How Greg Louganis Bounced Back From Near Foreclosure

Sep 9, 2015

Decades after he established himself as the greatest Olympic diver in the history of the sport, Greg Louganis was in a dire predicament. His “idyllic” home in Malibu, CA, which he had owned since 1984, was facing foreclosure. A financing deal that was arranged through a contractor he hired to clean black mold out of his home had gone sour, the result of loan documents containing forged information that he was unaware of until well after the fact.

Because of this, repairs in his home went unfinished and untouched for years, leaving his home in disarray. By 2012, Louganis had no equity in his home. He had not made a mortgage payment in months and faced possible eviction.

“My head was just spinning, because I was living in a half-demolished house for seven years,” Louganis tells The Home Story.

Luckily for Louganis, he was able to find a way out of debt and his ordeal. This is how it happened. 

A “Wonderful” Home By the Ocean

It was 1985, just after Louganis had won gold medals in the springboard and platform events in the 1984 Olympic Games in Los Angeles.

By that point he was contemplating retirement.

“That was the first thing I really wanted to do is have a home, because that was a sense of security for me, and it was a symbol of stability,” Louganis said in a television interview in the early 1980s.

Louganis came across a hillside property that at first seemed small and quaint from the driveway, but behind that house was a large patio and backyard that overlooked the beach.

“I thought the home was very reflective of me,” says Louganis. “It was just wonderful.”

He purchased the three-bedroom home for just under $400,000. Over time he had a personalized diving pool with a diving platform (but no springboard) added to the property. “I was afraid that if I used a springboard I would end up in a canyon,” he jokes.

His home became his sanctuary. When he retired from diving in 1988, Louganis often used his home for entertaining, once hosting the Australian Olympic diving team for a barbecue just before the 1996 Summer Olympics in Atlanta.

Green Improvements

By 2007, Louganis wanted to install solar panels in his home with the intention of reducing his carbon footprint.

“It was a dated house, and I really thought that was the best thing to do,” says Louganis.

He started interviewing contractors to get quotes. A trusted friend introduced him to a contractor who regularly worked with green builders.

“She looked at the house and found black mold,” says Louganis. Black mold is toxic and can cause health complications if left unaddressed. Louganis, who is HIV-positive, had good reason to be concerned.

“Since I have a compromised immune system, I’m thinking, ‘Oh my God, my house is killing me!’”

Financing this renovation would require a lot of money. The contractor told him he would be able to pay for the renovations by making a complex investment in a law firm she would put him in touch with. He would be using all of his savings and the equity of his home to pay for the investment, which the contractor told him would be “at no risk, no cost.”

He agreed to make this investment, despite having done little research on such an investment or by thoroughly examining the paperwork. Louganis says he never received a copy of the loan documents upon signing the deal, and it would be years until he would see them.

“I was making decisions based on fear because she was telling me that my house was killing me, so I was terrified,” says Louganis.

A few weeks into the renovations he learned that the investment had soured. He was out of money, and the renovations were unfinished, leaving his home a mess and Louganis with no equity in his home. When he was finally able to get a hold of the loan documents, he discovered that the loan officer (a cousin of the contractor’s) who created them had forged crucial information like his income.

“I looked at the stated income, and I never made that kind of money in my life!” he says.

“It was very disturbing, emotionally speaking, because I didn’t know what was going to happen,” says Louganis. “The house itself should have been condemned in the condition it was in.”

By then Louganis had taken all of the equity out of his house. He was now $1.2 million in debt.

Saving His Home, His Finances, and Himself

In the new HBO documentary “Back on Board: Greg Louganis,” he is at first seen dealing with his financial struggles surrounding his home.

“I haven’t made a mortgage payment since November 2010,” he says at the time of the documentary’s filming. By then he was selling most of his belongings, including mementos from his Olympic glory days, to make ends meet.

At one point he purchased an RV as a backup living plan.

“I was paralyzed, and I didn’t know what to do,” he says.

He was away in London judging a diving event when he learned his house was going into foreclosure.

“My real estate attorney said I had to get everything out of the house because if it got auctioned off it would be sold as is, and I could be arrested for trespassing if I tried to collect my things,” says Louganis.

Through a contact he was able to get a hold of an employee who worked for his lender. They reached an agreement to delay the auction until they could come up with a loan modification.

“We finally came to a resolution where we agreed upon a modification that was reasonable and I felt I could live with,” he says. After securing his loan modification, Louganis went about fixing the other problem area of his home: the unfinished renovations.

To pay for these renovations, he margined funds from his retirement savings, which was enough to get the job done.

“We found that the builders used substandard materials,” he says. “We had to put so much money into the foundation, but at least I could walk away knowing that it now had a solid foundation,” he says.

By then his fortunes were turning around. He was getting tons of work and married Johnny, his boyfriend.

Last year he sold his home for $1.8 million, enough to help him get out of debt and “replenish the margins.”

It was bittersweet for Louganis to move out of the home (“Johnny misses the pool especially”), but he says, “It is what it is.”

He now lives in a quaint apartment with Johnny in Los Angeles that’s affordable. They are saving up to eventually make a down payment on a new home.

“I’m happy right now that the whole thing is behind us and we have the opportunity for a fresh new start,” says Louganis. “At 55, you don’t expect that you’re going to have to start all over again. But that’s life.”

Editor’s Note: “Back on Board: Greg Louganis” is now airing on HBO and HBO GO.

The post How Greg Louganis Bounced Back From Near Foreclosure appeared first on Fannie Mae - The Home Story.

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