Would you spend your fire insurance settlement to fix an underwater house?
When you take out a loan, the lender makes the borrower carry homeowners insurance including protection against loss from a fire. According to the description, today's featured property was damaged by fire and only partially reconstructed.
I am not an expert on fire insurance claims, but if it is like other forms of insurance, the claim is paid to the policy owner -- the underwater loan owner. If you were hundreds of thousands of dollars underwater, and if your house burned to the ground and you received an insurance claim, would you repay the bank or bother to rebuild? After a fire seems like a good time to quit paying the mortgage.
This property was purchased for $489,000 on 11/25/2003. The owner used a $391,200 first mortgage, a $97,200 second mortgage, and a $0 down payment. I don't see many of the 100% financing deals anymore. I think most of those loan owners walked in 2007 and 2008.
On 1/4/2005 the loan owner felt the house needed to give him some free spending money, so he refinanced the first mortgage for $495,500 and obtained $6,500.
The kool aid must have tasted good because he obtained a $125,000 HELOC on 2/9/2005.
On 8/30/2005 he refinanced with a $544,000 first mortgage and a $136,000 stand-alone second.
Total property debt was $680,000.
Total mortgage equity withdrawal is $191,000. Not a bad take for two years of ownership and no money down.
He quit paying in late 2009, and the foreclosure went quickly.
Foreclosure Record Recording Date: 06/10/2010 Document Type: Notice of Sale
Foreclosure Record Recording Date: 03/09/2010 Document Type: Notice of Default
The lender hoped someone would take this headache off their hands, so they only bid $382,757 at auction. There we no takers. US Bank National Association is now the proud owner of this shell of a house.
Home Purchase Price … $382,757 Home Purchase Date .... 6/8/2010
Net Gain (Loss) .......... $(54,697) Percent Change .......... -14.3% Annual Appreciation … -18.3%
Cost of Ownership ------------------------------------------------- $349,000 .......... Asking Price $12,215 .......... 3.5% Down FHA Financing 4.55% ............... Mortgage Interest Rate $336,785 .......... 30-Year Mortgage $68,608 .......... Income Requirement
$1,716 .......... Monthly Mortgage Payment
$302 .......... Property Tax $0 .......... Special Taxes and Levies (Mello Roos) $58 .......... Homeowners Insurance $187 .......... Homeowners Association Fees ============================================ $2,264 .......... Monthly Cash Outlays
-$276 .......... Tax Savings (% of Interest and Property Tax) -$439 .......... Equity Hidden in Payment $21 .......... Lost Income to Down Payment (net of taxes) $44 .......... Maintenance and Replacement Reserves ============================================ $1,613 .......... Monthly Cost of Ownership
Cash Acquisition Demands ------------------------------------------------------------------------------ $3,490 .......... Furnishing and Move In @1% $3,490 .......... Closing Costs @1% $3,368 ............ Interest Points @1% of Loan $12,215 .......... Down Payment ============================================ $22,563 .......... Total Cash Costs $24,700 ............ Emergency Cash Reserves ============================================ $47,263 .......... Total Savings Needed
Property Details for 4072 LOMA St Irvine, CA 92604 ------------------------------------------------------------------------------ Beds: : 3 Baths: : 2 Sq. Ft.: : 1448 $0,241 Lot Size: : 5,467 Sq. Ft. Property Type:: Residential, Single Family Style:: One Level, Other Year Built: : 1972 Community: : El Camino Real County: : Orange MLS#: : P760231 On Redfin: : 2 days ------------------------------------------------------------------------------ PARTIALLY BURNED OUT HOME. .. BEING SOLD IN AS-IS CONDITION. OPPORTUNITY FOR CONTRACTOR TO ADD VALUE.
.jpg)
0 comments:
Post a Comment