Another day, another bank swallowed up - this time Wachovia. And, we're finding out that foreclosure starts in OC are way down. Not because people are making payments again, but because a new law went into effect that delays the process.
Today's property is an REO in Laguna Hills/Aliso Viejo (it's in the Aliso Viejo ZIP code). Perhaps if the timing were different, it would have been helped out by this new law. Then again, when one buys at the peak of the bubble and can't (or won't) make the payments anymore, would a delay matter, or would it only be postponing the unfortunate, inevitable outcome?
26286 Eva St, 92656
Asking price: $659,000
Asking price/ sq ft: $313
Bank purchase price: $588,800
Purchase date: 8/26/08
Size: 4 beds, 3 baths, 2,104 sq ft (built in 1989)
MLS: S526222 (190 days on Redfin)
HOA dues: $61
Type: Single Family Residence
Style: Mediterranean
Stories: 2 Levels
Lot size: 4,022 Sq. Ft.
From listing: RUN...don't walk! This is the best location in Laguna Hills and it's an absolute KNOCK-OUT!!! This very well appointed 4 bedrooms 2.75 baths La Posada home has too many upgrades too mention...but we'll try. From the hardwood, ceramic tile and tumbled travertine flooring, to the custom recessed lighting, custom paint, upgraded carpets and padding, remodeled bathrooms, built-in entertainment center, crown molding, custom window blinds, newer HVAC system, two separate fireplaces, eat-in kitchen, center island and lush landscaping....this home has it all! This development has one of the lowest HOAs in Laguna Hills and a very low Mello Roos. Centrally located. Easy freeway and tollway access. Close to shopping and the beach. Better grab this one before someone else does!
Customized financial info:
Minimum Income Requirement (using 30Y Fixed): $141,000, assumes no other debt/obligations.
Downpayment needed: $23,650
Monthly Payment on 30Y Fixed at 6.25% with property taxes and FHA mortgage insurance estimated: $5,016.28
Minimum Income Requirement (using 5Y fixed): A client wouldn’t take an ARM under this scenario as FHA Jumbo Financing is being used and the ARM rates are above Fixed rates because of the severe credit market disruptions. Investors have little appetite for high loan to value ARMs.
Disclosure: All rates offered to the client with 1 point cost. Rate quotes assume a purchase transaction with the required minimum down payment, 720 credit score, full income qualification and required reserves. Rates are subject to fluctuation. Custom rate quotes and rate lock advice are available by visiting www.thegreatloan.com.
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The previous owners bought the property in 2005 for $759,000 using a $607,200 1st loan (80%) from Lehman Bros and a $75,900 second (10%) from Wells Fargo. The home went into default in February and was eventually sold back to the bank at auction in late August.
Unfortunately, the previous owners did put some of their own money into the property - and it sounds like a lot of upgrading took place. Still, the lenders were the largest losers, since they're now having to deal with the REO now.
The current asking price is certainly not a fire sale - it's $100,000, or 13% off the previous sales price. It will be interesting to see if this property can be sold for the current price, and if not, how low it will need to go to find a qualified buyer.
Monday, September 29, 2008
Up for grabs
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4 comments:
The new law postpones the unfortunate and inevitable outcome.
The best solution may be the most painful initially for the nation and its economy.
Let the banks fail. All of them and any of them that partook in this ineptitude.
Then allow smaller and medium sized banks to buy up what's left and take over.
In the end we will be surprised to see more banks serving the industry, not fewer. More means higher competition, better rates and probably better service for customers.
People will undoubtedly lose value in their 401k's, lose their service jobs and many will foreclose and declare bankruptcy. Some families will even be wiped out financially.
But if this were to happen (we no know it won't, since the bailout is a forgone conclusion), it would at least allow markets, prices and fear to shake themselves out naturally.
I know it's counter-intuitive, but Adam Smith and Keynes instruct us that the market has an uncanny method of almost always sorting itself out. How quickly depends on many factors and the biggest is probably government intervention and protectionist policy.
Laissez-faire. Let it be.
The bailout bill just failed to pass in the House, so I don't think we can call it a foregone conclusion yet. Too many of us are infuriated by this. People are calling for public lynching of Wall Street CEO's on CNBC this morning.
For the first time in memory I actually agree with the Republicans on something.
The government is already subsidising the rental market with this legislation. Free rent for housing gamblers. I'm not getting my rent paid are you? Wait till they do away with Mark to Market. Every bank will want to keep these high asset value non performing loans with infinite interest income. No money down, free rent. How cool is that.
How about this one for $625, $34K cheaper:
http://tinyurl.com/546sc2
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