Now an REO in Laguna Beach

Back in December, we profiled this property in Laguna Beach - a short sale that would have been a 21% loss had it sold.

Now, the property has completed the foreclosure process and is back on the market as an REO. Here are the basic details:

1601 Louise Street, 92651
Asking price: $1,300,000
Bank purchase price: $1,300,000
Bank purchase date: 4/9/08
ZipRealty price tracker: Price Reduced: 4/10/08 -- $1,499,000 to $1,399,900
Price Reduced: 4/24/08 -- $1,399,900 to $1,351,000
Size: 2 beds, 1.5 baths, 1,466 sq ft (built in 1953)
MLS: U8001487 (41 days on Redfin)
Type: Single Family Residence

Style: Spanish

Stories: One Level
Lot size: 6,500 sq ft
Description: If you like quaint, look no further. This is a two bedroom, with an office and one and one half bathroom single family home located in one of the most sought after cities along the california coast. The home features wonderlull outside entertainment space, nice views of the coastline, city lights, and the ocean. You are located close to all the good things in laguna, cresent bay, shopping, entertainment and dining. Come home to laguna beach, and start living the southern california coastal lifestyle today.

You couldn't make this kind of stuff up if you tried: The previous owner purchased the home at the peak in 2006 for $1.775 million with 100% financing from...No Red Tape Mortgage (we're not joking!). The funding came in the form of two loans, one for 75% ($1,331,250) and the other for the remaining 25% ($443,750).

Her notice of default came in October 2007, and the notice of trustee sale was filed in January 2008 for $1,404,721. Despite this amount, the opening bid at auction was set $1.3 million, and even that wasn't enough to attract a buyer as the property went back to the bank.

Assuming a buyer can be found who is still willing to drop $1.3 million for this property even though they could have already bought it for the same price at auction, the sale would represent a decline of $475,000, or about 27% off the previous price, not including any sales costs.