Lindsay Lohan Gave Her Mom $40,000 To Save The Family Home. The Bank Took It Anyway

At the height of her career, Lindsay Lohan earned more than $30 million from acting salaries, music, endorsements and other projects.

Some of that money went toward maintaining an expensive Hollywood lifestyle. Some disappeared through taxes, commissions, legal bills and years of interrupted earning power. And at least $40,000 went toward an unsuccessful attempt to save her family's Long Island home.

In October 2012, Lindsay gave her mother, Dina Lohan, $40,000 to help prevent the house from falling into foreclosure.

The payment bought time. It did not solve the underlying problem.

By 2018, Dina owed JPMorgan Chase nearly $1.5 million on a property estimated to be worth around $900,000. A New York judge ordered the house sold at public auction, bringing the Lohan family's long and chaotic battle to preserve the property to an end.

The Lohan Family Home

The two-story Colonial in Merrick, New York, was closely associated with Lindsay's upbringing and the Lohan family's years in the public eye.

The house had three and a half bathrooms, a three-car garage, a swimming pool and a long gated driveway. Lindsay lived there with her younger siblings Michael Jr., Ali and Dakota before her acting career took her to Hollywood.

The property later appeared on the 2008 E! reality series "Living Lohan," which followed Dina as she attempted to guide Ali's emerging entertainment career.

It also appeared in Lindsay's OWN documentary series. During production, Oprah Winfrey traveled to the Merrick house after Lindsay stopped cooperating with the production. Oprah confronted her about the missed commitments and delivered the now-famous instruction:

"You need to cut the bullshit."

By then, the house was already at the center of a serious financial crisis.

How A $650,000 House Accumulated $1.5 Million In Debt

Dina acquired the Merrick property in 2004 for approximately $650,000.

She later borrowed $1.3 million against the house. By December 2017, the amount owed had increased to exactly $1,492,784.21 as unpaid principal, interest, property taxes, insurance and other charges accumulated.

At the time, the house was estimated to be worth roughly $900,000.

In other words, Dina owed approximately $600,000 more than the home was worth. Even a successful sale at full market value would not have generated enough money to satisfy the mortgage debt.

This was not a temporary cash-flow problem that could be fixed with one missed-payment check. The property was deeply underwater.

Lindsay's $40,000 Bailout

The public first learned about Lindsay's attempt to save the house through an extraordinarily messy family incident.

In October 2012, Lindsay called her father, Michael Lohan, following an argument with Dina. Michael recorded the conversation and released it to the media.

During the call, Lindsay revealed that she had recently given her mother $40,000 to prevent the bank from taking the house.

The payment came during one of the worst financial periods of Lindsay's own life. Her multimillion-dollar movie salaries had largely disappeared, she owed substantial federal taxes, and the IRS would soon seize her bank accounts.

As we previously detailed, Lindsay earned more than $30 million, lost nearly everything and eventually started over.

Dina later maintained that the $40,000 was repayment for money she had previously lent Lindsay. Whatever the precise arrangement, the money was intended to help keep the Merrick home in the family.

It was nowhere near enough.

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The Foreclosure Battle

JPMorgan Chase sued Dina for foreclosure in 2013.

According to the bank's complaint, she had violated the mortgage terms by failing to pay portions of the principal, interest, taxes, assessments, water charges, insurance premiums and other expenses attached to the property.

Dina initially reached an agreement with the bank, temporarily stopping the foreclosure process. But the underlying debt remained, and the bank eventually returned to court.

By early 2018, Dina had failed to respond to the renewed foreclosure action. A judge entered a judgment against her and ordered the property sold at public auction within 90 days.

The ruling appeared to end the fight.

Dina made one final attempt to preserve the house by filing for Chapter 13 bankruptcy protection in September 2018. In her filing, she listed approximately $1.7 million in total debt. The bankruptcy temporarily stopped the scheduled auction, but it did not create enough equity or income to rescue the property permanently.

The house ultimately left the Lohan family.

A Symbol Of The Lohan Family's Financial Chaos

The most remarkable aspect of the foreclosure was that the property was not an enormous Beverly Hills mansion purchased at the height of Lindsay's fame.

It was a suburban Long Island house worth less than $1 million.

Yet Dina had managed to borrow approximately twice its original purchase price. By the time the foreclosure judgment arrived, the debt substantially exceeded the home's market value.

Lindsay had once commanded $7.5 million per movie. But even her fame and early fortune could not permanently support every expense and financial obligation surrounding her family.

Her $40,000 payment delayed the crisis. It could not reverse years of growing mortgage debt.

The Merrick house survived the first foreclosure action, a settlement with the bank and a last-minute bankruptcy filing. But after years of legal battles, Lindsay Lohan's childhood home was finally lost.