We’ve all been affected by the global economic downturn. Our problems pale in comparison to some celebrities who, despite huge salaries, still manage to resort to bankruptcies and mortgage forclosures. The entertainment industry today seems full of ‘one hit wonders’ an actor or singer that is part of a popular and recognized award-winning performance but whose career never materializes.

What better place to look for financial difficulties than Los Angeles where millions of dollars are treated like pocket change; A list stars can make $30 million dollars for one picture Superior performances by wanna-be's, or disappointing performances by recognized stars could sound the death knell for promising careers. Here are some recent mortgage forclosures:

MEL GIBSON
Mel Gibson isn’t exactly having a good year in 2010. On top of all the legal problems between him and Oksana Grigorieva, Gibson is now facing a double lawsuit. According to TMZ, a company named Ramage Construction has filed two lawsuits against Gibson, claiming he owes money on three residential properties they built for him. The amount they’re asking is $12,000. In the papers, Ramage asks permission to foreclose on the three properties to settle the debt. In addition, Ramage is suing the A.P. Reilly Foundation, which owns Gibson’s “church” in Malibu, claiming they owe the company $200,000. That suit asks the same—payment or foreclosure. Between these lawsuits and the settlement Gibson will inevitably have to hand over to Grigorieva, he’d better start lining up some movies, or he’s going to be cleaned out!
ED MCMAHON
Ed McMahon, who for decades appeared as Johnny Carson’s sidekick on “The Tonight Show,” fought to avoid foreclosure on his multimillion-dollar Beverly Hills home, according to published reports. The former “Star Search” host was $644,000 behind on payments on $4.8 million in mortgage loans when a unit of Countrywide Financial Corp. filed a default notice Feb. 28, 2008 with the Los Angeles County Recorder’s Office.
***Mega-developer and TV personality Donald Trump has agreed to buy Ed McMahon's Beverly Hills house for an undisclosed amount and allow McMahon to continue living in it. Details of the deal are still being ironed out.
"I don't know the man, but I grew up watching him on TV," Trump said in an exclusive interview with The Times.
McMahon, 85, was facing foreclosure within two weeks on his Beverly Hills home of 18 years. The aging television icon, who was Johnny Carson's sidekick for three decades, defaulted on $4.8 million in mortgage loans with Countrywide Financial Corp. He said in interviews that he was unable to work because of a neck injury that occurred about 18 months ago.
Trump said he stepped in because helping McMahon "would be an honor." His plan is to buy the home from the lender and lease it back to McMahon.

EVANDER HOLYFIELD
The Atlanta Journal-Constitution reports that the mother of Evander Holyfield’s 10-year-old son says he has missed two child-support payments. Holyfield’s reps told her not to expect the payments. Holyfield, who has 11 children total, is apparently in financial distress. His mansion in Fayette County, Georgia is under foreclosure. The home, which is worth $10 million, was auctioned by Washington Mutual Bank on July 1, 2008. Holyfield has also been sued by a consulting company for not paying back a $550,000 loan. This may explain why 45-year-old Holyfield has been trying to get back into the boxing ring for another heavyweight championship. Holyfield made significant money over the course of the years but like too many other sports figures seems to have wound up not holding on to much of it.

WYCLEF JEAN
Former Fugees member Wyclef Jean has failed to pay the mortgage on his unfinished Miami Beach mansion, resulting in the loss of his home. Jean took out a $2 million mortgage from Home Equity Mortgage Corp. in 2004 to purchase the estate through a corporation he owns with several friends, reports The Palm Beach Post. Although the rapper/producer set out to renovate the canal-front property, the foreclosed home, which was appraised at $1.4 million, was left unfinished for more than two years as a series of construction liens were filed. In addition, the property garnered $6,200 in fines from the city of Miami Beach once the $900,000 construction project halted after Jean and his partners couldn’t come up with the $177,913 in construction costs needed to finish the effort. Court documents note that a lien was put on the property this year by the project’s architects, who have tried to collect $75,000 owed to them since 2004. After all of that, Jean’s corporation now owes the bank $2.4 million
MICHAEL JACKSON
Jackson had an almost $25 million loan out on the house. In 2007, he was $23 million delinquent on the loan and foreclosure proceedings began. In California, after you miss three mortgage payments in a row you have 90 days to make a payment. Jackson, who hadn’t released an album since 2001, was unable to make a payment. For most people, this would have been the end of the line. For most people facing imminent foreclosure, filing bankruptcy is the best option for protecting their home. Jackson’s celebrity helped stop foreclosure. His debt was transferred to another loan company, and the property stayed with him.


NICHOLAS CAGE
That’s right, even Actor Nicolas Cage! The house he purchased in 1998 from singer Tom Jones was repossessed in 2010. Originally bought for $6.5 million, the property – 363 Copa De Oro Road, Los Angeles, Calif. – was listed for sale in 2006 for a whopping $35 million. It was finally sold in November by Citibank, after a failed attempt to sell in an April auction, for $10.5 million.

My reaction to this sorry state of affairs is to wonder why on earth do real estate brokers sell to buyers with questionable ability to maintain their current earning capabilities? The quick and easy answer is the 7 percent commission the office gets. On a $5 million dollar home that amounts to $350,000. Why do lenders take such chances with potential defaults? They are left holding the bag and face recouping a portion of their original investment should the property end up at auction.

It does seem to be that if you are famous you can borrow and borrow but if you are the little man in the street the banks won't take a risk with you.