Our popular tour to surrounding communities in search of HELOC abuse continues in Huntington Beach. So far we have seen $3,367,500 HELOC Abuse from Hollywood, $5,000,000 HELOC abuse from Laguna Beach, $7,000,000 HELOC abuse in Newport Coast and 18 different properties in Huntington Beach. Today we will examine the sleepy beach community of San Clemente.

Asking Price: $798,000

Address: 121 W Avenida San Antonio San Clemente, CA 92672

Don't Worry Baby — The Beach Boys

Well its been building up inside of me

Somethings bound to go wrong

When you see all these people who took out so much money that they lost their homes, you have to wonder if there was a little voice inside quietly warning them things might turn out badly. It did.

I like San Clemente. In fact, if I do not end up buying in Irvine, I will buy in San Clemente. It is a beach town with a laid-back atmosphere. It is more relaxing than Irvine, although not as convenient. After the crash, you will get more for you money there. There is a great deal of toxic financing in San Clemente because there were many homes built there during the bubble in Forster Ranch, Marblehead, and Talega. Based on the toxic loans and the HELOC abuse I found there among long-term homeowners, I can safely say that San Clemente's housing market is going to get flattened.

When I look at the market in San Clemente, I am struck by the number of short sales. As a percentage of listings, it is much higher than the other cities I have looked at. When I last looked at the San Clemente market a few months ago, there were not this many short sales.

There are three types of listings in San Clemente: (1) short sales where the buyers bought in 2004 or later and paid too much, (2) short sales where the buyers bought before 2004 and abused their HELOCs and now they are underwater, and (3) the high-end WTF listing prices from people who do not yet realize they are underwater. My observation is that HELOC abusers are as common as late buyers in San Clemente. That is a much larger percentage than I have found in other communities.

There is HELOC abuse in the group of late buyers, but these people did not own long enough to do any real damage. There is HELOC abuse in the high-end WTF listings, but since they are not short sales, they are a bit harder to find. The HELOC abusers who bought before 2004 are the list below:

224 Via Alegre San Clemente, CA 92672 Price: $635,000, Paid $620,000, Debt $750,000

16 VIA PAQUETE San Clemente, CA 92673 Price: $790,000, Paid $717,000, Debt $845,000

505 Via El Risco San Clemente, CA 92673 Price: $949,000, Paid $693,000, Debt $1,230,350

201 Camino San Clemente San Clemente, CA 92672 Price: $365,000, Paid $235,000, Debt $350,000

2806 Bello Panorama San Clemente, CA 92673 Price: $495,000, Paid $370,000, Debt $654,300

9 Calle Merecida San Clemente, CA 92673 Price: $549,000, Paid $478,000, Debt 780,901

94 Via Onda San Clemente, CA 92673 Price: $674,900, Paid $485,000, Debt $920,000

1617 Vista Luna San Clemente, CA 92673 Price: $700,000, Paid $636,000, Debt $875,000

120 Avenida Algodon San Clemente, CA 92672 Price: $485,000, Paid $189,000, Debt $730,000

1002 Avenida De La Estrella San Clemente, CA 92672 Price: $633,650, Paid $575,500, Debt $1,035,000

239 Calle Neblina San Clemente, CA 92672 Price: $675,000, Paid $237,000, Debt $1,078,250

307 Calle Sonora San Clemente, CA 92672 Price: $749,999, Paid $290,000, Debt $894,000

525 Calle Del Rito San Clemente, CA 92672 Price: $799,000, Paid $725,000, Debt $1,155,000

764 Calle Vallarta San Clemente, CA 92673 Price: $624,900, Paid $187,000, Debt $662,200

Assembling this partial list of HELOC abusers is not difficult. You could do it looking at Redfin. Look in your own city, and find properties purchased earlier than 2004 where the asking price is over the purchase price, but the property is listed as a short sale. There is only one way an owner can make a profit on the sale and owe more to the bank than the sales proceeds–HELOC abuse.

