Debt-loaded in RSM "won't last long!!!!"

Sure...this short sale preforeclosure in RSM won't last long, as the agent claims. Either it will quickly move through the short sale process or it will become a full-fledged foreclosure.

You be the judge when you take into account some additional background on this property...

8 Via Corbina, 92688
Asking price: $530,000
Asking price/ sq ft: $214
Purchase price: $498,000
Purchase date: 4/30/03
Size: 5 beds, 2.5 baths, 2,473 sq ft (built in 1999)
MLS: S574992 (13 days on Redfin)
Zillow Zestimate: $562,000
HOA dues: $94
Type: Single Family Residence
Style: Spanish
Stories: 2
Lot size: 4,713 Sq. Ft.
From listing: Fantastic Deal!!!Won't last long!!!! Beautiful 5 bedrooms 2.5 baths home. Warm and welcoming curb appeal with mature trees and cozy porch. Designer paint through out the family and formal living areas. Upgraded ceramic tile as well as carpeting through out. Enjoy the low maintanance back yard featuring custom built-in BBQ with an L-shaped bar,perfect for entertaining and covered by an oversized patio. Huge master suite with light and bright bath. Custom Plantation shutters through out and much more.

Our auto spell checker saw two spelling errors, plus we quickly saw a spacing error and an obvious grammar error. We didn't feel like looking closer for more.

Theoretically, the owners should have some equity in the property considering the asking price. After all, they bought in 2003 and paid $32,000 less than they are hoping to get. They also supposedly would be paying down the debt on their mortgage(s) for six years. We won't even go into whether the property should even be worth the asking price.

The problem is the additional debt. When they current owners took possession of the property, they used 99.9% financing and only had to put $250 of their own money into the transaction. A refinance in 2007 yielded two loans from Homecomings Financial totaling $747,000. Assuming the property sells for the current asking price, and we take into account sales costs, that's a blow to the lender of more than $200,000. The owners never really put any of their own money into the property to begin with, and they ended up extracting a significant amount of equity.

Given what you know now - owners with absolutely no skin in the game; loans well in excess of the asking price; short sale; preforeclosure (notice of trustee sale, scheduled sale date June 5 at the Santa Ana courthouse with an opening bid of $650,396) - what do you think is going to happen?