REOs in Ladera

Same street...same situation: REO. These two properties are both bank-owned foreclosures in Ladera Ranch.

REO No. 1 (photo above)
22 Duskywing Ct, 92694
Asking price: $900,000
Asking price/ sq ft: $346
Income requirement: $225,000
FB purchase price: $750,500
FB purchase date: 10/03/03
Size: 5 beds, 4 baths, 2,600 sq ft (built in 2002)
MLS: S519387 (143 days on Redfin)
ZipRealty price tracker: Price Reduced: 3/21/08 -- $1,080,000 to $900,000
Zillow Zestimate: $837,000
2007 property tax: $11,041
HOA dues: $185
Type: Single Family Residence
Style: Traditional
Stories: 3+ Levels
Lot size: 5,800 sq ft
From listing: This property has it all! Pool, Spa, Covered Patio, Fireplace, Fountains, in-ground Trampoline and that's just the backyard. Tons of upgrades. Custom paint, window treatments, cabinetry, countertops, flooring and so much more. A great deal...don't miss out. Check out this fabulous 5 bedroom, 4 bath home with a spacious family room adjacent to the chef's kitchen with stainless appliances and granite countertops. Generously sized living room and dining room, downstairs bedroom, 3rd floor bedroom suite and loft plus a child's clubhouse. Master suite and master bath with dual vanities, jetted tub, spacious shower with seat and walk-in closet. Spacious secondary bedrooms with a shared bath and an amazing park-like backyard. DON'T MISS THIS OPPORTUNITY.


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Judging by the sales history, you wouldn't expect this one to have ended in foreclosure. The former and original owners purchased the home from William Lyon Homes and financed $700,000 of the $750,500 purchase price from American Sterling Bank.

In August 2004, they took on a new $750,000 first loan and a $101,306 second, liberating their downpayment plus a bit extra. In December 2004 the debt was consolidated into a $864,000 loan, and this was increased in April 2005 to an $886,600 loan from Bank of America. A second loan was added in March 2007 for $24,900.

The total amount of debt on the property was now more than $910,000. Doubtful that much if any principal was paid on that $886,600 loan - the notice of default came in January 2008, and the notice of trustee sale was filed in May for $930,979, which is $44,379 more than the original loan amount.

ForeclosureRadar shows the property went back to the bank June 5 for $945,219. It's a little odd then that Redfin shows the property has been on the market since before it was REO. Perhaps the listing is old and hasn't been taken down yet?

Either way, this will be a big loss for the banks involved. A sale for anywhere close to the asking price (doubtful since to compete with our other subject property they would need to drop the price substantially) would still show an increase over the 2003 sales price.

Here's REO No. 2:
11 Duskywing Ct, 92694
Asking price: $719,900
Asking price/ sq ft: $277
Income requirement: $179,975
FB purchase price: $970,000
FB purchase date: 5/22/06
Size: 5 beds, 4 baths, 2,600 sq ft (built in 2004)
MLS: S533904 (23 days on Redfin)
Zillow Zestimate: $774,042
HOA dues: $160
Type: Single Family Residence
Style: Craftsman
Stories: 3+ Levels
Lot size:
From listing: **Spacious & Upgraded Cul De Sac Home** This is a great Floorplan; Featuring a mainfloor Bedroom or Office,Open Family Room to the Kitchen, Granite Kitchen Counters & Natural Stone Backsplash, Ceramic Tile, Berber Carpet & Wood Floors, Plantation Shutters, Crown Moulding, Cased Windows, Freshly Painted, Spacious Master w/Upgraded Tile Bath, Walk-In Closet, Jacuzzi Tub & Separate Shower, Wired for an Alarm System, Custom Built-in Media Niche, Surround Sound Pre-wiring. Landscaped Yard w/Slate Patio, Lush Foliage & Waterfall. Great Opportunity! A Must See!

This REO followed a different path than the other one on the street. The former owners did not buy from the builder, but instead paid $970,000 to a private seller during the peak of the bubble. They financed $873,000 (90%) through Countrywide and put $97,000 down.

The payments soon became unbearable, and the property slipped into foreclosure. The notice of default on the first loan was filed in October 2007, and the trustee sale for $781,392 ($53,892 more than the original loan amount) came in January 2008. The property went back to the bank on April Fools Day for $669,375.

Assuming the property sells for the full asking price, it would mean a depreciation of $250,100 or 26% off the 2006 bubble price, not including any sales costs.

If you'd like to get an idea of what the area looks like in terms of foreclosures, take a look at this heatmap from ForeclosureRadar.com. The site limits at 200, so imagine what 42 more markers would look like on this if we could see them all at once:

(The green markers signify notice of defaults, the blues are notice of trustee sales, and the red ones are bank owned. For an explanation of the California foreclosure process, click here.)