On a full moon night in the rocky mountain winter.
My wine bottles low, watching for the snow
Ive been thinking lately of what I’m missing in the city.
Ridin’ The Storm Out — REO Speedwagon
Have you been feeling like we on this blog are Ridin’ The Storm Out? I do. Does anyone remember the final scene in Terminator? Sarah Conner is told by a gas station attendant that a storm is coming. She responds, “I know” with a deep reflective look of someone who has seen the future Armageddon. Can you relate?
We have broken an important psychological level for pricing in Quail Hill. Today’s property is a bank REO that went for under $500,000 a few months ago. It is back on the market now, and the bank isn’t even trying to get above the $500,000 mark.
Bank Purchase Price: $477,000
Bank Purchase Date: 6/8/2007
FB Purchase Price: $551,000
FB Purchase Date: 6/30/2005
Address: 212 Dewdrop, Irvine, CA 92603
Sq. Ft.: 1,200
$/Sq. Ft.: $417
Lot Size: –
Year Built: 2004
Stories: Two Levels
Area: Quail Hill
On Redfin: 7 days
From Redfin, “BANK OWNED !!! Stunning 2 story Townhome with lots of top notch upgrades. Quiet interior street, large living room, dining room, guest bath downstairs, courtyard patio entrance, 2 car attached garage. Walk to Park, Playground and Shopping. Resort living !!”
Is being BANK OWNED something to get excited about? I guess it is worth ALL CAPS and three exclamation points!!!
What are top-notch upgrades? Are there bottom-rung upgrades?
Bear with me on this conjecture, but based on the REO purchase price, I am guessing this was an Option ARM that exploded. The primary mortgage should have been 80% of the original purchase price or $440,800. If the bank was willing to bid $477,000 at a foreclosure auction, this likely represents the outstanding balance on the first mortgage. Only an negative amortization loan with a low teaser rate would grow by $36,200 over two years.
Negative Amortization loans — great innovation… Not.
Judging by the description, there is a realtor involved in this transaction. If the bank gets their asking price, and if they pay a 6% commission, they stand to lose $81,940. Although when you think of the other costs involved with the foreclosure, the real loss was likely much higher.
BTW, Do you like our new REO symbol?