{book4}

Although high-end HELOC abuse is a bit harder to find because they are not listed as short sales, it is still quite common. Here is a sampling of high end HELOC abusers:

4027 Calle Lisa San Clemente, CA 92672 Price: $2,695,000

Recording Date:

09/01/1993

Sales Price:

$640,000

Loan Amount:	$512,000

Recording Date:

08/29/1997

Loan Amount:

$547,000

Recording Date:

12/27/2001

Loan Amount:

$400,050 Paid down the mortgage

Recording Date:

12/30/2002

Loan Amount:

$600,000

Recording Date:

12/11/2007

Loan Amount:

$1,900,000 Option ARM

That one has $1,260,000 in mortgage equity withdrawal. It isn't a pattern of small refinances you see on most, but it is a huge amount of MEW.

314 S La Esperanza San Clemente, CA 92672: Price: $1,650,000

Recording Date:

11/07/1996

Sales Price:

$317,000

Loan Amount:	$370,000

Recording Date:11/04/1999 Loan Amount $375,000

Recording Date:

12/08/1999

Loan Amount:

$100,000 This was a HELOC

Recording Date:08/28/2002 Loan Amount $550,000 Refinance of first

Recording Date:

01/06/2004

Loan Amount:

$300,000 This was a HELOC

Recording Date:

03/13/2006

Loan Amount:

$850,000 Refinance of first. Notice it was the sum of the previous two loans

Recording Date:

05/11/2006

Loan Amount:

$350,000 New HELOC

Recording Date:

01/30/2008

Loan Amount:

$1,400,000

The original sales price is probably not correct. Even the records say the price is unconfirmed. Since there was a $370,000 first mortgage issued on the date of purchase, it is likely that the actual purchase price was greater than $370,000. There was no 100% financing back in 1996. You can see a steady increase in borrowing in increments from $100,000 to $350,000 up through January of 2008 when the borrower refinanced all the previous loans with a $1,400,000 first mortgage. This property had about $1,000,000 in mortgage equity withdrawal.

4015 Calle Isabella San Clemente, CA 92672: Price: $1,595,000

Recording Date:05/17/1994 Sales Price: $353,000 Loan Amount: $372,000 — I think the sales price is incorrect on Redfin

Recording Date:08/25/2000 Loan Amount: $565,500

Recording Date:

11/04/2003

Loan Amount:

$786,800

Recording Date:

02/17/2005

Loan Amount:

$150,000 This is a HELOC

This is more typical of what I see; the owner doubled their mortgage while they owned the property, but they will probably still sell for a profit. This total debt on this property is between $786,800 and $936,800 depending on how much HELOC money they extracted. Either way they took out over half a million dollars in mortgage equity withdrawal.

600 Calle Tibidabo San Clemente, CA 92672: Price: $1,295,000

Recording Date:

00/00/1989

Sales Price:

$605,000

Recording Date:

10/31/1997

Loan Amount:

$480,000

Recording Date:

10/31/1997

Loan Amount:

$30,000

Recording Date:

07/30/2001

Loan Amount:

$535,000

Recording Date:

04/02/2003

Loan Amount:

$650,000

Recording Date:

11/25/2003

Loan Amount:

$43,000 HELOC

Recording Date:

08/16/2006

Loan Amount:

$875,000 Option ARM

Recording Date:

05/07/2007

Loan Amount:

$100,000 HELOC

Recording Date:

12/28/2007

Loan Amount:

$10,000 Stand-alone second

This is the typical pattern of a HELOC abuser. Notice the numerous refinances and the steady increase in the mortgage balance. These people were making tens of thousands of dollars each year from owning their house. It was like having another breadwinner. The total debt on this property is now $985,000 which is just over double the mortgage debt they had in 1997.

Today's featured property is a long-term HELOC abuser. Starting in 1998 this guy extracted almost a million dollars over a 9 year period.

