Octo-Closure: Nadya Suleman Defaults on her Landlord’s Mortgage

by on June 21, 2012Shannon O'Brien

When foreclosure started becoming the word du jour, and Americans were struggling under the burden of underwater loans and lost jobs, the ugly side of human nature went on glaring display. Scams and cons sprung up as cottage industries, promising to save homeowner’s homes from foreclosure. Real estate agents became instant “short sale experts,” and the mortgage industry was in a shambles.

octomom home in foreclosure Picture by www.abcnews.go.com

One of the uglier scams of all had to be the landlord that walked away from the mortgage but continued collecting rent from the tenant. Often, the tenant had no knowledge until the lender showed up at the door.

What happens, though, when the landlord trusts the tenant to make his mortgage payments and she decides to pocket the money instead? Additionally, the landlord can’t afford the payments either. Everyone’s not-so-favorite tabloid queen, Nadya Suleman, the “Octomom,” recently played out this interesting scenario in real life.

For anybody fortunate enough not to know whom this woman is, a refresher course: Nadya Suleman, implanted with 12 embryos, gave birth to eight children in 2009. Octuplets are rare, so she naturally received a lot of attention from the media. But, a single woman giving birth to octuplets who already had six other children – all the result of in vitro fertilization as well – unemployed and on public assistance, garnered international attention.

In March 2009, Suleman borrowed over $450,000 from her La Habra, California landlord to purchase the home she was renting from him. She was to repay the landlord by making his monthly mortgage payments.

Well, she didn’t. As celeb gossip site TMZ so eloquently put it, Suleman “hosed” landlord and note holder Amer Haddadin. Although the foreclosure auction was postponed numerous times over the past few years, it finally took place yesterday, and the opening bid of $355,643 brought no takers. Kind of makes you think twice about owner financing, doesn’t it?

So, why did she do it? Suleman decided she didn’t want to live in the $3,500-a-month, four-bedroom, three-bathroom home any longer and stopped making payments in June of last year. She attempted to sell the house in September 2011 to pay off the $450,000 balloon payment owed to Haddadin, but she overpriced it, and – you guessed it – the home languished on the market. This, despite her marketing it as a “celebrity home.”

All is not lost for the Octomom, however. Although she’s reneged on a promise to dance at a strip club in Florida (the people there made derogatory remarks about her to the press), and she’s being sued by the club’s owner, the payment she made for starring in a recently shot porn video, “Octomom Uncovered,” should float the bloated family for a short while. Then, there’s always the $2,000 a month in food stamps she receives, so they won’t starve.

Haddadin’s credit is, of course, in ruins and it’s doubtful he will ever entertain financing anyone else into homeownership. “I helped them and this is what I get. This is crazy,” he remarked.

The lender? Its next, unenviable job, is evicting Suleman and her brood of 14 kids so it can sell the home.

Octomom claims she took the strip club gig just to promote the porn video. She tells HLN “Showbiz Tonight” that her real hope is to become a role model for other struggling women. We wonder which role other women will want to model. Stripper? Men’s magazine nude model? Strategic defaulter? Media hound? How about serial-single-mom-on-assistance? A plethora of choices for the modern woman facing struggles.

Update: Endorsed by Octomom

How does that endorsement make you feel? Does it pave the way to use the service she’s endorsing, worry-free?

How about if it’s a loan? I mean, after all, “if anyone knows financial hardship Nadya [Suleman] does.” That’s right; Octomom has decided to go into cahoots with OctoLoan – a company that hooks you up with a lender “when you need money quickly.”

Although OctoLoan bills itself as a “cash advance” company, they also say they aren’t lenders or brokers, nor do they make loans. It’s merely a website that, in the company’s words, “collects the information you provide” and passes it on to a network of lenders.

So, Nadya, who has begged, stripped and porno’d for money, is now hoping that her vast network of fans will choose to do otherwise. You know, something more respectable, like take out a payday loan – with a 650 percent APR – when they’re desperate for money.

Suleman, mom of 14 kids who recently lost her landlord’s home to foreclosure, and subsequently filed for bankruptcy, has signed a “five-figure deal” with OctoLoan to promote the site, according to The Daily Mail.

She says she is now financially stable, has been off welfare for a whopping one month and is releasing a brand new single next month. This, of course, makes her qualified to give financial advice.

I have a feeling that I won’t need an OctoLoan because keeping everyone up-to-date on Octomom’s real estate endeavors could become a full-time job.

{ 5 comments… read them below or add one }

Keith Lawrence June 22, 2012 at 10:14 am

Unfortunatly foreclosure all to comon and everyone know of someone that have lost their home to the process. With that said.. there were other options. There are Realtor’s (CDPE or Certified Distresssed Property Experts) that specialize in assisting home owners that may be facing foreclosure due to hardships. Foreclosure is the last thing this family needed.

What a mess!

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Shannon O'Brien June 21, 2012 at 7:48 pm

Good points, Brad. Unfortunately, it’s only going to get worse.

The Obama administration has this new plan to sell foreclosures in bulk to big investment companies. They, in turn, will rent them out. While this is good news for tenants (with an influx of a lot of rentals into a market, rents typically come down), it’s bad news for homebuyers in areas such as California who are facing a severe shortage of homes for sale.

Once the dust from the housing implosion settles I think we’ll be ok. Home ownership will be in the hands of those that can truly afford it. Unfortunately, along the way, those that can’t will lose their homes and become tenants.

Thanks for your post!

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Shannon O'Brien June 21, 2012 at 7:44 pm

Good questions, David. The landlord threatened to take the house back numerous times, starting in early 2011.

It was a difficult choice for him, mainly because of the 14 children living there. Then, Nadya always held him off with one excuse and promise after the other. He, like most homeowners, was hoping for a miracle to save the home. He lived in the home for 11 years before Suleman moved in so there’s no doubt some sort of emotional attachment there for him.

Some reports claim that the landlord actually sold the home to Suleman’s father (although I wasn’t able to verify this) for $115,000 down and a $450,000 promissory note.

This is definitely a tangled mess of a web!

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Brad June 21, 2012 at 6:49 pm

Stripping to pay the mortgage! But seriously, deciding not to pay back a loan and not expecting to be foreclosed on is kind of a fantasy. With a great chunk of America’s homeowners “under water,” I wish their were some types of private/government programs to help people stay in their homes. It certainly doesn’t help the national economy to have everyone renting – home ownership helps drive our nation.

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David Pylyp June 21, 2012 at 6:05 pm

Had this home deal been a conventional purchase and there was no vendor based financing. Would this just be another foreclosure story? Is this because Octo Mom stopped making payments a year ago, why didn’t the. Landlord take the house back?

David Pylyp
curious in Toronto

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