Squatting Laguna Beach Style

Squatting is usually a problem we associate with the indigent; however, many pretenders are hold up in opulent properties. Today we look at one such property in Laguna Beach, California.

Irvine Home Address … 150 Cress St Laguna Beach, CA 92651

Resale Home Price …… $5,990,000


Love, Love, Love

Love, American Style,

Truer than the Red, White and Blue.

Love, American Style,

That's me and you.

And on a star spangled night my love, (My love come to me).

You can rest you head on my shoulder.

Out by the dawn's early light, my love

I will defend your right to try.

Love, American Style,

That's me and you.

Charles Fox & Arnold Margolin — Love, American Style

I hear that jingle in my head whenever I profile the lifestyles of the pretending-to-be rich and famous. We Americans have a unique style, and Californians and their debt pathologies are fascinating. Last weekend we looked at Squatting Newport Coast Style, and today will drive down the coast a few miles and look at a beautiful ocean-view property in the heart of the action.

I love this property. If I thought I could squat there for a year and a half, I would do it. It is an oversized lot in a prime location. Have you ever been to K'ya? If you are standing on the rooftop deck, you are looking down on this property.

The property boasts unobstructed ocean views:

It has a great office for writing blog posts:

The master bedroom is beautiful, and even the crappers are nice:

You don't need the K'ya party deck when you have your own:

Delusional to the end

You can buy this property for a little over double what the owner paid in 2005. Did prices double since 2005? Can prices really go from $750,000 to $5,990,000 in 14 years?

I am astonished that people come to believe this is possible. This guy should be hiding his face in shame.

I can imagine the conversations between this freeloader and the lender:

Freeloader: "I will pay you as soon as I sell the property. The market is a bit soft right now, as you know."

Lender: "Our comps show this property would resale for about $2,500,000. Isn't your $5,990,000 asking price unrealistic?"

Freeloader: "Laguna Beach is different. Prices only go up here. Look how much it went up between 1997 and 2005."

Lender: "That was a housing bubble, and you are the bagholder. Your loans are recourse, and we will go after your assets if you don't pay us back."

Freeloader: "Give me some time and prices will recover."

Lender: "How much time do you need?"

Freeloader: "As long as it takes for prices to come back. Besides, if you foreclose now, I am insolvent, and it would be your fault. When I filled out the loan documents, I stated my income based on anticipated home-price appreciation. You are removing my income."

Lender: "Appreciation is not income. Besides, we can foreclose and make that income. We want your wage income."

Freeloader: "That was never part of the deal."

Property History for 150 Cress St

Date Event Price Appreciation
Nov 13, 2009 Listed $5,990,000
Jun 02, 2005 Sold (Public Records) $2,900,000 14.9%/yr
Oct 22, 1999 Sold (Public Records) $1,333,000 36.3%/yr
Dec 12, 1997 Sold (Public Records) $750,000

HELOC abuse

As you may have guessed, even with the near-peak purchase, this owner still managed to milk a few hundred thousand dollars out of the property before he resorted to squatting.

  • The property was purchased on 6/2/2005 for $2,900,000. The owner used a $1,885,000 first mortgage, a $145,000 HELOC, and a $870,000 down payment.
  • On 6/15/2006 he opened a HELOC for $910,743.
  • On 8/28/2006 he refinanced with a $2,870,000 Option ARM courtesy of Washington Mutual.
  • On 9/27/2006 WAMU gave him a $500,000 HELOC.
  • Total property debt is $3,370,000.
  • Total mortgage equity withdrawal is $1,340,000 including his substantial down payment.
  • He still extracted $470,000 of the bank's money.

When Chase bought WAMU, their losses on the WAMU portfolio were subject to a backstop agreement. If the losses are large enough on the portfolio, the US taxpayer — you — will pick up the tab.

If you knew you were paying for it, you might have stopped in and had a drink on yourself rather than go to K'ya and pay for it. That is for the little people.


If it isn't bad enough that this guy walked away with hundreds of thousands of dollars in money you will end up paying for, he is still there! He has been squatting without a payment since late 2008!

