***Update*** This listing was modified today to include a slightly lower asking price of $679,000. You think the realtor/seller saw our profile and decided they need to do something to move this property? The direction is correct; the magnitude is not sufficient.
|Purchased Price||$825,000||:::||Lot Size||8,900|
|Days on Redfin||139||:::||Baths||2|
|20% Downpayment||$139,980||:::||Area||Near Monrovia|
*Estimated monthly payment assume 20% down, 30-yr fixed @ 6.50%
This is a case of irrational exuberance and greed.
Let’s take a look at the sales history.
June 02, 1989 $360,000
Purchased on August 19, 2004 $750,000
Down payment – $0
1st Loan – $600,000
2nd Loan – $150,000
Refinance on August 29, 2006 $825,000
Withdrew $75,000 in cash
These folks bought on 100% financing in 2004 for $750k. It was most likely an option loan that reseted 2 years later, at which time they decided to refinance the property again at the re-appraised value of $825k. In the meantime, they pulled out $75,000 from the ATM on the side of the house and probably bought a new luxury car and a big screen tv. Fast forward to 14 months later, it’s October 2007 and they realized the market was going to hell and they could not afford the payments anymore so they put it on the market.
October 29, 2007 $729,900
January 11, 2008 $699,900
I didn’t see two separate loans for the refinance so the
owner squatter was somehow able to find a lender to take on the entire $825,000. Even in the heydays of nilly willy no-doc, non-existent underwriting bubble mania, I can’t see a bank stupid enough to make a loan for the entire amount. Perhaps greed got the best of everyone involved who was expecting further unjustified growth of the bubble. Since this was purchased on 100%, it would be considered a short sale and subject to bank approval. If the sellers get their asking price, the bank stands to lose $125,100 or 15%. Even with a price reduction, the listing has been on the market for 139 days.
In the meantime, these “owners” came out winners because they cashed out on $75,000 and walked away with nothing more than a dinged credit score. Assuming the lender is still float, how many more of these bad loans do you think they can absorb before they go under?
Things aren’t looking so peachy anymore.