Sunday, July 5, 2009

Foreclosure a problem for celebrities too

You think that you're alone in your underwater mortgage? Several multimillionaire celebrities, such as the late Michael Jackson and Jose Canseco, have had trouble keeping their homes, and have either been forced to sell, refinance, or, in Canseco's case, walk away. While it can be assumed, perhaps correctly, that celebs simply got accustomed to their high-flying lifestyle and wanted to keep maintaining it even after it became apparent that they no longer could, their woes are simply a metaphor for the many other people who are having trouble making their mortgage payment or have already lost their homes. We all thought that home prices would keep going up, and that we would be able to either flip our houses for more than what we paid, or use them to draw equity so we could buy SUVs and flat-screen televisions. We were stupid and are now paying the price. People tend to say that these are "crazy times" in the real estate market, and the broader economy. But I tend to think that these are normal times (other than the government meddling in the housing market) and that the "crazy times" occurred in the post 9/11 period to 2007, when this housing bubble finally burst.

I find a silver lining in this, shall I say, economic readjustment. No one needs 17 rooms, 3 or more bathrooms, a television in every room, 5 all-new vehicles in the driveway or in front of the house...and I'm just talking about the middle-class, everyday people. Living simply and within your means is the key to happiness.

BTW, Lenny Dykstra is mentioned in this article. If you have HBO, you should really try to catch this month's edition of Real Sports. It has a feature on Dykstra and his recent history; not too long ago, he was considered a financial genius, and accumulated a fortune in the amount of (if I remember correctly) $50 million. After a series of bad investments (notably a magazine for pro athletes, The Player's Club), Dykstra is now facing foreclosure on his mansion, which he purchased off Wayne Gretzky. If you don't have HBO, this is a really good article that sums up his saga in great detail.

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