Celebrity Foreclosure Autopsy Series – Celebrity #10: Vanilla Ice

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The foreclosure phenomenon of the last few years has had an impact not just on the average Joe, but on the rich and famous as well. In this series we examine high-profile foreclosures, the decisions both personally and professionally that led to them, and what you can do to avoid a similar fate.

Celebrity #10: Vanilla Ice

Claim to Fame

Ice Ice Baby

While this song is now a point of ridicule, in its day it was a smash hit, becoming the first hip-hop track ever to reach #1 on the Billboard charts. Robert Matthew Van Winkle, from Dallas TX was first a champion motocross racer until a broken ankle had him rethinking things. He got into break dancing and eventually rapping while recovering, and wrote “Ice Ice Baby” at the age of 16. When it was recorded and eventually released on his first disk, it was a B-side track that wasn’t given top billing as a possible single. Yet when a Georgia disk jockey came across it and started giving it heavy airplay, it led to Vanilla’s breakthrough into the mainstream consciousness, with his song becoming a standard for the hip-hop revolution of the early 90’s.

The fame of “Ice Ice Baby” led to Vanilla Ice making several movie appearances, countless merchandising opportunities, and even a high-profile eight-month relationship with Madonna.

Interestingly, Vanilla Ice’s Vanilla image was crafted by his production company in order to generate mass appeal and sell albums to a broader fan base. Yet stylistically, Vanilla was looking to be edgier. This clash, coupled with the inability to match the fame of his hit single eventually led to Vanilla Ice’s slow drift into musical anonymity.

Aside from a random appearance here and there, Vanilla remained under the radar until 2010 when “The Vanilla Ice Project” made its debut on the DIY network. It is a reality show where Vanilla and his crew renovate a Florida home, with each episode dedicated to a different room. He has since created a video series and written a book on how to successfully invest in real estate, which makes his inclusion in this series somewhat ironic.

What went Wrong

Due to a bit of misfortune and questionable decision-making, Vanilla Ice never made as much money as he should have from “Ice Ice Baby”. Nevertheless, the first time he made his way into the headlines for housing problems was nearly two decades later.

Vanilla’s mansion is part of a home owner’s association (HOA). When Hurricane Wilma hit, some palm trees came down in his neighborhood, causing damages. In order to cover repairs, the HOA asked for an additional $2800 from each homeowner. Vanilla never paid, and the figure began to grow.

By the time Vanilla owed $4,100, the HOA was fed up and filed foreclosure action on the home. Under the threat of having to appear in court, Vanilla settled with the HOA two weeks ago, putting the issue and the possibility of foreclosure to rest.

Lesson to be Learned

The foreclosure crisis has affected housing in more ways than one. When it comes to HOA dues, many homeowners go ahead and ditch out on these payments along with their mortgage, assuming that there’s little downside. Yet what they must remember is that these HOAs aren’t quite as inundated with late payments as the banks are, meaning that in some cases they may file foreclosure proceedings in order to get their missing payments before the banks have bothered to do so. This can mess up plans for strategic defaulters hoping to double-dip on their dereliction of duties. The same can go for special property assessments or property taxes.

While HOAs recover late payments once the banks take over ownership of a home and clear title, the time spread between getting that check and all those missing payments can be over two years in some cases. If this sort of thing is happening to the HOA’s coffers dozens of times over, they may not have enough cash handy to deal with association issues such as maintenance, repairs, or addressing the unexpected. When this happens, it is typical for the HOA to demand additional payments from the homeowners who are paying in, making them shoulder the burden of their defaulting neighbors.

When looking to purchase a home that is part of an association, buyers are always given all of the association documents to read and sign off on. While many buyers rubber stamp them and move on, there is much to be learned by determining the financial health of an association, including owner occupancy rate, foreclosure rate, and reserve levels. Given how HOAs in trouble pass the buck on to residents, a healthy HOA could have just as much long-term impact for a homeowner as changing interest rates and prices.