The real Ponzis and posers of Irvine

The Real Housewives of Orange County who lives in Irvine recently received a NOD. Apparently, she underwent plastic surgery while not paying her mortgage.

Irvine Home Address … 79 OXFORD #49 Irvine, CA 92612

Resale Home Price …… $250,000

Money changes everything

Money, money changes everything

We think we know what we're doin'

That don't mean a thing

It's all in the past now

Money changes everything

Cyndi Lauper — Money Changes Everything

I saw a recent headline on another Nicolas Cage foreclosure, and it inspired me to do a little research into our local celebrities to see who is posing and who is for real. I didn't find anyone who was for real.

Graphrix, formerly of the IHB, discussed the Real Housewives of OC in A Real Housedebtor of OC.

Having grown up and lived most of my life in OC I have come to the conclusion that the people here who seem to have money can be broken down to three types of people. The first is the person who actually has money and accumulated wealth. They may be a business owner or they may have a decent paying job. They may not have the most glamorous job but they live within their means and have saved and invested well. They don't really ever mention money or talk much about material items. They also are the most humble and happiest people I meet. The second is the person with a very well paying job but they live paycheck to paycheck. They always have a newer car, nice high end clothes and the latest gadgets like a plasma TV. They are the one who will have the IPhone before everyone else. I know too many people who lived like this in the RE industry. The third is the person who lives beyond their means. These are the people who you would never know that they are dead broke but appear rich and are best exemplified by Irvinerenter's post on Cultural Pathology. The third is in the worst situation today if they own a home because they no longer have the appreciation to bail them out. They are the type that always talk about money and material things. They think this will make people like them and they believe that really one day they will be rich. The only problem is they never seem to catch up or the reality is no matter how much they believe in reality it never happens.

In the post The Grand Illusion, I discussed the pursuit of status posers engage in this way:

Status is an internal perception about what people believe other people think about them. It has nothing to do with what other people actually do think about them (as if that mattered anyway).

For instance, I think the women on the The Real Housewives of Orange County are soulless gold-diggers. My derision is only eclipsed by my disrespect for the way they live, what they believe, and what they represent. However, they think I, and everyone else who knows them through the show, believes they are something special, something to envy as if they really have it “going on.” They have status. Not because people regard them highly, but because they think people do. But I digress…

For people who don't have the internal strength to base their self worth on what they believe about themselves, they end up basing their self worth on their perceptions of what other people think about them. Once they have given their power away to others in this manner, people will expend tremendous amounts of time, energy and money in a vain attempt to influence other people — hence we have fancy cars, opulent houses, designer clothing, and all the other trappings of conspicuous consumption. In my opinion, this is a sickness (their mind control fails on me.) It is a consuming disease which fed on the borrowed money made available during the housing/credit bubble.

Most watch The Real Housewives of Orange County and feel superior — how could you not — but some actually watch looking for role models or a how-to manual for being pretentious — a ghastly side effect our sons and daughters pay with their souls.

Newest ‘Housewife’ defaults on Irvine home loan

February 8th, 2011, 12:15 pm — posted by Marilyn Kalfus, real estate reporter

Peggy Tanous, who will make her debut on the Real Housewives of Orange County when the new season airs on March 6, has something in common with a few of the other housewives, in addition to her looks: Real estate woes.

Tanous has received a notice of default on her Irvine house, public records show.

The house, below, was purchased in 2006 for $1,379,000 from Lennar Homes of California. The default notice is dated Nov. 16, 2010. Records show the amount in default at $190,713. The loan was for $1 million.

She purchased this home on 2/17/2006 for $1,379,000 using a $965,300 first mortgage, a $344,750 HELOC and a $69,250 of her wealth in a down payment. It's possible she put over $400,000 down if she didn't use the HELOC, but evidence is to the contrary.

On 10/24/2006 she refinanced with a $1,000,000 Option ARM with a 1.5% teaser rate, and she obtained a stand-alone second for $312,540. If she didn't use the HELOC at the purchase, she pulled the money at this refinance. It seems pretty obvious she couldn't afford the house.

To be in default for $190,713, she hasn't been making any payments for quite a while. Loan servicing usually adds 1.5% to the loan balance each month for missed payments, fees, and so on. On a $1,000,000 loan, that comes to about $15,000 per month. To be $190,715 in arrears, the mortgage payment must have been missed for at least 12 months, and probably longer.

Since she began the show last season, she has undergone some cosmetic surgery. A surgery that took place while she wasn't paying her mortgage.

“Orange County women are very big on up-keep. Some people go in for boob jobs has much has they go in for oil changes.” – Peggy Tanous commenting on her third boob job. “The Real Housewives of Orange County” Episode Five.

