Celebrity foreclosure: Jose Canseco loses Encino home

You can't make this stuff up: Former major league baseball player Jose Canseco,  pictured, "said on Thursday he had lost his California mansion to foreclosure -- one of the first celebrities to publicly admit being a statistic in the U.S. housing crisis," the Associated Press said.

In comments to the TV show "Inside Edition," Canseco says, "It didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else."

More from the Associated Press: "Canseco, 43, one of the most flamboyant U.S. baseball players until his retirement from the major leagues in 2001, told the celebrity TV show 'Inside Edition' that it did not make financial sense to keep his 7,300-square-foot home in the Los Angeles suburb of Encino. 'Inside Edition' said it had foreclosure documents showing Canseco owed a bank more than $2.5 million on the house.

Sports headline: Jose walks.

More to come on this item. But don't hold back on your thoughts and comments. Something tells me this item is a setup in search of a punch line. Go for it.
Photo Credit: Getty Images
Hat Tip: Seattle Snoop

Comments

[jag]

Pete,

Love this story. For all those folks that continue to brag about the high end market not being affected by the mortgage crisis what do you have to say about this.

[Cal]

CondoBlue Conseco.

Walking away makes sense for a lot of people, whether they figure that out or not is a different story entirely.

[John]

Please note that Encino is not the Westside, and this foreclosure does not suggest that prices on the Westside will be anything but stable in the coming months.

Right.

[puckhead]

"Love this story. For all those folks that continue to brag about the high end market not being affected by the mortgage crisis what do you have to say about this."

Jag,

You have got to be kidding. Oh this is a beaut, posters are now claiming that Jose Conseco is representative of the high end housing market. Jose Conseco, the admitted steroid abuser who was black balled my major league baseball and who has to rely on tell all steroid books as his only source of income. Something tells me that Jose Conseco took one too many fastballs off his head and is in desperate need of money. It makes perfect sense for Jose Conseco to walk away from his house, he reputation is in the toilet and he has no job prospects. Now compare that to someone who is the working wealthy. If you own a business or is an entrepreneur, you need constant access to money. You think banks and investors are going to want to do business with you if you default on your home? Let’s say you are an executive with a large firm or company, you don’t think your bosses will look unkindly on you defaulting on your home and that it’ll adversely affect your career? Please, if you have nothing it’s easy to walk away from your home. If you have a decent career on own a business, it can be career suicide. My boss depends on my judgement with his clients to make him money. If my judgement comes into question, I’m no longer employable to my boss.

[Paulette]

Oh Wah Wah Wah.
No sympathy from me.

[SoCalRealEstateNews.com]

Foreclosures are the inevitable result of no-down, no-qualifying, no-verification, low teaser rate loans being made for at least two after the market logically should have peaked.

The good news is this provides a great opportunity for renters to start paying down debt and saving for that down payment that's once again required for most non-veterans.

And that federal "economic stimulus" payment might be a great place to start.

[JohnnyB]

Anabolic Angelinos deflate too... just a matter of time.

[Milla]

perfect sports headline, pete.

[MyLessThanPrimeBeef]

In a Roman orgy, and no mistake abou it, it has been one disgusting, wanton, gluttonous binge, rich folk take off their pants just like the the plebeians.

[Laker]

I found that Jose Canseco, sold (his) other house back in 2005 for$1,650,000 after buying it in 2003 for $1,200,000.
So he made nice clean $450,000.
Then i guess he bought another house for more with not down or something, and after two years walked away.
Though i'm not that sure, the sale of this house is not that clear:
It might be that the deed was transfered but he still owned the mortgage on it with different name...and that $2,990,000 foreclosed....

Aug 30, 1990 $575,000
May 02, 1997 $920,000
Mar 19, 2003 $1,200,000
May 18, 2005 $1,650,000
Jun 23, 2006 $2,272,000
Feb 16, 2007 $2,990,000

[toby]

What do they call Encino? The Beverly Hills of the Valley?

Just keep on chanting "Foreign Investors, Rich people and the Market has bottom...Oh my" over and over again...

And maybe it just might come true.

[Patrick]

Steroids and stardom aside, Canseco is not unlike the rest of America: Chronically overspending, knee-deep in debt, lived beyond ample means, relative to the rest of the world. The mortgage mess is a symptom of this very same mindset. There will be more.

