Ashes to Ashes; Dust to Dust
Ashes to Ashes -- David Bowie
"In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken: for dust thou art, and unto dust shalt thou return." Genesis 3:19
You can't take it with you. This is a rational argument justifying HELOC abuse. If you spend your whole life hoarding your money, you will die with a big pile of unspent money. Your heirs will undoubtedly be pleased, but if you didn't live a little while you had the chance, what was all the money for? How much HELOC abuse does this justify? All of it? If your house made you $800,000 over the course of 10 years, would it be OK to spend it all?
Today's featured property spent it all. This isn't the record for HELOC abuse, but it is pretty close.
Asking Price: $1,199,000
Income Requirement: $279,750
Downpayment Needed: $223,800
Monthly Equity Burn: $9,325
Purchase Price: $360,000
Purchase Date: 6/25/1998
Address: 67 Ashcrest, Irvine, CA 92620
| Beds: | 5 |
| Baths: | 4 |
| Sq. Ft.: | 3,000 |
| $/Sq. Ft.: | $400 |
| Lot Size: | 5,500 Sq. Ft. |
| Property Type: | Single Family Residence |
| Style: | Mediterranean |
| Year Built: | 1998 |
| Stories: | 2 Levels |
| Area: | Northwood |
| County: | Orange |
| MLS#: | S548540 |
| Source: | SoCalMLS |
| Status: | Active |
| On Redfin: | 7 days |
TREMENDOUSLY SPECTACULAR PALACIAL.. Blah, blah, blah...
PALACIAL? downstars? elementray?
I wonder what these great neighbors will think once they see how much these people abused their HELOCs?
This property is a case study in serial refinancing and mortgage equity withdrawal.
- The property was purchased on 6/25/1998 for $360,000. There was a $288,000 first mortgage, a $54,000 second mortgage, and an $18,000 downpayment.
- On 11/8/1999, the property was refinanced for $436,000. In just over a year their $18,000 netted them $76,000.
- On 3/23/2004, they refinanced for $516,000.
- On 7/26/2004, they refinanced for $670,000.
- On 6/19/2006, they refinanced for $857,500.
- On 11/30/2007, the took out a stand-alone second for $350,000.
- Total property debt is $1,207,500.
- Total mortgage equity withdrawal is $865,500 including their downpayment.
These people owned a large house from trough to peak during a massive housing bubble, and they will have nothing to show for it. In fact, it looks like this may become a short sale given the amount of debt they are carrying. Live for the day...
.
Do you remember a guy thats been
In such an early song
Ive heard a rumour from ground control
Oh no, dont say its true
They got a message from the action man
Im happy, hope youre happy too
Ive loved all Ive needed love
Sordid details following
The shrieking of nothing is killing
Just pictures of jap girls in synthesis and i
Aint got no money and I aint got no hair
But Im hoping to kick but the planet its glowing
Ashes to ashes, funk to funky
We know major toms a junkie
Strung out in heavens high
Hitting an all-time low
Ashes to Ashes -- David Bowie
I thought to be considered an “estate” you would have to have something on at least a half-acre or more, not something less than 1/8 of an acre. Only in California…
I agree, an estate should have at least an acre, circular drive and of course a gate. Only in So Cal can one expect to fetch $1.1Mil for a stucco tract house. Once again these people are living in the past. This one will be a pretty good deal at about $800K in a year from now.
If they bought at 360k in 98 with 3% appreciation per year it would be 483k with 4% it would be $534 and with 5% it would be $586k this year.
The house would have to appreciate by 8% a year to be worth $777k today.
I still may leave OC if this is a return to the fundamentals.
This one has a very long way to fall. No need to even guess at this point.
I’m not 100% sure, but this appears to be the same model home as 7 Green Hollow.
It is the same model as 7 Green Hollow, a Winsome model Bainbridge tract. The king of NW Pointe, Mike Dunn, has both listings…
Prices have been sticky there outside of the fairly recent REO comp on Green Hollow which doesn’t appear to have had a great effect on prices. That one was $895K closing price for 2,650sf…
I’d buy this house for $900K today if they’d sell it to me for that much.
Give it a shot
He’s got 9 Hibiscus as well.
Listed at $1.499M, hasn’t moved either.
So you’re telling me that this house appreciated nearly 10% per year from its purchase in 1998? For pure entertainment’s sake, I really wish you would pay $900K for this house. I’d definitely buy some popcorn.
On the “flip” side, it was pizza-brained thinking like yours that got us into this problem in the first place, so it’s hard to find enjoyment in the kind of behavior that’s hosed up our economy.
Except I can afford it… $500K mortgage at 6% interest rate for 30 years, fixed. I don’t think mortgage interest expense, pre-tax, of $2500 per month “got us into this problem”. Fortunately this pizza brain bought in 2001 and have banked that equity…
just because you can afford it doesnt mean its a good decision but again you make your own decisions. you are in a good position, dont rush
I’m not. $900K is $300K off asking. I don’t think that is going to happen anytime soon.
Wait ‘till the REO.
This place will be 900K, maybe not the next knife catcher, but the next second next in two years. I feel that.
Wow, this house made it’s owner’s $86,000/yr tax free for 10 straight years.
Now if they had the foresight to put all the money into gold.
also, they only had to pay property taxes on $430k, not $1.2 Mil.
Maybe we should change prop 13 so that your tax base changes every time you refi. That might also have put a break on this bubble.
I like that idea.
