Ed McMahon's Home for Sale ... Again

Aug. 29, 2008— -- Ed McMahon's house is back on the market.

The former "Tonight Show" sidekick shocked many Americans earlier this summer with news that he was on the brink of foreclosure. But things seemed to take a rosy turn for the 85-year-old McMahon after at least two people offered to buy the six-bedroom Beverly Hills mansion.

One of the prospective buyers was real estate mogul Donald Trump, who said he would lease the home back to McMahon.

An unidentified buyer outbid Trump and was set to buy the house until Thursday night, when he "did not perform on a specific point of the contract," McMahon's realtor, Alex Davis, told ABCNews.com today.

Davis said he was confident that there would be another buyer for McMahon's home, but a friend of McMahon's says that the former announcer was disappointed that the deal fell through. McMahon's publicist did not immediately provide comment on the issue.

The failure of one deal might mean the success of another: Michael D. Cohen, executive vice president and special counsel to Donald Trump at the Trump Organization, said that the real estate magnate's offer is still on the table.

"We're speaking with Mr. McMahon's broker as well as [McMahon's mortgage lender] Countrywide," Cohen said.

McMahon isn't the only well-known name struggling with housing woes. As falling house values and troubled mortgages continue to cripple the U.S. housing market, foreclosures seem to be bearing down on the rich and famous like never before.

"There have always been celebrity foreclosures, although I don't recall a time as we've seen as many happen in such a short period of time," said Rick Sharga, the vice president of marketing for the foreclosure listing service RealtyTrac.

Besides McMahon, other celebrities have made headlines this year for facing or escaping foreclosure.

Pop icon Michael Jackson and boxing great Evander Holyfield reportedly managed to avoid foreclosure, but former slugger Jose Conseco and basketball bad boy Latrell Sprewell did not.

Sharga said the spate of celebrity foreclosure news shows that "foreclosure is a situation that cuts across all socioeconomic areas."

He said, "Just because you make a lot of money doesn't make you immune."

Foreclosures often occur when people spend more than they earn, Sharga said, and that's not a phenomenon limited to middle- and low-income Americans.

"It's always surprising for those of us who are sort of in a nine-to-five working world to realize that even people who make millions of dollars are still living paycheck to paycheck, even if there are more zeroes on their paycheck," Sharga said.

Doug Ames, Conseco's former agent, told ABCNews.com that it's not unusual for athletes to maintain old spending habits even when they see their incomes drop, like Conseco's did after he left professional baseball.

"When you spend like a millionaire when you're making nothing, you'll end up like him -- going broke, losing everything," Ames said.

'The Perfect Storm'

Conseco lost his Encino, Calif., mansion earlier this year after failing to pay back $2.5 million that he owed on the home.

The former slugger, who did not return calls from ABC News earlier this summer, told the syndicated television program "Inside Edition" that "it didn't make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else."

He also expressed sympathy for others facing foreclosure.

"I decided to just let it go, but in most cases and most families, they have nowhere else to go," he said.

Conseco wasn't the only star to refer to the country's wider housing crisis when discussing his own troubles.

After news of his housing straits became public, McMahon said on CNN's "Larry King Live" that "economy problems" had kept him from successfully selling his Beverly Hills mansion.

"It's like a perfect storm. ... Selling the house right now is a tremendous operation," he said.

Howard Bragman, a spokesman for McMahon, suggested that by speaking publicly about his problems, McMahon may be doing a service to others facing foreclosure.

"It's important for the respect of the millions of Americans who are also going through foreclosure that somebody stands up and says, 'I'm not going to hide, I'm not going to lie,'" he said recently.

Sharga said that McMahon, in particular, may be an especially sympathetic public figure because of his recent struggles. McMahon has said that he stopped working after breaking his neck a year and a half ago.

"I don't know a lot of people who felt terribly sad about Michael Jackson possibly losing Neverland Ranch or Jose Conseco having lost a home to foreclosure," Sharga said. "I guess most people can't relate to a themed-amusement park home but can certainly relate to somebody buying a house and suddenly not being able to afford it because of physical problems."

Society in Denial

At least one nonprofit group is hoping that McMahon's notoriety will help bolster its own causes.

Almost immediately after news of McMahon's possible foreclosure broke, Wider Opportunities for Women, an economic advocacy group for women and families, released a statement comparing McMahon's housing woes to the financial hardships faced by older Americans.

"Whether we like it or not, it seems like the American public primarily responds to crises that can affect all of us when they affect highly visible people like Ed McMahon," Joan Kuriansky, the group's executive director, told ABCNews.com.

The group's decision to highlight McMahon's situation, Kuriansky said, was "not a reflection of our sympathy for him but rather a reflection of the almost double standard that we have in this country where we can pay attention to someone like Ed McMahon and his plight, which is obviously much different from that of the majority of Americans who are struggling to get by."

But whether or not the experiences of McMahon and others will serve as effective cautionary tales remains to be seen.

Los Angeles psychologist Lilli Friedland said that many people don't want to believe news of celebrities facing foreclosure.

"The primary reason people look up to celebrities is because they look at them as heroes or as aspirational ideals -- these incredible people who have perfect bodies, who are perfect athletes, who really knew how to make it," she said.

In some people's eyes, recognizing that someone as rich and accomplished as a celebrity could face financial troubles "would really say something traumatic about our society and our economic status," Friedland said.

A person might wonder, "If they can make bad deals, then there's no hope for me as the normal person," she said.

Happily Ever After?

Some celebrities have managed to avoid foreclosure in unconventional ways.

In Jackson's case, it was an investment company that came to the rescue. Colony Capital bought the loan on Jackson's storied Neverland Ranch in May, allowing the pop star to avoid foreclosure.

How Holyfield avoided foreclosure was more mysterious. A foreclosure notice for the boxer's Georgia home appeared in a local paper in early June. Two days later, a lawyer representing Holyfield's lender told the The Atlanta Journal-Constitution the property was no longer up for auction but wouldn't say why.

While Jackson and Holyfield didn't talk much about their real estate woes, McMahon's public discussion -- and resulting publicity -- for his problems seem to have helped his prospects for selling his home.

Bragman and Davis, McMahon's realtor, said that more people started inquiring about the home after McMahon went public.