[GDC]

7300 sq ft in Encino? And he owed $2.5 million? This news should be forced fed to the sellers in Encino. I see tons of listings there in the $2-$3 mil range for 5000 sq ft places. Most sellers still do not have a clue.

[Rob]

DUDE ! Wheres my car?

Oops, wrong movie....

Excellent !!!

[Westsider]

Whatever; Encino is not Santa Monica, and this house was not north of Montana.

[R Tray]

JAG,
Uh, foreclosures have largely not affected the higher end market (defined as starting at between 2.5M and 3M) anywhere near as greatly as they have the lowest tier of buyer (defined as below 500k). It is sad that the vast majority of those affected are those that can least afford it.
But to look at this idiot as an indicator is, well, idiotic.

[Cal]

OT: Checking my local zips on Melissa Data I see we have the first positive YoY increase in sale in quite a long time. Contributable to 2 things, prices are 150k average less and the YoY comparison is much easier in April due to last Marchs subprime blowup which affected the April closings.

For most areas of LA I expect them to be positive YoY by August/September in terms of sales and negative of course in terms of prices.

http://www.melissadata.com/lists/ezlists/
ezhomeowners.aspx

[manraygun]

This could be a good indicator. Given the moronic, celebrity-obsessed culture we live in, having famous people saying it's okay to walk away from housing debt can only mean one thing. Jingle mail... It not just for losers any more.

[Mike S]

I guess rich people really don't get old either. Those who don't study history... proclaim their property is insulated from market forces.

It doesn't matter whether Mr. Roids was 'new' rich, 'old' rich or 'illicit' rich--his property tanked in value. It is the new neighborhood comp.

Historically the 'sort-of' rich got clobbered in real estate downturns relative to us 'poor' people. It just takes a bit longer before us 'poor' renters' buy their places for 40 cents on the dollar. What will they say when:

a) interest rates skyrocket after the election;
b) their Alt-ARMs reset; and,
c) No one trade's up because the less-expensive market sectors got clobbered in 2008.

No amount of plastic surgery or apple martinis will make their facades (pretense?) pretty. I'm figured 60% peak to trough decline for this snotty bunch since that's what occurred here in the early 90's and Texas in the early 80's. YeeHaaw!!!

Mike S.

[Grabybaby5]

He CHOSE to walk away 'cause it no longer made "financial sense". It's not that he CAN'T pay the mortgage, he just chooses NOT to pay the mortgage! You KNOW he's hiding everything in a corporation! It's not like he has nowhere to live.

[Phil Apino]

Unless you give us amnesty, you will have more and more foreclosures! Deportations hurt economy.

What do we want? AMNESTY!!

When do we want it? NOW!

[sallylacovitzer]

The greed in the L.A. housing market was all planned. Feeding frenzies were created to get suckers in the door.
GREED, GREED and more GREED.
Now people are arguing that their Santa Monica rathole is worth more than the Encino rathole.
You let it happen...you deserve what happened. Sorry...Greed is NOT good!

[sallylacovitzer]

The greed in the L.A. housing market was all planned. Feeding frenzies were created to get suckers in the door.
GREED, GREED and more GREED.
Now people are arguing that their Santa Monica rathole is worth more than the Encino rathole.
You let it happen...you deserve what happened. Sorry...Greed is NOT good!

[Mitchell B.]

Everyone's quick to pile on Conseco, but most all of the commentors have already decided that there is no problem in "walking away" from the "Promise to Pay". We all made a promise ( promissory note) when we financed the home, whatever happened to a man being as good as his word? A generation ago, I can't imagine a man bragging that he was " smart enough " to walk away from his promise.

[Mike]

Hah! A single schmuck buys a 7,300 SF mansion, decides he doesn;t want to pay, and it is indicative of the market crunch? Anyone that buys that BS has to have an IQ the size of a peanut.

THis ia loser that had milions, mis-managed it, and is now entirely reliant upon writing tell-all books for income. Folks, this guy has the brainwaves of a rock. I am sure writing his name is a stretch. And he buys a 7,300 SF mansion? In teh Valley? I guess he will be renting for the rest of his life, as no financier will back this loser. Hah!

