Agony of Defeat

Many smug speculators are suffering what Wide World of Sports aptly described as the “Agony of Defeat.”

9 TALL OAK Irvine, CA 92603 kitchen

Irvine Home Address … 9 TALL OAK Irvine, CA 92603
Resale Home Price …… $649,900

Block Party 11-9-2009


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Wide World of Sports

I was a kid during the Wide World of Sports era. Before ESPN and other sports outlets came along, ABC’s Wide World of Sports was your only source for unusual or international sporting events. According to Wikipedia, “Wide World of Sports was the first program to air coverage of Wimbledon, The Indianapolis 500, the NCAA Men’s Basketball Championship, the Daytona 500, the U.S. Figure Skating Championships, the Little League World Series, Triple Crown, The Open Championship, the X-Games, the Grey Cup, and many other events.”

The great part of Wide World of Sports was not always the events they covered; in fact, they were often quite boring. The show had a unique way of getting you to tune in each week, and sometimes you would stay and watch the entire show.

The opening sequence featured many different images of winning and losing, but none are more famous than ski jumper Vinko Bogataj, whose tumbling faceplant of March 21, 1970 was featured from the early 1970s onward under the words “…and the agony of defeat.” Bogataj’s fail is featured in Rich Hall‘s book Sniglets as “agonosis,” which is defined as “The syndrome of tuning in on Wide World of Sports every weekend just to watch the skier rack himself.” It is an indelible image that captures the complete failure of individual performance.

Sports provide a great microcosm of the struggles of life. The agony of defeat is something we all experience when an investment goes bad or a business deal doesn’t work out. Most of us suffer in obscurity and silence. The only evidence of the pain is the vapor trails on the web showing asking and sales prices and debt going bad. Far from being obscure statistics, these are our neighbors — or were our neighbors. It is hard to say where they end up after foreclosure.

9 TALL OAK Irvine, CA 92603 kitchen

Irvine Home Address … 9 TALL OAK Irvine, CA 92603

Resale Home Price … $649,900

Income Requirement ……. $120,982
Downpayment Needed … $129,980

Home Purchase Price … $561,267
Home Purchase Date …. 8/26/2009

Net Gain (Loss) ………. $49,639
Percent Change ………. 15.8%
Annual Appreciation … 15.8%

Monthly Mortgage Payment … $2,823
Monthly Cash Outlays ………… $3,680
Monthly Cost of Ownership … $2,770

Redfin Property Details for 9 TALL OAK Irvine, CA 92603

Beds 3
Baths 3 baths
Size 1,800 sq ft
($361 / sq ft)
Lot Size n/a
Year Built 2004
Days on Market 3
Listing Updated 10/27/2009
MLS Number S594108
Property Type Condominium, Residential
Community Quail Hill
Tract Ivwr

According to the listing agent, this listing is a bank owned (foreclosed) property.

Beautiful 3BR/3BA detached home with views! Custom tile entry leads to open living, dining rooms. Living room has a large balcony and media niche. Nice upgraded kitchen with granite countertops and newer appliances. Each bedroom has it’s own private bath. There is a large master bedroom with ceiling fan. Lots of additional built in storage. Oversized 2 car attached garage with epoxy flooring.

This property was purchased on 6/23/2004 for $640,500. The bank just bought it at auction for $561,267, and now they are hoping to get their money back from the FED supported prices. When the property was originally purchased, the owner used a $519,272 first mortgage, a $97,363 second, and an $18,130 downpayment.

At some point, he knew he was in trouble, so he tried to sell it. He spend a year and a half listing, delisting and chasing the market down.

Date Event Price
Oct 27, 2009 Listed $649,900
Aug 26, 2009 Sold $561,267
Sep 16, 2008 Delisted *
Sep 13, 2008 Price Changed *
Sep 03, 2008 Price Changed *
Sep 03, 2008 Price Changed *
Aug 21, 2008 Price Changed *
Jun 15, 2008 Price Changed *
May 21, 2008 Price Changed *
Apr 12, 2008 Price Changed *
Feb 26, 2008 Price Changed *
Dec 19, 2007 Delisted *
Dec 06, 2007 Delisted *
Dec 06, 2007 Listed *
Oct 18, 2007 Price Changed *
Oct 18, 2007 Price Changed *
Sep 19, 2007 Listed *
Sep 19, 2007 Listed *
Aug 29, 2007 Delisted *
Aug 28, 2007 Price Changed *
Aug 23, 2007 Price Changed *
Jul 01, 2007 Price Changed *
Jun 30, 2007 Price Changed *
May 30, 2007 Listed *
May 20, 2007 Delisted *
May 16, 2007 Price Changed *
May 05, 2007 Price Changed *
Apr 10, 2007 Listed *