Foreclosure Record

Recording Date: 08/03/2009

Document Type: Notice of Sale (aka Notice of Trustee's Sale)

Foreclosure Record

Recording Date: 04/30/2009

Document Type: Notice of Default

He may have paid through January of 2009, but with has slow as lenders are to foreclose, what makes you think they were timely when filing their NOD?

This owner has been squatting for well over a year, and the dance continues. The sale is scheduled for May 7. Will they postpone again to dance more? If so, you should be invited to the party; you are paying for it.

What do we usually associate with squatting?

Most squatters don't do quite as well as our Laguna Beach squatter.

Historically, squatting has been looked down upon, and squatters do not live in relative luxury.

Only in America would we permit squatters to live in luxury beachfront mansions.

Irvine Home Address … 150 Cress St Laguna Beach, CA 92651

Resale Home Price … $5,990,000

Home Purchase Price … $2,900,000

Home Purchase Date …. 6/2/2005

Net Gain (Loss) ………. $2,730,600

Percent Change ………. 106.6%

Annual Appreciation … 14.8%

Cost of Ownership


$5,990,000 ………. Asking Price

$1,198,000 ………. 20% Down Conventional

5.11% …………… Mortgage Interest Rate

$4,792,000 ………. 30-Year Mortgage

$1,255,867 ………. Income Requirement

$26,048 ………. Monthly Mortgage Payment

$5191 ………. Property Tax

$0 ………. Special Taxes and Levies (Mello Roos)

$499 ………. Homeowners Insurance

$0 ………. Homeowners Association Fees


$31,738 ………. Monthly Cash Outlays

-$2646 ………. Tax Savings (% of Interest and Property Tax)

-$5642 ………. Equity Hidden in Payment

$2403 ………. Lost Income to Down Payment (net of taxes)

$749 ………. Maintenance and Replacement Reserves


$26,602 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$59,900 ………. Furnishing and Move In @1%

$59,900 ………. Closing Costs @1%

$47,920 ………… Interest Points @1% of Loan

$1,198,000 ………. Down Payment


$1,365,720 ………. Total Cash Costs

$407,700 ………… Emergency Cash Reserves


$1,773,420 ………. Total Savings Needed

Property Details for 150 Cress St Laguna Beach, CA 92651


Beds:: 8

Baths:: 0006

Sq. Ft.:: 3300


Lot Size:: 7,200 Acres

Year Built:: 2007

Days on Market: 106

MLS#:: 20932446

Property Type:: Residential, Detached, Single Family

Community: Laguna Beach


Dazzling, best in class, posh family compound consisting of 3 villas nestled on prime, oceanfront location in world-famous Laguna Beach. Luxuriously appointed, featuring exotic and imported fixtures, marble, granite & rich woods. High-tech touches include individual HVAC systems, high-speed internet & flat screen tv's. Each kitchen is designed for gourmet cooking. Outdoor spaces include 4 fire pits, terraces & a bar/dining counter.

I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since 2006.

Have a great weekend,

Irvine Renter

49 thoughts on “Squatting Laguna Beach Style

  1. Freetrader

    Lender: “How much time do you need?”

    Freeloader: “As long as it takes for prices to come back. Besides, if you foreclose now, I am insolvent, and it would be your fault. When I filled out the loan documents, I stated my income based on anticipated home-price appreciation. You are removing my income.”

    “You are removing my income.” Classic. I can almost hear the sad sacks of yesterday’s post (and many others) using that kind of logic. “We had a perfect retirement plan; have the bank buy properties for us and live off the appreciation. But then, due to no fault of our own, it all went horribly wrong. Damn those banks!”

  2. AZDavidPhx



    U.S Underemployment Rises To 16.9

    Revised to:

    Employers Added Most Jobs in 3 Years in March, Jobless Rate Holds at 9.7 Percent


    WASHINGTON — The nation’s economy created the largest number of jobs last month since the recession began, while the unemployment rate remained at 9.7 percent for the third straight month.