Asking Price: $798,000

Income Requirement: $199,500

Downpayment Needed: $159,600

Monthly Equity Burn: $6,650

Purchase Price: $310,000

Purchase Date: 5/1/1996

Address: 121 W Avenida San Antonio San Clemente, CA 92672

Beds:	3
Baths:	2
Sq. Ft.:	2,546
$/Sq. Ft.:	$313
Lot Size:	5,200 Sq. Ft.
Property Type:	Single Family Residence
Style:	Other
Stories:	2
View:	Ocean, Peek-A-Boo
Year Built:	1979
Community:	San Clemente Southwest
County:	Orange
MLS#:	S509071
Source:	SoCalMLS
Status:	Active
On Redfin:	585 days

Price reduced – need buyer now! Make all offers now subject to lender approval. Entertainers delight! Large Home in in the highly desirable Southwest San Clemente . Large deck and patio with a peak ocean view. Located on the Beach side of 5 freeway on a culdesac. Interior features include large master and living room with high ceilings.

The realtor is not kidding about the Beach side of the 5 freeway…

You can see the stages of grief in this listing price; denial, fear and capitulation.

Date	Event	Price
Oct 01, 2008	Relisted	—
Sep 23, 2008	Delisted	—
Jun 04, 2008	Price Changed	$798,000
May 07, 2008	Price Changed	$799,000
Apr 02, 2008	Price Changed	$995,000
Feb 01, 2008	Price Changed	$1,099,000
Nov 22, 2007	Price Changed	$1,199,000
Oct 13, 2007	Listed	$1,299,000

As you might have surmised, I picked this property to profile because the HELOC abuse was large, consistent and obvious. Any lender who cared would have noticed the Ponzi Scheme borrowing and cut this guy off years ago.

• This property was purchased on 5/1/1996 for $310,000. The owner used a $279,000 first mortgage and a $31,000 downpayment.
• On 12/3/1998 he refinanced with a $341,000 first mortgage taking out his downpayment plus $31,000. First taste of kool aid.
• On 9/29/1999 he refinanced with a $368,000 first mortgage.
• On 10/17/2000 he opened a HELOC for $30,000.
• On 8/2/2001 he opened a HELOC for $50,000.
• On 6/18/2002 he refinanced with a $495,000 first mortgage.
• On 3/25/2003 he opened a HELOC for $242,000.
• On 6/7/2005 he refinanced with a $750,000 Option ARM.
• On 11/29/2005 he opened a HELOC for $150,000.
• On 2/9/2007 he opened a HELOC for $250,000.
• On 6/26/2007 he refinanced with a $980,000 first mortgage.
• On 6/26/2007 he also opened a HELOC for $140,000.
• Total property debt is $1,120,000
• Total mortgage equity withdrawal is $841,000 including is tiny downpayment.

This is one of the worst cases I have seen, not for its amount, but for the obviousness of the abuse. Spare me the chronic illness or business investment excuses. We all know where this money went.

Imagine yourself living this lifestyle. Over the course of 9 years you had a piggy bank producing its own money. This house was throwing off about $90,000 a year in tax-free income. Whenever you needed a new car or wanted to take a vacation or throw a wild party on your rooftop deck with the ocean view, the house was there to provide for you.

Do you see why the lenders are losing so much money? It is easy to see how real estate became so desirable during the bubble. It is also easy to see why people cling to kool aid intoxication so strongly. Who wouldn't want to live that lifestyle? Too bad it is a Ponzi Scheme….

Our popular tour to surrounding communities in search of HELOC abuse continues in Huntington Beach. So far we have seen $3,367,500 HELOC Abuse from Hollywood, $5,000,000 HELOC abuse from Laguna Beach and $7,000,000 HELOC abuse in Newport Coast. This week instead of going for one big abuser, I want to give you a more complete picture of how common this problem is. The following post contains a partial list of homes for sale over $1,000,000 where the owners owe more than they paid.

Asking Price: $2,595,000

Address: 1120 Main Street, Huntington Beach, CA 92648

BTW, I have been quoted over at Huntington Homes concerning HELOC availability.