He finally gave up in late 2008 as evidenced by the final delisting and…

Foreclosure Record
Recording Date: 05/28/2009
Document Type: Notice of Sale (aka Notice of Trustee’s Sale)

Foreclosure Record
Recording Date: 02/26/2009
Document Type: Notice of Default

It looks to me like he defaulted as the moratorium was put in place and got a few extra months. Perhaps the banks were behind in processing? Perhaps he continued to make payments even after he delisted in late 2008?

The agony for this foreclosure statistic is apparent. He over-borrowed and over-bought, and the weight of payments was crushing, so he tried to get out from under the dead weight. The property is listed for sale, and the owner relinquishes his dreams of prosperity slowly as he chases the market down. When he finally realizes the piggy-bank is empty, he capitulates; Atlas lets the world fall.

Block Party 11-9-2009

Everyone is invited to our next IHB Block Party next Monday, November 9. 2009, at JT Schmids at the District.

17 thoughts on “Agony of Defeat

  1. Freetrader

    I enjoyed the 1974 intro more than the 1977 intro – the action was spliced better and the film less grainy. This matches with my perception that sports coverage has only gotten grdually worse over the past 35 years — these days you can’t even get all the track and field events covered at the Olympics, for Christ’s sake. They only show the ones the Americans might win. Pet peeve of mine.

    Re: your comment on our ‘neighbors’…isn’t that really the problem? People like this clown weren’t our ‘neighbors’, they were speculators. The fact that he tried to flip the property 8 months after he purchased it makes his strategy obvious enough — I’ll bet he didn’t just buy the place and then get laid off six months later. Speculators like this don’t give a damn about the neighborhood, they just figured they would ride the wave a bit, with the banks money, and cash out a risk-free profit. I am all for capitalism, and certainly in favor of people making money in real estate using their own capital, but I am not in favor of giving government-guaranteed loans to some guy who is, in effect, a day trader with someone else’s $1 million asset.

  2. buster

    I am sure speculators like this will be back. The lure of “easy money” and his relatively painless loss means that it’s a low-risk game with high possible payoffs.

    It’s actually a very smart move. If you can put 5% into a gamble that has a decent probability of large gains, it’s a smart move to do so. The risk/reward dynamics still make real estate gambling a good proposition.

    When will the Fed stop allowing people to gamble with the taxpayers’ money — not anytime soon.

    1. Lee in Irvine

      “When will the Fed stop allowing people to gamble with the taxpayers’ money—not anytime soon.”

      The (bailed out) banks do this every day, gambling FDIC insured deposits with proprietary trading.

      Heads they win, Tails they break even.

      America has turned into a massive casino.

  3. Sue in Irvine

    I’ve always wondered why buyers have a first and second mortgage. Because the first wouldn’t cover the price and not enough down payment? Is the second mortgage through a different bank? Are they 2 totally different mortgages? Thanks.

    1. zovall

      I believe it is to avoid paying PMI. 80% first mortgage, 15% second mortgage, 5% downpayment will not require PMI whereas a 95% first mortgage, 5% downpayment would require PMI. Can anyone provide further clarification?

      1. CapitalismWorks

        It also has to do with priority of claims. A 95% first loan has more exposure to the borrower and the collateral than a first within a 80/15/5. The 15% second is junior to the first.

  4. newbie2008

    Looks like another McStacker. 1800sf on 3 floors. Really efficient home living, Not. Max land usage. A better model is the SF, CA with 2 family units — one on each floor.

    Looks to me that “owner” broke even or ahead.
    Cost: 18,130 down plus est. $4000 closing cost = $22,130
    Free rent for year: 12 * $2400 = $28,800

    $6,670 saving to “owner”

    Buster’s comment of the Fed’s allowing only 5% loss limit is so true. Just have issues with not paying my debts and obligations.

    Why did the bank bid $561,267 or $42k above the first loan?

