Big rollback in Foothill Ranch

This is the first potential 2003 rollback in Foothill Ranch we've seen lately that's not a small condo - though it's only a rollback of that magnitude if you assume the price at the low end of the asking range.

Still, it's a pretty nice case study of the types of declines that are slowly starting to affect more neighborhoods in South OC.

4 E Jameson St, Lake Forest, 92610
Asking price: $519,999-$550,000
Asking price/ sq ft: $288-$304
Income requirement: About $135,000
Purchase price: $730,000
Purchase date: 3/14/06
Size: 4 beds, 2.5 baths, 1,808 sq ft (built in 1995)
MLS: U8002993 (5 days on Redfin)
Zillow Zestimate: $632,500
HOA dues: $49
Type: Single Family Residence
Style: Contemporary
Stories: 2 Levels
Lot size: 5,000 sq ft
From listing: Beautiful home, this 4 bed room 2.5 bath, a big attic, 2 car garage is completely upgraded, new carpet, new paint, new backyard with Jacuzzi, and gazebo. It s classy and modern but warm and cozy. Great area, safe, family oriented, great neighbors, located by the 241, shops, stores and restaurants walking distance from home. Great schools and parks. You can t go wrong with this house. This house was bought only 2 years ago for 730,000 and now going for this unbelievable price of 550,000. This is a short sale and the lender is willing to move fast with the right buyer. You can t go wrong with this home. Come see for yourself, you and your clients will fall in love when you walk in.

Here is one of those extreme short sales that appears to have been approved by the lender - meaning they will be accepting a huge six-figure loss to get this moved.

The current owner is not doing so well with her real estate purchase. She bought the property at the peak for $730,000 with $657,000 worth of financing and a $73,000 (10%) down payment. We are not sure if she later "liberated" any of her money from the property via a HELOC or standalone second.

If the owner did not take out any cash, and the short sale is approved at $550,000, the owner would lose their $73,000 downpayment and the bank would be out about $107,000. That does not take into account any sales costs. A sale at that amount would also mean a depreciation of $180,000 or 25% off the March 2006 price.

If we were to assume the best offer comes in closer to $520,000 and the sale still is allowed to go through, then the numbers are even more gnarly: That would equate to more like a $137,000 stinger for the bank. It also would mean a depreciation of $210,000, or 29% off the last sale. We also would have a 2003 rollback in the books.

This is what the foreclosure map looks like within a 1 mile radius of this property, courtesy of ForeclosureRadar.com. There are currently about 40 properties in some stage of foreclosure: