Ed McMahon explains his mortgage crisis to Larry King

[Lauri]

(CNN) -- The nation's foreclosure crisis threatened a high-profile victim this week: TV legend Ed McMahon, best known as Johnny Carson's sidekick on "The Tonight Show."

The Wall Street Journal reported Tuesday that McMahon was $644,000 in arrears on a $4.8 million loan for a home in Beverly Hills, California, and his lender had filed a notice of default.

McMahon and his wife, Pam, appeared on CNN's "Larry King Live" on Thursday night to talk about their financial woes and other topics.

Some highlights:

Larry King: What did happen, Ed?

Ed McMahon: It's a combination, it's like a perfect storm. Economy problems. Selling the house right now is a tremendous operation .... We've had this house on the market for two years. We've shown it, I don't know how many, 50 organizations or people. Nobody has made an offer. I mean, it's just a lovely home. I hate to leave it. I want to keep the home. I want this all to work out. Video Watch McMahon tell King what went wrong »

King: And the payments, you can't make -- what's the problem?
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Ed McMahon: Well, if you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen. You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together.

King: Did you break your neck?

Ed McMahon: I broke my neck. I had a fall. ...

King: Has that stopped you from working?

Ed McMahon: Oh, sure. You know, you can't work with this [brace] around your neck. And I have to wear this.

King: But, Pam, the assumption is that the McMahons are multimillionaires and multimillionaires -- how much behind are you, $644,000, right? That's what's reported? ... If you're a millionaire, shouldn't you be able to pay $644,000?

Pam McMahon: I think over the years, you know, it's just a kind of a combination of maybe Ed working so hard and not kind of looking at proper management, which happens a lot. ... Because you're a celebrity, people think you have a lot more than you have. And you always want to take great care of all of your friends and your family and everybody, and you do. And you don't, and I think, you know, we didn't keep our eye on the ball. We made mistakes.

King: And are they foreclosing?

Pam McMahon: Yes, they are. ...

King: So you will lose this home?

Ed McMahon: It's possible, yes. But now, I'll tell you what's happened, oddly enough. Today, all kinds of wonderful things have happened. New things have happened. And new interest in this house. Where the house had no interest, now there's all kinds of, tons of interest. So who knows what's going to happen. I'm optimistic. ...
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King: Ed, why have you gone public?

Ed McMahon: Well, I figured I wanted to, in a sense, speak for the million people you mentioned [facing foreclosure]. I heard that figure today and I just couldn't believe it. Anyway, the million people that now have foreclosure signs on their house, or nearby. And I just want to give them hope, give them optimism, give them some kind of guidance. Get the best corrective people you need around you. Keep working on it. Don't stop. There's a lot of people that are hard workers, did everything right, didn't do anything wrong, and all of a sudden, they're in this boat. And I speak for all of them, as far as I'm concerned.

ya know, I feel for the guy - but at 85 years old he still has to work to pay his mortgage? that's kinda crazy, even by Hollywood standards. I'm surprised all those liberals in LA haven't stepped up to pay off the mortgage for him by now.

still, Mr McMahon's money problems have zero to do with the economy and vice versa.

[Lauri]

more info..

McMahon bought the six-bedroom, five-bathroom, 7,000-square-foot house in January 1990. The mansion, which is listed at $6.25 million, is in a gated hilltop section off Mulholland Drive called The Summit. Britney Spears is among his neighbors.

Asked why a millionaire couldn't make house payments, Pamela McMahon said the couple had less money than people may think and suggested they could have done a better job managing their finances.

"We didn't keep our eye on the ball. We made mistakes," she said. "It's embarrassing to say the least, and it's sad, because you know, Ed's worked his whole entire life."

McMahon, a former pitchman for the American Family Publishers' sweepstakes and former "Star Search" host, received a $7.2 million settlement after a toxic mold spread through his house and led to the death of their dog in 2001.

With legal fees and construction costs of fixing the mold problem, the money did not go far, McMahon said.

"We had nine lawyers, they had nine lawyers," McMahon said. "By the time that's all over, and you rebuild the house from the outside in. ... A lot of things went wrong."

Still, McMahon said he was hopeful. He said there has been renewed interest in the house this week.

"I'm optimistic," he said.

[Rebel Yell]

They said he has been trying to sell it, but couldn't due to his neighbor.  He lives next to Britney Spears. and potential buyers have to drive through the sea of paparrazzi camped out in the road 24 hrs a day.

[CBUSMS]

Well, if you spend more money than you make, you know what happens.

No kidding, Ed.

[Lauri]

They said he has been trying to sell it, but couldn't due to his neighbor.  He lives next to Britney Spears. and potential buyers have to drive through the sea of paparrazzi camped out in the road 24 hrs a day.

well, but what lead to the need to sell? looks like Mr McMahon was counting on working til he died - not a great plan when you owe millions of dollars on a property.

[Rebel Yell]

They said he has been trying to sell it, but couldn't due to his neighbor.  He lives next to Britney Spears. and potential buyers have to drive through the sea of paparrazzi camped out in the road 24 hrs a day.

well, but what lead to the need to sell? looks like Mr McMahon was counting on working til he died - not a great plan when you owe millions of dollars on a property.

I'm not making any excuse for him.  Just thought that was an interesting tidbit.  I live in the same economy he does, and my house is not being foreclosed on. 

[DixieBelle]

You'd think they would lower the price. Two years on the market? No word on what he paid in 1990 but I'm guessing this house is WAY overpriced. He's suffering from the same affliction the rest of home sellers have. Greed. Your house is only worth what someone will pay for it.

I feel for the guy being 85 and injured. But he's had opportunities of a lifetime: Decades and decades next to Johnny Carson, Star Search, Publisher's, etc...lots of people face worse (divorce, injury, etc..) on a lot less and do just fine.

Drop the price Ed. Who knows, maybe the paparrazzi will chip in and buy it

[Lauri]

They said he has been trying to sell it, but couldn't due to his neighbor.  He lives next to Britney Spears. and potential buyers have to drive through the sea of paparrazzi camped out in the road 24 hrs a day.

well, but what lead to the need to sell? looks like Mr McMahon was counting on working til he died - not a great plan when you owe millions of dollars on a property.

I'm not making any excuse for him.  Just thought that was an interesting tidbit.  I live in the same economy he does, and my house is not being foreclosed on. 

yeah, while the headlines scream that its 'more foreclosures than ever in history' ... they fail to relate how that 'history' is less than two decades old.

the 'history' of watching the buying and selling of houses across the country is roughly 17 years old. too bad we dont have those same numbers for the 70s when Jimmy was in the White House. I would assume the number would be far higher then, and in the actual Depression in the early 1900s.

ive been trying to school both my girls in this fact: saying that something has risen in price by 100% when the price was 50 cents to begin with is a headline grabbing thing.

reading that entire article about 'the most foreclosures in history' will tell you this near the bottom of the page: less than 7% of all owned homes are in danger of being foreclosed on... and many of them wont be lost. I highly doubt the Hollywood community is going to let McMahon be booted out of his house.. now that its nationally known, they should be embarassed to let a fellow 'actor' fall on such hard times.

[DixieBelle]

^exactly. The media seriously lacks perspective (as usual).