    The Labor Department said employers added 162,000 jobs in March, the most in three years but below analysts’ expectations of 190,000. The total includes 48,000 temporary workers hired for the U.S. Census, also fewer than many economists forecast.

    Private employers added 123,000 jobs, the most since May 2007.

    Still, more Americans said they were working part-time even though they preferred full-time work.

    When they and discouraged workers who have given up searching for jobs are included, the “underemployment” rate ticked up to 16.9 percent from 16.8 percent.

    1. AZDavidPhx

      So the obvious questions (that nooooboody seems to ask ) are:

      Which of these “private employers” add the most jobs? Walmart? Long John Silvers? Bank of America? Goldman Sachs?

      What was the average pay of these new 162,000 jobs? 10 bucks an hour? 50K a year? 100K a year?

      Which state added the most jobs? Bubble states with still overpriced housing? CA, AZ, FL?

      I think it is safe to conclude that this is an example of smoke and mirrors. The Government cooks up a number that sounds good and the media reports the spinned version as good NEWS.

      1. Art Student in Atlanta

        Are those private employers or is it the census department? I know there is a hiring boom from the census employees.

      2. Geotpf

        These numbers are not gamed. There are what they are-and they aren’t particularily good. And, didn’t you just say 48,000 of the 162,000 were census workers, leaving 114,000 as being non-census workers?

        1. Art Student in Atlanta

          Sorry, You are right, I missed that line. The article AZ David sited spelled that out, I should have read it more thoroughly.

        2. AZDavidPhx

          Exactly Geotpf. Where did the majority of jobs come from?

          I made the original post and then followed it up with my questions that asked just what kinds of jobs were added? You would have to agree that a new position for an Olive Garden server is not going to have the same economic punch as a new position being added for a 100K mortgage hustler lost in the downturn.

          I noticed that you casually elected to ignore that entire point when making your head-in-the-sand response. I like how you say the numbers “are what they are”. You sound like an Arthur Andersen employee.

          The real NEWS story in this is the underemployment number. If we are expected to believe that all these great jobs are returning to the economy then why did the underemployment number rise?

          The headline that the article runs with makes the same fallacy as when realtors cite increasing sales while prices are falling.

          If the media wants to run a headline about jobs increases then it seems reasonable to expect them to identify the sectors that added jobs. Rather than just lump them into Census Hiring and Other.

          1. avobserver

            “I think it is safe to conclude that this is an example of smoke and mirrors. The Government cooks up a number that sounds good and the media reports the spinned version as good NEWS.”

            The ironic part is that “good” news like today’s unemployment report will put more pressure on Fed to start raising rates and hastening the process of unwinding QE. A couple of more fake good news (terrible numbers dressed up and sold by media in a positive spin) we may actually have a realistic chance of seeing the end of zero interest before the year ends. Right after the release of today’s report USD shot up beautifully and Treasury yield reached 17-month high.

            In our banana republic economy the good news spell the impending doom for the markets (equity, bond, housing, energy…) as it is more likely to force the hands of our gov’t and Fed to remove some of the props in near future. Bad news (imagine if today’s report showed unemployment rate jumped up to 11%) are a boon to the markets as we can expect another round of even bigger stimulus on the way. It should be patently clear to everyone by now that the performance of housing and stock markets in today’s world have little to do with fundamental factors of economy. House or stock prices nowadays are more positively correlated to Fed’s willingness to inject ever larger amount of liquidity into system at 0% rate and magnitude of gov’t stimulus/bailout programs.

            I hope we will continue to see a slew of “good” news coming out in the next couple of months. I wish all the media channels would report happy consumers flooding shopping malls again with the level of exuberance exceeding that of 2005. That way we may actually get our wish of seeing less Fed/gov’t meddling later this year.

          2. alles_klar

            Great comment, avobserver! I’ve been telling my fellow housing bear friends (said another way, my friends that want to buy a home at a reasonable price) that I hope we get a string of decent economic news so all these housing bail out programs get cancelled. Every time hear news that the “housing stabilization” (i.e. re-inflation) is stalling, I cringe, knowing some misguided, taxpayer-funded bailout will soon follow.

