Bank-owned in Mission Viejo

It's hard to argue that this now REO in Mission Viejo had much of a chance - bad timing and other-people's-money financing pushed the former owner from ownership to default and eventual foreclosure all within about eight months.

26265 Buscador, 92692
Asking price: $589,000
Asking price/ sq ft: $233
Income requirement: $147,250
Borrower purchase price: $749,000
Borrower purchase date: 4/6/07
Size: 4 beds, 3 baths, 2,525 sq ft (built in 1980)
MLS: S530277 (3 days on Redfin)
Zillow Zestimate: $712,500
2007 property tax: $3,244
HOA dues: $64 + $19
Type: Single Family Residence
Stories: Two Levels
Lot size: 5,000 sq ft
From listing: Exceptional value on this stunning view home!! 4 bedroom 3 bath AND a huge bonus room. Main floor bedroom and bath. Main floor bedroom currenlty set up as office. Lush landscaping including Kio Pond. Panoramic view of city and hills. Master bedroom and bath completely remodeled. Newer air ducts, newer water heater, newer furnace and lots more!!

We're not quite sure what a "Kio pond" is. Perhaps it is a distant cousin of a Koi?

The previous owner paid $749,000 - but that is a bit misleading since they didn't actually use any of their own money. They were able to get 100% financing in the form of a $599,200 1st mortgage and a $149,800 2nd. They were already in default in less than five months.

The notice of trustee sale was then posted in December on the first loan for an amount of $627,156 (either few or no payments were apparently made on the loan), and the property went back to the bank in March for $636,750. One more for Countrywide's growing real estate portfolio.

If we assume a sale for the full asking price, it would mean a decline in value of 21% in about a year. The sale would also equate to a loss for the embattled lender of $195,340.