Back when she was contemplating the boob job, did her and her husband look at their income and their obligations and decide it was better to have big tits than pay a mortgage? Lenders must love that kind of decision making. Entitlements trump financial obligations every time.

She is a delinquent mortgage squatter behaving like a woman of wealth and means. Some option ARM lender or MBS investor figured enabling this lifestyle was a good idea. They deserve the losses they will endure. Unfortunately, our tax dollars may bail everyone out.

Tanous could not be reached for comment, but we’re seeing if someone from Bravo TV might want to give us an update.

The 41-year-old former bikini model and stay-at-home mom is “an odd mix between a holistic, new age woman and a wealthy Orange County party girl,” according to a Bravo news release.

Wealthy? She didn't have any wealth when she bought this house at the peak, and she is currently so far underwater that any real estate “wealth” she once had is long gone. The ability to look wealthy with enormous amounts of debt doesn't make her wealthy, it makes her a poser.

She is married to an entrepreneur who has fallen on hard times. I can appreciate the ups and downs of entrepreneurship. My own burn rate is too high, but then again, I didn't go borrow $1.3M with an Option ARM either. Perhaps an entrepreneur shouldn't take on enormous debt service payments. Unless the house is going to pay for it all….

As our TV bloggers have reported,Peggy is married to Micah Tanous, an Internet marketing entrepreneur. The couple are friends with Jim and Alexis Bellino, current cast members of the show.

The Bellinos are facing foreclosure on their 6,400-square foot Newport Beach house, which is on the market as a short sale for $3,395,000.

Several ’Real Housewives of Orange County‘ have had real estate headaches:

Lynne Curtin:

Jeana Keough:

Tamra Barney:

Perhaps I should do a follow up on the Ponzi activities of the posers above? Do you think their mortgage history would be interesting?

And in other celebrity news, the losses keep mounting for Nicolas Cage.

Nicolas Cage sells Middletown mansion for $6.2 million to Massachusetts couple

By Chris Barrett

PBN Staff Writer

Twitter: @CBarrettRI

MIDDLETOWN – Actor Nicolas Cage has finally sold his Middletown mansion. The 27-acre estate sold for $6.2 million on Friday, according to town records and Lila Delman Real Estate.

The Hollywood actor has been trying to sell the so-called Gray Craig Manor House since 2008, shortly after he ran into personal financial problems. Land records say Pamela and Andrew Constantine of Forestdale, Mass., purchased the property.

Cage’s Hancock Park Real Estate Trust had most recently listed the property for $7.75 million. The trust had purchased the property for $15.7 million in July 2007.

“This is a significant sale in the context of the realities of today’s market,” Lila Delman President Melanie Delman said. “Rhode Island is positively impacted in that, as a previously somewhat undiscovered treasure, our high-end properties present as a significant value relative to other Northeast destinations.”

In a news release, the real estate company said that the Constantines planned to rent the coastal property “while not enjoying the property themselves.” The release added that the two planned to continue work to preserve the home.

The brick and stone mansion built in 1924 offers sweeping views of Nelson Pond and the Atlantic Ocean. The listing boasted that the home includes a “library with a soaring barrel-vaulted ceiling, a formal living room with sweeping water views, a spacious dining room, a vintage conservatory, a handsome billiard room, and a gourmet kitchen with stone fireplace, custom hickory ceilings and antique terra cotta floor tiles.”

At least Nicolas Cage wasn't a poser. He was a fool, but he could back up his debts with $20,000,000 a movie earnings. He will earn his way out of this disaster. It still has to suck to be him right now.

Actor Nicholas Cage was so heavily intoxicated at the time of his arrest this weekend that he didn’t know where he lived, Radar reports.

Cage was arrested in New Orleans Saturday morning, where he is currently filming the movie “Medallion.”

Onlookers complained that Cage was “very drunk” and arguing loudly with his wife Alice Kim on the street about a home he mistakenly believed was his own. According to a statement released to Radar by the NOPD, Kim tried to correct him, at which time Cage allegedly pulled Kim by the arm to the home he believed was their rental.

Apparently, he is not adjusting well to being a renter.

Sold to the bank at the peak

The owner of today's featured property demonstrates there are two ways to profit from a transaction at the peak. The best way is to sell and rent. This property would have fetched $315,000 at the peak. However, since most people don't sell and chose to rent, the other way to sell at the peak becomes much more common — people sell the house to the bank by cashing out all their equity.

The drawback of this approach is that it ruins the credit of the borrower, but the windfall is so large, that many borrowers benefit more than it costs them. The owner of today's featured property borrowed $315,000 on 10/30/2006. That is more than three times their original $101,250 mortgage when they purchased in May of 2000.