    1. Geotpf

      Problem with the “one on each floor bit” is everybody except the top floor tenant then has a neighbor stomping about above him, which can be a big problem, depending on the quality of the construction. It also makes having a (small) yard or attached garage tricky or impossible.

  5. Lee in Irvine

    Lots of coming inventory in this neighborhood … no need to stretch the budget for this postage stamp apartment.

    226 Tall Oak, Irvine, CA? – more info »
    Foreclosure: $385,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    22 Tall Oak, Irvine, CA? – more info »
    Foreclosure: $333,700
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    347 Tall Oak, Irvine, CA? – more info »
    Foreclosure: $560,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    137 Weathervane, Irvine, CA? – more info »
    Foreclosure: $882,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    125 Lattice, Irvine, CA? – more info »
    Foreclosure: $1,000,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    147 Tapestry, Irvine, CA? – more info »
    Foreclosure: $1,000,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    148 Tapestry, Irvine, CA? – more info »
    Foreclosure: $1,240,000
    0 bed 0 bath
    “This property is up for Auction.

    88 Canopy, Laguna Beach, CA? – more info »
    Foreclosure: $560,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    152 Tapestry, Irvine, CA? – more info »
    Foreclosure: $956,250
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    23 Balcony, Irvine, CA? – more info »
    Foreclosure: $1,350,000
    0 bed 0 bath
    “This property is a Pre-Foreclosure.

    We got a second wave coming. FYI, Quail Hill is gonna hammered.

    1. Tom

      Lee, I commend your bearishness. Will you be going to the Block Party? I hope so because I’d like to meet you. I am a friend of Irvine Renter’s (he can vouch for me that I am not a crazed realtor on Kool-Aid looking to take you out). -Tom

      1. Lee in Irvine

        Believe it or not, I’m not an uber-bear, and I don’t enjoy talking down The OC real estate market or the national economy. The difference between me and the typical OC resident, is I had/have inside information. I saw this bubble forming, I knew it was a bubble, and I still know there’s a lot of hot air in the bubble. Most of the “experts” said there was “no bubble”, and these are the same people who insist the bottom is behind us. I know they’re wrong now, just as they were wrong 2 years ago. Perhaps you’re one of these people.

        Besides, how can anyone really believe we’re at a bottom when about 10% of OC homeowners are either in default, were in default and already lost their homes, or will be in default. Then you add a crappy job market, and you see these are not the factors that are associated with real estate bottoms.

        Here’s what I wrote today on Lansner’s Blog:

        “The facts are very simple, we cannot have a recovery in real estate until the economic circumstances are ripe for one. We are still trying to get people to overpay for real estate with artificially low mortgage rates, that are backstopped with govt guarantees. The govt is borrowing more than 10% of the annual gross domestic product to keep this Ponzi scheme rolling. All this is completely unsustainable, and being run by irresponsible liars in the govt … and it will ultimately end with another (BIGGER) step down with our entire economy.”

        I stick by those words.

        BTW, I will not be at the block party because unlike Irvine Renter, I will not disclose my identity because of my business. I am self employed, and I simply will not risk losing business due to my writings in the real estate blogosphere.

        I can tell you this about me:

        1) My real name is not lee.
        2) I do own real estate … probably more than most of the real estate bulls that post in here and other real estate blogs.
        3) I am not a bitter renter, as my housing situation is based on choice, not financial circumstances.

  6. NOT

    Why would anyone buy this thing? Would it make a great rental? There are plenty of places in that same price range (just a few years older) available without the steps?

  7. norcal

    These shoeboxes are awful – all stairs, no living space, tiny square footage in bedrooms.

    Last July new ones in Palo Alto were asking and getting $700K. Advertised as good family living in a good school district – can you imagine chasing your toddlers up and down all those damn stairs?Yuck.

    The Palo Alto models had no yards, either. No excuse for these POSs. But they sell.

  8. chuckconners

    Crap like this is built to feed the buying frenzy. Orange County is out of land, so i’m told.Better act fast,this one won’t last.

  9. anecdote of a bad job market

    I’ve just become one of those people who are part timers or partialy-employed (but want to work full time). Now I must become less ambitious, and with my large down payment, maybe I can afford to buy a condo somewhere else in the OC as I can no longer afford Irvine! But only when the time “feels” right.

Comments are closed.