Interesting idea! Long ago, when you re-fi’d your taxes did change, because you were doing the re-fi to add on to your house, not pay down your credit cards.
Fantastic idea! Seems to be a great comprimise… would not only help break the housing bubble, but should also help our local gov’t budget.
They have plenty of company. There is one in Malibu purchased in 1994 for $550k going to auction this week. They ran up loans + credit lines of $1.9 million. The property, in good condition, might sell for $1.2 in the current market. If abused or requiring major repairs, maybe $1.0 million, probably less.
Nice house. Grossly overpriced.
Once the financial crisis soaks in deep, this place should depreciate nicely.
Remember “The Ultimate Post”?
http://www.irvinehousingblog.com/blog/comments/the-ultimate-post/
Check out the overhead map on redfin. These guys were backdoor neighbors. Maybe they chatted about how much “income” they were making over koolaid.
Probably a different situation. The 3 Green Hollow house had an owner that was using his house to support a failing business. They weren’t even putting money into upgrades…
Or, they paid the PMI+taxes+insurance with the Refinances and lived in the house for 10 yrs for free or ( $18,000 down). Now, with current prices they might just be able to get a free and clear house with the rent savings of 10 yrs.
SMART!!!!
This is absolutely pathetic. My post is addressed to the “owners” of this Pottery Barn “Palace”.
You were greedy and irresponsible, now the American people will have to bail you out. Yeah, you got to live in your unrealistically perfect home for a while and you bought some nice toys, but at what price? What sort of lesson is this for your kids?
I hope you enjoy moving back in with your parents, or better yet, living in that Mercedes you paid for with your HELOC money.
Sorry for the rant, but I feel better now.
One saving grace is that these greedy borrowers WILL pay a nice chunk of income tax and have no cash with which to pay it.
The price is wrong, it is currently up for sale for 1,199K not 1,119K
Just goes to show you how clueless or greedy these lenders were. On November 30th of last year they gave these folks $350K for house that was already worth less than the oustanding paper. God help us all!
This was a pretty smart buy.
While Congress is working on the bailout, watch out, IAC may start its own bailout plan too. IAC just write off some bad asset (layoff) and they are plotting some zone changes again. Basically, more high-rise, more 5 stories apt.
To me, zone changes more like when you play a baseball game at bottom of 9, 2 out, and you need to re-play from 3rd inning again because Irvine City Council rules that the previous call at 3rd inning is not right.
All this will make IAC the biggest winner at end of the game.
Sweet house. Too far north and too $$$ for me though.
Maybe we should change prop 13 so that your tax base changes every time you refi. That might also have put a break on this bubble.
Yep. We have to reform our laws to make it so selfish people can’t take us all down like this anymore.
Spoken like a true renter. Get back to work, those burgers are gonna burn.
You must miss spamming the OC Register blogs.
Sorry about your equity man. I know it hurts, but try not to be bitter.
Email your congressmen. Make sure they hear you. Who cares if only a staffer reads the first sentence? Make the first sentence count!
I emailed Campbell and I felt better….like I’m doing something. I’m emailing Boxer and Feinstein tonight. I also emailed radio station KNX when they did a stupid story today about this poor mortgage broker couple in Culver City who are in their 60’s and 70’s and who have to keep working because their house depreciated in value and there’s no business coming in. I almost ripped the radio out of my dashboard…portraying them like a pair of elderly victims. Give me a break!
I’ve noticed that some on KNX are now calling the bill the “financial rescue plan”. What pansies!
IR, doesn’t this property deserve the: WTF award?
Yes, it probably does.
and you say that some fool lent then a second for 350K in 11/07, and now i get to pay for it, thanks to the US Senate
Are there any homes in Irvine that come with a reasonable lot?
You’re as smart as a congressman as far as I’m concerned considering your knowledge of both Irvine and this bailout in general.
Hey people, unless you pay **EVERYTHING** by cash, and I do mean **EVERYTHING**, STFU.
Don’t tell me that all of you in this blog are Chinese who takes Cash Only on all transactions.
Although this bailout sucks, it is needed for **CREDIT** to continue to exist. Think about it hard before spewing unfounded truth.
Let’s see you try to buy a house with 100% down (and don’t give me that I rent bullcrap).
BTW, my next house is being paid for by 100% cash transaction since that country’s mortgage payment deduction sux.
It’s nice when you have 7 figures and not tied to the stock market.
LOL
the wankers like Chris are starting to come out of the woodwork
I’m also here thank you very much. Unfortunately you have came out of your rear end too late.
Anytime you people don’t know what the hell you’re talking about while complaining and asking people to call congress to reject something that will save not wall street but main street credit, you’re simply destroying the very fabric that, unfortunately, is holding this economy together, namely, CREDIT.
I actually am glad the House rejected the first version. However, something must pass. This govt can no longer sit around doing nothing while nobody, not even businesses with GREAT book (cooked or not), cannot even get a single loan.
And if you work, you’re a wanker. Why don’t you NOT work and simply live on what you got? Oh so you need work…well tough shit…can’t because there is no longer a thing called CREDIT. Everyone pay by cash and no cash for you.
“Although this bailout sucks, it is needed for **CREDIT** to continue to exist.“
Baloney!
Business always boils down to transactions between people. If the person extending credit KNOWS the recipient is good for it, then the transaction happens. The finance world is just about to re-learn this fundamental. No more Chinese peasants unwittingly lending money through multiple blood sucking middlemen to our gardeners to buy homes they can’t afford.
Welcome to the new old paradigm.<