Ladera preforeclosure's one of many

We recently drove through Ladera Ranch and again were impressed by the interesting architecture of the buildings (both residential and commercial). So, why not take another look at how one of South OC's boom-era developments is doing.

Foreclosureradar.com shows 228 properties in the 92694 ZIP code as being in some stage of foreclosure. Of those, 35 are bank owned; 71 are approaching auction; and 122 are preforeclosures. Here is one of the preforeclosures that has an interesting story to tell:

7 La Salle Ln, 92694
Asking price: $665,000
Asking price/ sq ft: $289
Purchase price: $593,000
Purchase date: 5/30/03
Size: 4 beds, 2.5 baths, 2,300 sq ft (built in 2003)
MLS: S567883 (14 days on Redfin)
ZipRealty price tracker: Price Reduced: 03/20/09 -- $780,000 to $680,000
Price Reduced: 03/25/09 -- $680,000 to $665,000
Zillow Zestimate: $653,500
HOA dues: $196
Type: Single Family Residence
Style: Cape Cod
Stories: 2
Lot size: 5,870 Sq. Ft.
From listing: Highly upgraded home on a huge lot within walking distance to Award winning Ladera Ranch Elem. and middle school. Near community library, Avendale club house, trails, park, pool, water park and tennis courts. Very central location on a quiet kid friendly culd a sac. This home is perfect. It is the end house on the street so it only has a neighbor on one side. Upgrades include plantation shutters, wood blinds, designer drapes, granite kitchen and stainless steel appliances including refrig., surround sound in family room, alarm system. Beautiful hardwood floors throughout the home, custom closets, marble in master bath, designer nuetral paint, apoxy garage flooring with built in cabinets for storage. Crown molding, raised baseboards, built in barbq and fire pit in over sized very private backyard. Home includes washer and drye. This is a must see home.



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How predictable was this situation? Very. The current owners - whose primary residence is listed as another address in Ladera Ranch - purchased this property new from the builder in 2003 for $593,000 using 80% financing. Assuming this was a fully amortizing loan, they would have been paying down the $473,700 principal for the past five years and likely wouldn't be in a short sale situation.

But they didn't keep their $119,300 downpayment trapped for long. In late 2004 they took out a $299,773 second from Countrywide. The real kicker was in March 2006, when they refinanced into two loans totaling $965,000 from Countrywide. Are you freaking serious?

That would mean Countrywide believed the property had appreciated $372,000, or 63% in less than three years to be sufficient collateral for the loans. A notice of default was filed in January against the first loan.

Redfin says the median home in Ladera right now is valued at $270 per square foot. If we assume this goes for our subject property, it should sell for $621,000. Would BofA take that? Since this is a second residence (investment property), the rules say our tax dollars shouldn't get wasted paying for this debacle.

Assuming the short sale can get completed for the current asking price, it would mean a loss in excess of $300,000 before sales costs and lost interest and fees.