          3. NOT

            I heard a clue on the radio about where those other numbers came from: Due to the bad weather, many folks didn’t work, and as they came back to work, it was counted within these numbers as a new job.

          4. avobserver

            Exactly. I think more “good” news will be on the way for two simple reasons:

            1. Media are in a frantic mode spinning economic news and stats ahead of Nov election. Most of economists, with their typical herding mentality, have already jumped on the robust V-shaped recovery bandwagon. So no matter what happens in the next 8 months the sanguine view of the economy will dominate the mainstream channels.

            2. All the fiscal and monetary stimuli are bound to have some effect on the economy. Heck, with that amount of stimulant they have put in over the last 2 years you could probably get a mummy out of its tomb and jog for a couple of miles. The only thing shocking is how little these “unprecedented” measures have to show for thus far. But hey – the dead man does seem to be walking.

            Let’s get this straight – the service sector is expanding, manufacturing activities have improved for 8 straight months, GDP grew for two quarters, housing market has “stabilized”, and economy finally started to add jobs!!! So Mr. Bernanke, explain to me again why is the rate still at 0%??

    2. Geotpf

      If one is only assigned 39 hours of work (like at a place that has a corporate policy to deny benefits to non-full time staff), but one is willing to work 40 hours, one would qualify for your “underemployment” figure, but one is definitely not unemployed. This is fairly common in retail/fast food/factories/warehouses.

      I prefer the topline number, which, of course, is still terrible.

      1. AZDavidPhx

        Oh I get it – so all those underemployed people are just working 39 hours a week instead of 40.

        That explains why so many of them would rather be full time than part time because an extra hour’s pay will make the mortgage payment.

        Keep wanking yourself over there, genius.

      2. mikeD

        I challenge you to site one case….just one single case in which a person is working 39 hrs.

        1. Geotpf

          Here’s one older case:


          Usually it’s a lot more informal than that. A lot of time a worker in a rotating shift-based industry (retail for instance) gets assigned rotating shifts that never quite make 40 hours a week, so they don’t get classified as full time. It might be 39 hours one week and 34 the next or something. This is an internal corporate thing; there’s no law that says that 40 hours a week is some magic number triggering benefits or whatever.

          But the same rule applies to somebody who works 30 hours a week, say. There are a fair number of jobs that have six hour shifts, five days a week. That person, if willing to take a standard eight hour job, would be counted in the broader unemployment figure as “underemployed”. Also, how big the hourly is salary doesn’t matter here.

          1. NOT

            1) California Labor Code Section 515 (c): “For the purposes of this section, “full-time employment” means employment in which an employee is employed for 40 hours per week.”

            2) August 19, 1991, really? Nothing more current perhaps? Maybe something from California perhaps (See article…It’s from Baltimore)?

            I think what I am hearing is that you believe that most people are “underemployed” by about 1 – 5 hrs a week, so it isn’t a biggie. Is that a correct reading of your statements above?

          2. muzie


            Just look at every other comment around here. I’m bearish on housing, but every single one of these comments is focused on finding everything single speckle of bullshit in the jobs number. That’s not being bearish, that’s been blinded by prejudice and paranoia.

            I think Geotpf is merely bringing our attention to some potential positive skew amidst all the negative skew to give a more balanced view.

            I welcome all useful points of data, either positive or negative. Geotpf’s one data point is one among many.

            I don’t quite understand all the nerd rage over the job numbers. It’s one thing to deal with the NAR’s bullshit housing spin – “feel good” employment numbers look pretty inoffensive to me in comparison. The government isn’t “selling” jobs at inflated prices – just houses.

      3. Not common

        No, it’s not common to reduce a worker’s weekly schedule by one hour to deny him/her benefits. I believe that would be against the Fair Labor Standards Act or at least the spirit of FLSA. I’m one worker (white collar at that) who recently became underemployed involuntarily (by about 45% to 50% underemployment) but I still do not show up in the statistics because I do not claim unemployment (my reduced income is still above unemployment benefits but barely). I think everyone is trying to show optimism because of the placebo effect that might have, and that’s ok but I think we’re far from recovery still.

