6 million to save the property. So far, the donation total is about $1 million, but the October deadline is fast approaching.

Another American writer's home is also stuck in a mortgage quagmire. The Mark Twain House and Museum has a $5 million debt balance weighing it down; ironically, the home itself only cost the former American humorist $40,000 to build. There's no clear way out for the museum at this point. Organizers say they could close the museum down in a matter of weeks.

No more white linen for Johnson

The only confirmed happy ending in the saga of celebrity foreclosures is in the Don Johnson story. The star was able to rewrite his foreclosure script at the last minute by wiring more than $14 million to the Pitkin County public trustee's office. Had he not sent in the money, more than three-quarters of his 17-acre property in Woody Creek would have been auctioned off. And not even Detective Sonny Crockett could have stopped those foreclosure wheels from turning.