Nearly an '01 rollback in RSM

This property in Rancho Santa Margarita is asking only a few thousand dollars above the price it went for new in 2001. Don't worry though - the owners certainly got the bank's money's worth out of the experience...

37 Arbor Walk Ln, 92688
Asking price: $694,000
Asking price/ sq ft: $201
Purchase price: $686,500
Purchase date: 6/22/01
Size: 4 beds, 3 baths, 3,450 sq ft (built in 2001)
MLS: S548521 (37 days on Redfin)
Zillow Zestimate: $899,500
HOA dues: $46
Type: Single Family Residence
Style: Mediterranean
Stories: 2 Levels
Lot size: 7,177 Sq. Ft.
From listing: Awesome End of the Street Las Rosas Home! This Property Features a Massive Pool Sized Side Yard. There is Tons of Potential with this House. Travertine Flooring, Open Kitchen with Island Sink, a Generous Upstairs Loft, a Bedroom with Full Bath Downstairs. Wonderful Master Bedroom with Balcony and a Fire Place. The Enormous Master Bath Features Two Vanities, Two Walk in Closets Stall Shower and a Roman Tub. This Property is a Must See. What a Deal!

The current owners purchased the property new from K Hovnanian in 2001. They obtained a $412,850 loan and put $273,650 (about 40%) down.

In 2004, WaMu gave them a loan for $692,000, which extracted all their downpayment plus a bit more. In 2005 they refinanced into a $740,000 loan. The next year, they took on a $750,000 loan, and in November 2006 they went back for a $200,000 second. That means total debt on the property was $950,000.

The property went into default in June, and the notice of trustee sale was filed in September against the first loan in the amount of $782,975. If we were to assume a sale could go through for the asking price of $694,000, then it would be $256,000 less than the total of the two loans on the property. We know the amount owed on the $750,000 loan is now above the original amount because of unpaid interest and other fees.

A sale for the current asking price would also be just $7,500 above the original price seven years ago.