Pair 'o REOs in Lake Forest

These two properties in Lake Forest have essentially the same story to tell, so we're going to feature them together. Both were purchased during the bubble years with...let's call it a "limited" amount of downpayment money needed.

Now, they've gone through foreclosure and are back up for sale as bank-owned properties.

22981 Ditz Lane, 92630
Asking price: $239,900
Asking price/ sq ft: $202
Bank purchase price: $256,500
Bank purchase date: 4/4/08
Size: 2 beds, 2 baths, 1,189 sq ft (built in 1972)
MLS: S517362 (114 days on Redfin)
ZipRealty price tracker: Price Reduced: 2/01/08 -- $324,900 to $299,900
Price Reduced: 2/14/08 -- $299,900 to $289,900
Price Reduced: 3/02/08 -- $289,900 to $279,900
Price Reduced: 3/06/08 -- $279,900 to $269,900
Price Reduced: 3/07/08 -- $269,900 to $259,900
Price Reduced: 3/15/08 -- $259,900 to $258,800
Price Reduced: 4/19/08 -- $258,800 to $239,900
From listing: Large 2 story townhome!!!! Great area, quiet and secluded street!!! Large bedrooms!!! Lots of storage!!! Large family kitchen!! Nice yard!!!! This property comes with 2 car garage!!! Great school system!! Wonderful area! Community assoc. Offers great entertaining and recreation!!! Must see!!!

Exclamation point abuse is alive and well here. The former owner "paid" $439,000 in July 2006 (essentially the peak of the market) with $0-down financing - a $351,200 first loan and a $87,800 second (80/20) from Peoples Choice Home Loan in Irvine. Surprise, surprise: This company was a lender for people "with credit problems." It also is no more as it filed for bankruptcy in 2007.

This condo went back to the bank (HSBC) for $256,500 - well below the notice of trustee sale amount of $371,548. Assuming a sale for the full asking price, it would be a decline of 45% off the peak price, not including any sales costs.

23004 Ditz Lane, 92630
Asking price: $269,900
Asking price/ sq ft: $296
Bank purchase price: $248,940
Bank purchase date: 3/6/08
Size: 2 beds, 1 bath, 912 sq ft (built in 1972)
MLS: U8001820 (15 days on Redfin)
From listing: Single-story ground level end unit in nice neighborhood. Enclosed patio, two-car garage and lots of windows --- shows light and bright.

Notice the "vintage" kitchen on the right. The image at the top of this post is the exterior shot of this property.

Not to sound like a broken record, but here we go: This property was purchased by the doomed borrower for $430,000 in December 2006 (again, either right at the peak of the market or just after) using 100% financing from JPMorgan Chase. There was a $344,000 first loan and an $86,000 second (80/20).

The NTS (notice of trustee sale) amount was $365,964, but it went back to the bank in March for $248,940. Assuming a sale for the full asking price, the depreciation then would be 37%, not including any sales costs.

This is what the street looks like:

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There is also a preforeclosure on the same street - 23011 Ditz Lane. This condo is the same size as 23004 Ditz Lane.

The loan in default was made in May 2007 and is for $345,000 from WaMu. Do you think it would be wise for the borrower to struggle to keep the property with this much debt, considering banks can't unload homes here when they are asking in the low to mid $200,000s?

And, just for kicks: 23008 Ditz Lane has a "make me move" price on Zillow of $425,000. LOL.