[Greg]

Selling real estate in Beverly Hills I can tell you with utmost certainty that Canseco's home does not constitute the hi-end. Anyone in the biz will tell you hi-end starts at about 5 million and in the best parts of LA and the westside sales in some neighborhoods are outperforming last year. Above 10 million and the stats are even better.

This is just an example of a celebrity lousy at managing his money like countless others.

[jb]

Mitchell
- A generation ago, I dont think bankers were stupid enough to give 0% down, they made you have some skin in the game. The promissory note is NOT a promise to pay the loan, it is an agreement to pay the loan or allow the bank to take the house.

The bankers have all the ability to control this but instead had to make that profit on the mortgage fees at any cost to get the huge annual bonus. I hope they all go down - everybody walk.

[el guapo]

So the "high end" is $5M-$10 now? Why stop there? Why not make it $50M? I'm sure the ultra high end is holding up well. 99.9% of Los Angeles or anywhere else doesn't care if a $5M house is holding up. It's irrelevant to everyone but famous entertainers, ball players and CEO's of Fortune 100 companies. I'm sorry about giving you a hard time. Don't get me wrong, if you are making commission on $10M homes, more power to you. It's just that you're overshooting a bit, IMO.

Anyway, the relevant point is that it made more sense to walk away from a $2.5M home rather than try to sell it. You don't have to like the guy, but he made a business decision. If you are a social pariah, what's a ding on the credit score?

Peter, you may want to poll this question: How much is a ding on your credit report worth to you? $10K, $50K, $100K, etc.? Or put another way, how "under water" do you have to be to walk away? Might be interesting to see a dollar value attached.

[Mike S]

Greg I wholly agree with you. It is the 'apparently' rich who fall under that threshold that will receive their comeuppance.

The truly rich I've known care little about appearances. They enjoy what they enjoy and understand true wealth is living without such worries.

Mike S.

[Nancy]

There are foreclosures in Beverly Hills. I live in Beverly Hills. There are four foreclosures on my block. These people didn't buy them with low down payments. They generally took out a second or equity line when their equity positions got big. The economy tanked, business slowed, their mortgage payments got bigger, equity went to zero...and they lost their home in foreclosure or they sold it right before a trustee sale at a huge loss. Better to sell now that stay in a house upside down with huge payments when the home value will just keep going down. Take whatever money you can get out of the home sale and invest in recession proof investments like oil, gold... I'm a real estate appraiser and sales agent.

[denriddy]

What inning is this? In any case, Canseco took a walk, but was called out at home.

[Jeff]

Banks used to loan money differently and Americans thought of their homes differently.That's why someone like Conseco will walk away from his responsibility. Homes used to be somewhere you thought you were going to stay. And payoff the mortgage. Houses are now just commodities to traded up and counted on to appreciate in value. And borrowed against.
I'm not at all surprised that Conseco walked away; he probably had an advisor tell him was a good idea.
If you have any amount of money or assets (like Conseco) your FICO score counts less as someone will still loan you money if you need it.

[Ziggy]

Hey Jose,

Sorry you s*** at managing more income than most of us will ever DREAM of.

Ain't reality a B***h??????

[mark g]

New words for an old standard:

Jose can you flee by the dawn's early light?
What so proudly we failed at the twilight's last refi?
Whose broad stripes and bright stars through the equity fight,
O'er the ramparcels we appraised were so gallantly inflated?
Angelo Mozillo's orange glare, subprime bursting in air,
Gave proof through the night that our Fed was not there.
Oh, say does that price discovery banner yet wave
O'er the land of jingle keys and the home of the walk away?

Applause... go team!

[Ryan]

Los Angeles apartment guru Mark Verge of WestsideRentals.com got quoted today on a foreclosure piece in the Wall Street Journal, "The Accidental Renters."

Crazy how this affects everyone, apparently the rental market especially!

[max]

Some comments here suggesting the high end is not being hit. Not so - I notice a $53m gigantic home in Holmby Hills reduced 25% to $40m last week, and it's been on the market for about 17 months now. And in Venice, a $13m property in Oakwood has dropped to $9m.

It's happening folks....

[me]

The mortgage company should sue his worthless ass. He borrowed the money; he damn well better pay it back.

[paul]

hi jose I am your friend wonderfull person I hate to see you like this position you had it all I think you made wrong dicision on the past about over spending $$$
good luck mr.jose see you soon