Was it a bad idea for Countrywide to extend 100% financing to the owner of this Trabuco Canyon property in 2007?
Let's see: One year later, the house is in preforeclosure and the owner is hoping to sell at more than a 30% discount off the previous sales price.
What a disaster. And, what a common Orange County real estate bubble story.
20341 Sycamore Dr, 92678
Asking price: $399,000
Asking price/ sq ft: $468
Income requirement: $99,750
Purchase price: $579,000
Purchase date: 6/11/07
Size: 2 beds, 1 bath, 853 sq ft (built in 1948)
MLS: P636378 (83 days on Redfin)
Zillow Zestimate: $543,500
Type: Single Family Residence
Style: Ranch
Stories: 1 Level
Lot size: 5,000 sq ft
From listing: Located in the beautiful community of Trabuco Canyon. This country home offers and artist studio/ workshop plus a large tack shed and room for a horse or playground. With 2 bedrooms plus office, this home has a versatile floorplan. Spaciosu living room with bay window, skylight and cozy wood stove. Community horse rena and trails. Neighborhood elementary school.
This type of property obviously offers a different type of lifestyle than other parts of South OC, but the depreciation is startling nonetheless. The house is obviously dated but perhaps the large lot has potential. We would be wary of the fire danger.
The current owner did not have to put any money down to take possession of this property in June 2007. A notice of default was filed against the property in early July in the amount of $16,087. There are also some unpaid property taxes.
Assuming the property can be sucessfully sold for the full asking price (we wouldn't be surprised if this property was priced artifically low to attract bids), it would mean a loss of $203,940, including 6% sales costs. Or, not including sales costs, it would equal a depreciation of 31% in a little more than one year.
Wednesday, July 30, 2008
Major rollback in Trabuco Canyon
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9 comments:
"Artificially low"- is that sarcasm. That place is in the canyon and 800 sq. feet. This is blatant fraud. The "buyer" didn't seem to make more than one or two payments. This pattern is even more prominent in Santa Ana.
This story is not being told and should be; there were many shills that sacrificed their credit score for some cash with the loan monkey and the grifter walking away with the bulk of the proceeds. Guess who get to pay for this scam tax payers and those who borrow money because in the long run the banks will get their pound of flesh very slowly.
I smell fraud!
Why didn't the realtor clean up the crap piled in front of the house before taking the picture? Do they even want to sell this place?
I thought this was a kids' playhouse until I clicked through to the Redfin link.
Frrrrraud.
The Real Estate Market Starts Climing Again
During the past couple of years we've all seen a tremendous change in real estate in the country.
This change actually has spread all over, businesses loosing money while gas prices are extremely high.
The real estate market has become a big issue for all of us out there, we've seen many homeowners loosing their homes and struggling to find a home to rent because of their credit.
What happen to us?
Remember the bubble 4 years ago?
That's exactly the answer, from years of prosperity and times of spending, traveling and investing in stocks and real estate, we are now experiencing another bubble but this time the bubble is going in a different direction and we are wondering what to do.
So real estate was going down and it's still going down, some economists say that it will get stable in 2 years from now.
The sellers market became a buyers market, and today we all know it by now.
Investors and renters that saved their money for better days to buy to make money are in the market today, that's making the real estate market busy.
Real estate agents that learn how to change with the market also learned how to make money from the changes, these real estate professionals are making lots of money and while we are all struggling for business they're making the business.
Today you can get a home directly from the banks for almost half the price.
I've seen homeowners that are so desperate that they're willing to give their homes for free, just come and take their loan and continue their payments.
On the other hand, investors are looking to buy homes in bulk, they can get homes $.50 on the dollar.
Some banks like bank of america and countrywide are selling hundreds of homes in bulk to investors at a discount prices.
So real estate agents are busy getting hundreds of listings and reo's from banks, then they're selling these homes at a low price to future homeowners and investors.
It's definitely a buyer's market like we had in the early 90's, so if you're an investor or a homeowner.
This is your time!
These are neighbors of mine. The “owner” lived off-site in Rancho Santa Margarita and immediately quit-claimed partial ownership to the occupants – two undocumented workers - a gardener and a housekeeper. Everyone wondered how undocumented workers could buy a home for $579K when we certainly couldn’t have afforded the monthly – never mind the property taxes. After the deal closed three other families moved in to pay the mortgage. There were eighteen people living in the house at one point, with nine cars and only two parking spots. A urinal was attached to an outside wall to allow the three grown men living in the gardening shed to use a toilet without disturbing those living in the “studio” out-building. A month ago the septic was overwhelmed and it took three trucks to pump it out. A hundred year old sycamore tree was cut down to make way for parking. This place isn’t worth more than $175K now. The “work” done on the house has ruined the resale value. It sure looked like fraudulent lending when it went down. It wasn’t owner occupied – the appraisal was obviously inflated. And it required over a dozen occupants to pay the ballooning mortgage for this 800 sq ft house. Having the graceful sycamore cut down to make way for parking was heartbreaking for all of us. Somebody made money, but they’re long gone. These people are losing their house. Everyone looses.
As it happens, the photo at the top of the article is not of the house but of a 350 sq. ft. studio (with 3/4 bath) which I built in the back yard several years ago.
There were two, not one, very beautiful sycamores destroyed on the property last year.
When I bought the property in 1985, it was the least expensive place in O.C. at $89K. It was in extraordinarily bad shape (no plumbing, no floor, 30+ cats and a pig)-an abandoned wreck. The realtor refused to enter the door. Even then, I considered the house over-priced. Bloody stupid business. We should all rent like proper human beings.
This house still sits. It is now listed for 300$k - and still not selling. It's still overpriced at 300,000$. The most recent sale price (through a Countrywide No Doc loan) was 579$K in June 2007. That's only 16 month ago! It doesn't even have central air - no heating. Today, 11-7-08 it is scheduled for auction; we'll see what happens. Illegal immigrants continue to squat in it at the moment.
A happy ending, at last, though not for the banks (or all of us regular folks who are bailing out the banks!). This little house closed escrow last week for...are you ready...280$K. It sold at a hefty 300,000$ discount from two years ago. Sales price in June 2009 is less than half the June 2007 price (a whopping 579$k). A small family has moved in and they are fixing it up. It is a great neighborhood, now restored to its peaceful calm. This house had 14 to 16 illegal immigrants in it last year, trying their best to keep up the ballooning mortgage payment. Now things are rolled back and back in balance.
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