Guidant Financial Group Blog

Every day it becomes more and more apparent that no one is immune to the skyrocketing number of foreclosures sweeping the country. Johnny Carson’s sidekick, Ed McMahon, is now the latest victim felled by the tumultuous housing market (see Ed McMahon May Lose Beverly Hills Home).

Although Mr. McMahon is the most prominent celebrity to face foreclosure during the recent credit crisis, he is not alone. According to The Wall Street Journal, U.S. Rep. Laura Richardson, a California Democrat, recently lost a home in Sacramento to foreclosure.

For Guidant self-directed IRA clients investing (or thinking of investing) in foreclosures, this news reinforces the fact that not only poorly maintained homes in low-income neighborhoods are being placed on the auction block.

Some self-directed IRA holders choose to invest in properties faced with foreclosure by offering a lease option to struggling homeowners. While the investor does own the title of the home, this type of agreement gives the previous homeowners time to develop equity and strengthen their borrowing power.

For Ed McMahon, only time will tell. McMahon and his wife are currently talking with their lender to see if they can avoid foreclosure.