Irvine House Address … 79 OXFORD #49 Irvine, CA 92612

Resale House Price …… $250,000

House Purchase Price … $135,000

House Purchase Date …. 5/16/2000

Net Gain (Loss) ………. $100,000

Percent Change ………. 74.1%

Annual Appreciation … 5.6%

Cost of House Ownership


$250,000 ………. Asking Price

$8,750 ………. 3.5% Down FHA Financing

4.87% …………… Mortgage Interest Rate

$241,250 ………. 30-Year Mortgage

$54,685 ………. Income Requirement

$1,276 ………. Monthly Mortgage Payment

$217 ………. Property Tax (@1.04%)

$0 ………. Special Taxes and Levies (Mello Roos)

$52 ………. Homeowners Insurance (@ 0.25%)

$277 ………. Private Mortgage Insurance

$271 ………. Homeowners Association Fees


$2,093 ………. Monthly Cash Outlays

-$120 ………. Tax Savings (% of Interest and Property Tax)

-$297 ………. Equity Hidden in Payment (Amortization)

$16 ………. Lost Income to Down Payment (net of taxes)

$51 ………. Maintenance and Replacement Reserves


$1,744 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$2,500 ………. Furnishing and Move In @1%

$2,500 ………. Closing Costs @1%

$2,412 ………… Interest Points @1% of Loan

$8,750 ………. Down Payment


$16,162 ………. Total Cash Costs

$26,700 ………… Emergency Cash Reserves


$42,862 ………. Total Savings Needed

Property Details for 79 OXFORD #49 Irvine, CA 92612


Beds: 1

Baths: 1

Sq. Ft.: 768


Property Type: Residential, Condominium

Style: One Level, Contemporary

View: Trees/Woods

Year Built: 1981

Community: University Town Center

County: Orange

MLS#: S654022

Source: SoCalMLS

Status: Active


This is a short sale subject to lender/lien holder approval. Commissions are subject to lender/lien holder approval. Any reductions in commission to be split equally between brokers.

BTW, the British really get it….

20 thoughts on “The real Ponzis and posers of Irvine

  1. winstongator

    I have been wondering how ponzi my wife and I could have gone. We probably could have gotten into a home 4X the cost of our current one. It is hard for me to imagine that. Some family members thought we were buying too much house at the level we bought at. We still have one empty room, and at 4x the home, we’d either have spent a lot more in furniture or have even more empty rooms. Then there are the many more places my daughter would have to hide.

    Two Fortune 500 companies are headquartered in my city. When looking at some for-sale properties to see prior sale prices, you can find out who owns them. It is amazing how reasonably priced, relatively speaking, these executives’ homes are, considering their million dollar salaries and tens of millions in stock compensation. There is a cultural difference in parts of the country as to how much people will spend on housing.

    Cash-out refinances are a key enabler of volatility in home prices. I don’t think the recourse nature of the refi will deter people from ‘free’ money. There have to be some simple regulatory changes to limit & deter. The revaluation for tax purposes.

    1. Perspective

      “…There have to be some simple regulatory changes to limit & deter…” Dodd-Frank makes attempts at this. However, shouldn’t the staggering losses be sufficient deterrent to creditors from making loans to people who can’t reasonably afford to service the debt? I think the recourse laws in CA are just fine. The burden is on the creditor to make “good loans.”

  2. ripcord

    I sure love that neighborhood of condos across from Mason Park. And it looks like this place is pretty close to rental parity. Too bad condos are so dangerous to get involved with right now.

  3. Feral

    There never seems to be a “day of judgment” for this demographic. Like buoys; no matter how far underwater, these types pop right back up. I expect the OC Housewife will soon announce a loan mod, celebrate with a trip to Phuket, time to bikini shop. Somehow the lifestyle continues with nary a hiccup. I’m unsure how they do it, but I’ve seen it happen time and time again, as far back as I can remember.

    Rules and laws seem to apply differently depending on whom they’re applied to. Broken contracts, broken laws explained as “a big misunderstanding”, or a “smart business decision”, etc. Is personal integrity becoming a trait embraced by fools?

    On a side note, a great guy I once worked with is now CEO of a very successful publicly traded company whose name 99.9% would recognize. He lives in solidly middle class town, nice home, nothing flamboyant, outside California.

    1. Planet Reality

      You are right. The day of reckoning never comes. It’s because they have more money and earning potential than most want to admit. While nicholas cage makes a new $20M movie, they may only get $350K in income or a $500K new product line. The real posers leaving are not on TV. But even for them there is always the option of finding the new older but wealthier husband. The secret these people understand is that life at the bottom isn’t that bad so there is only upside. I could never live like this, but I do give them credit for understanding this.