  3. Geotpf

    The realtor is certainly putting out all the stops to sell this property:

    “This home is also listed on MLSListings, on SoCalMLS as #S596077, on SoCalMLS as #S596081, on SANDICOR, and on San Francisco MLS.”

    San Francisco MLS? Really? Why not list it on the Iowa MLS as well?

    As for the “7,200 acres” (instead of sq ft) mistake, it looks like that is actually wrong on the tax records! Under “Public Facts for 150 Cress St”, it says “Lot Size: 313,632,000”, which is 7,200 acres.

  4. Yummyhatorade

    Hatred has made you blind…literally.  Your own notes say this was built in 2007.  You could have found that out, but your arrogance wouldn’t allow it. There won’t be any loss on to any banks for “you” to make up.  And just so you know:  these homes are vacant.  Not only won’t you find any personal items (including shampoo) in any of the photos, but these cottages are available for rent http://www.bestlagunavacations.com/beachvillas2.   Don’t
    say you didn’t deserve it when you finally get your face punched in by one of these people.

    1. Planet Reality

      What do you expect?

      A Bank of America employee wearing a tie gave him a quatrain surreptitiously presenting the end of the world in 2012.

      When the holocaust begins this will sell below rental parity.

      1. wheresthebeef

        Nice, we have the two village idiots talking to each other.

        So why fuck are these placing in foreclosure then? Are they having trouble making ends meet by “renting them out?”

        1. Planet Reality

          Let me dumb it down for you.

          The house that sold in 2005 is a completley different house than the house show cased in today’s post.

          1. wheresthebeef

            OK smart guy, here is another question for you since you are a realtor and in the know.

            Did Mr. RE Maven spend all his money on construction and then couldn’t pay the mortgage anymore? So answer my question…why is this place in foreclosure?

          2. Eat that!

            Is it 100% different? Is the difference worth $3M more? I doubt it. Keep dreaming that this will sell. I would be willing to bet that the very rich buyer is going to looking for a lot more than this for the $6M that they have to spend. But feel free in your delusion.

          3. AZDavidPhx

            How different it is does not matter. What matters is that someone came in and re-arranged some chairs, painted a wall, put in some pergraniteel, etc so a realtor somewhere can call it “upgraded” and thus justify any WTF price the seller wants.

            It’s all about bamboozling the public with buzzwords , hiding information from them so they cannot make an informed decision, and rushing them into signing by feigning multiple bids.

            A classic hustle.

          4. Planet Reality

            The most delusional part is that you all have decided to care about whether this sales for $4.5M or $6M.

            Az they “re-arranged” the square footage

          5. AZDavidPhx


            Maybe I prefer a larger yard.

            Why does adding some square feet of shelter entitle the seller to a WTF price?

            Did the square feet add to the land? No.

            Did the square feet make the location any more desirable? No.


          6. matt138

            Let’s see:

            at $600/sqft build cost, an extra $3M will build you 5,000 sqft. Yes sir this price is delusional.

    2. taxpayer

      So in addition to defrauding banks and taxpayers by lying on mortgage applications these wanna-be real estate tycoons are now going to resort to battery? Too much. Somebody is going to get punched in the face but it is going to be them and it is going to happen when a person who lives off of their INCOME (you should try it sometime) has had just about enough of the whining from self-entitled #$@holes like you. People like this need to be prosecuted and bankrupted … every crime needs a price.

    3. IrvineRenter

      “Don’t say you didn’t deserve it when you finally get your face punched in by one of these people.”

      You have finally made your last post on the IHB. I have tried ignoring you for weeks, but as your name suggests, you only exist to spread kool-aid laced hatred.

      I do not need to put up with your comments, particularly when they suggest violence against me personally. There is no freedom of speech here other than what I allow. I am a tolerant guy, but you have crossed the line, and now you are gone.