      1. winstongator


        There are some people who built real-estate mini-empires with earnings from a day-job, maybe a doctor, but there are at least as many who ponzied-up heloc’ing one property for a down payment for the next. Rinse & repeat as prices rise, dp requirements fall, and pay-option arms allow ultra-low carrying costs and you’ve got 5-10 properties.

        Nic Cage is your example? His Bel-Air home got foreclosed. How is that not an example of living beyond your means?

        1. Planet Reality

          So you think Mcmongle is going to be living in the poor house now?

          How many times do you need to see the Donald Trump story line play out to understand.

        2. Perspective

          There are also some, like my brother in Phoenix, who bought cash-flow neutral/positive properties in the years prior to the bubble. I doubt his household income has ever exceeded $50k with a large family, but they live below their means.

      2. Feral

        Yes. I’ve known several, pitied some once they hit 40; looks start to go, deals start to go south…day of reckoning?…nope, somehow they always find a new “soul mate” they move in with, who gets their “star quality”, wining and dining, provides the lifestyle. I knew one in her fifties, always dressed in St. John, luxury all the way. She shopped at garage sales, but always had a wealthy boyfriend. The last guy she married was in his eighties, burned through seven figures in about ten years traveling, dinners, cars, etc…fellow probably had a blast, but burned through about 90% of his cash.

        And yeah, Cage will be fine, someone will hire him. Ditto Lohan…she’ll probably win an Oscar, command $20/mil a film soon. No such thing as bad publicity. Float to the top.

      3. gepetoh

        This may come as a surprise, but I agree with PR. I think it’s just a matter of understanding how to take advantage of the system. Of course there are the likes of Nick Cage that can just earn their way out of their mistakes, but there are others who just simply know how to game the system into a certain lifestyle. The kicker is that many of them have figured out a way to leverage themselves into debt, and live the life of luxury USING that leverage for the rest of their lives. So they could die with millions in debt, but have also lived the great majority of their life in luxury. It’s an innate ability to many, I think.

          1. gepetoh

            They go to their grave with it, so I’m guessing… Yeah. I’ve never seen Real Housewives whatever, but I’m guessing they’re not agonizing with guilt over their lifestyle?

          2. Alan

            Not if the party goes all night long. Otherwise, I bet they do. Plastic surgery and botox clean up the bags and lines around the eyes.

            I agree too – there are more than a few who love the thrill of finding the next pot of gold, and how to skip out ahead of the bills.

            I guess Nick Cage is getting foreclosed because he doesn’t want to throw money away on underwater houses bought for speculation. Why throw new money making up for losses when you can use it to live big and buy new stuff? I don’t know how he gets around the banks coming after the difference, but maybe with enough lawyers he can get a deal.

          3. HydroCabron

            Cage might be a bad example: careers in Hollywood do have endings. The percentage of feature film stars who enjoy ultra-high earnings for more than 5 years is small. A sliver of those enjoy more than 20 years.

            It’s weird that Cage has lasted as long as he has, because he’s only good when the role comes to him. That lugubrious, haggard reading does not suit more than a few roles.

            I love the Cage foreclosure story because of one agent’s description of the decorating style: “frathouse bordello.” This should be incorporated into every listing, as appropriate, to join the other boilerplate terms such as “light and bright”, “turnkey”, and “executive home”.

            Google “frathouse bordello” and it’s the first hit.

          4. winstongator

            If that’s why Cage is getting foreclosed, then he is no different than any other pretender. How many homes & properties does Warren Buffet have? How many of those properties have mortgages?

  4. tlc8386

    Abfab is just about the funniest show ever!!! My favorite is when they fly to NY city for one door knob. Talk about excess in spending.

    For the Ponzi’s they just thought housing goes up forever totally inexperienced folks at finance–all the way.

    The housewives are a disgrace in excess and being a wife. Look at yourself in the mirror girls are you really happy? Everything they represent runied marriages, family and finances all for what? To think you are famous? Really–

    How are your children turning out?

    1. Perspective

      I think it’s interesting, that the one Housewives series that was cancelled after just one season, DC, was the one series that had a few educated and genuinely successful housewives. The problem was, the only poser on the show, was the only interesting person (“interesting” in the reality show world context where viewers want to see train wrecks).

      1. tlc8386

        Train wrecks must mean seeing fake; plastic woman with disfunctional families who only want money and notoriety in an effort to elevate their self esteem.

        Showing a real housewife who works, raises her kids, cooks and cleans is the real norm in order to afford these homes.

        They need a show The Real, Real Housewives.

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