      1. IrvineRenter

        Just so everyone knows. Yummyhatorade posts from a rotating IP address, so I will be manually deleting any of her posts in the future. If you have replied to one of her posts, yours will be deleted as well. It isn’t me deleting you, it is the system. It takes out the entire thread.

    4. Marc

      Don’t you realize that the only one who is hating is you? I can understand that life as a RE agent sucks. And you are frustrated that the golden days when every monkey could get a 6% cut on this Orange County real estate insanity are over. But please keep your frustration for yourself. The readers of this blog are an educated and positive (considering falling prices are positive for someone who wants to buy) bunch, and you don’t fit into that pattern. It is really unfortunate that you confirm the negative stereotypes most people have of RE agents, I pitty the people who have to work with you.

  5. newbie2008

    The cash withdraw doesn’t look that bad for this “home owner”
    Non-payment while renting/leasing this prime vacation spot will also be a plus for the owner. He can do some short-term renting on a furnished luxury beach house. May even get $12,000 per week for a couple of weeks out of the year and $8,000 for most of the weeks.

    The banks need not worry, since it’s on the taxpayers’ dime with the federal backstop on the loan.

  6. tonyE

    8 bedrooms.
    6 bathrooms.
    3300 sq feet.
    Family Compound.
    No privacy from Hotel behind.
    Next to beach access stairs.

    OK, this is not a compound… it’s a frickin’ Bed And Breakfast business site.

    If I owned this place, I’d rent it out as a Five Star Bed and Breakfast By the Beach (BBBBLB).

    Then I’d put a Churros, Cold Beer and Chicklets (CCbC) stand by the beach steps and sell to the tourists and beachgoers.

    5MIL… but of course, this is a business not a house.

  7. Soylent Green Is People

    Having grown up in Laguna, I know why this Cress Street compound is listed in the San Francisco MLS. The beach area between Cress and Mountain streets are faaaaabulouuuus. Have been since the 1970’s.

    The property would make for a great B+B but it will never cash flow.

    My .02c

    Soylent Green Is People.

  8. minou270

    Three villas on the compound. I’m impressed. 🙂 Whenever I hear the word “compound” associated with homes, I inevitably think of Jonestown – I guess that’s fitting.

    1. newbie2008

      I could hardly contain my laughter with your comment. Compound and Jonestown.

      As for allowing or giving cities money to buy abandand property, why buy? Just take them via condemation procedures unless their trying to give the banksters a little bit more money.

  9. NOT

    The federal government announced Friday that it is relaxing some rules to make it easier for communities to spend funds on redeveloping abandoned and foreclosed properties.

    The changes, effective immediately, will allow cities, counties and states to buy properties in mortgage default and uninhabitable homes with lingering code violations through the $4 billion Neighborhood Stabilization Program.

    The program was started in the midst of the nation’s foreclosure crisis, but a year later about a third of more than 300 local governments that got grants have barely made a dent in them, according to a recent report from the U.S. Department of Housing and Urban Development.

    Some city, state and county officials say they have had trouble spending the grant money because federal rules are confusing and cash investors have often outbid them for residential properties.

    Did I read this wrong? Cash investors want to buy this property but city can now outbid them using federal funds? Why would any city want to do that?

  10. Steve

    Nice try but the lenders had the income. Stated income loans had guidelines. If the income was too difficult for the loan originator to prove they were to use a “Global Salary Calculator” using the average income. Not place people in the highest possible income.
    Granted there were some borrowers that played the system but for the most part these incomes were changed and increased behind the borrowers back. You don’t have that signed copy of income and if you call the Title/Escrow offices you’ll discover pages are missing. You can’t take sides anymore placing blame on the dead beat borrower. And a loan can not be enforced and approved simply by a borrowers signature. Anyone who puts so much effort stating the self-employed borrower spent two years lying to the IRS falsifing their income just so they can go out and buy a home they could never afford has to be desperate to hiding their own crimes. The fraud is in the numbers and the truths will come out. GREED!

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