Ordinary Guys — Joe Walsh

And every Saturday we work in the yard
Pick up the dog do
Hope that it’s hard (whaf whaf)
Take out the garbage and clean out the garage
My friend’s got a Chrysler
I’ve got a Dodge
We’re just ordinary average guys
Ordinary average guys

HELOC abuse is not an extraordinary behavior limited to a few rogues; ordinary people were doing it. HELOC abuse has become the personal financial management technique of the masses (see Our HELOC Economy and California Personal Finance: Ponzi Style). A tiny condo in Irvine extracted $100,000, and one home in Newport Coast managed to extract $7,000,000. I have documented hundreds of cases in Irvine alone. It is so common that even our current president, Barack Obama, is a HELOC abuser:

In April 1999, they purchased a Chicago condo and obtained a mortgage for $159,250. In May 1999, they took out
a line of credit for $20,750. Then, in 2002, they refinanced the condo
with a $210,000 mortgage, which means they took out about $50,000 in
equity. Finally, in 2004, they took out another line of credit for
$100,000 on top of the mortgage.

Tax returns for 2004 reveal $14,395 in mortgage deductions. If we
assume an effective interest rate of 6%, then they owed about $240,000
on a home they purchased for about $159,250.

This means they spent perhaps $80,000 beyond their income from 1999 to 2004.

{book4}

This week the IHB was mentioned in Huntington Homes: Surf City home-equity ‘abuse’: ‘So many you can’t believe it’. Since I represented in that story the number of HELOC abuse cases is unbelievable, I thought I would show you what I found. The following list are homes currently for sale in Huntington Beach with listing prices over $1,000,000. Each of these properties has debt in excess of its purchase price. That means that the owners have taken out any downpayment they made plus some extra:

16711 Edgewater Ln Huntington Beach,
CA 92649: Paid $1,100,000, Debt $1,700,000

1111 Pine St Huntington Beach,
CA 92648: Paid $275,000, Debt $1,450,000 Option ARM

19616 Cloverwood Cir Huntington Beach,
CA 92648: Paid $1,006,500, Debt $2,000,000

17045 Edgewater Ln Huntington Beach,
CA 92649: Paid $1,000,000, Debt $1,259,000

19452 Beckonridge Ln Huntington Beach,
CA 92648: Paid $859,000, Debt $1,455,000

6601 Silent Harbor Dr Huntington Beach,
CA 92648: Paid $1,056,000, Debt $1,511,000

6576 Silent Harbor Dr Huntington Beach,
CA 92648: Paid $1,590,000, Debt $1,919,370

220 8th St Huntington Beach,
CA 92648: Paid $230,000, Debt $1,409,000

19622 Larchmont Cir Huntington Beach,
CA 92648: Paid $633,500, Debt $1,000,000

16915 Edgewater Ln Huntington Beach,
CA 92649: Paid $749,000, Debt $1,820,000

6431 Morningside Dr Huntington Beach,
CA 92648: Paid $875,000, Debt $1,260,000

19144 Redford Ln Huntington Beach,
CA 92648: Paid $777,500, Debt $1,150,000

6571 Beachview Dr Huntington Beach,
CA 92648: Paid $1,259,000, Debt $1,391,000

416 11th St Huntington Beach,
CA 92648: Paid $430,000, Debt $700,000

16361 Ardsley Cir Huntington Beach,
CA 92649: Paid $635,000, Debt $1,000,000

6592 Morning Tide Dr Huntington Beach,
CA 92648: Paid $530,000, Debt $804,000

5252 Chadwick Dr Huntington Beach,
CA 92649: Paid $720,000, Debt $931,500

205 20th St Huntington Beach,
CA 92648: Paid $415,000, Debt $750,000

3611 Rebel Cir Huntington Beach,
CA 92649: Paid $659,000, Debt $840,000

Check out this short sale at 43% off:

4751 Los Patos Ave Huntington Beach,
CA 92649: Paid $1,750,000, Asking $1,000,000

Remember, this list does not contain those people who bought late and are now short selling–and there are many of those. To be on this list, each owner must owe more than they paid, they must have shown a pattern of withdrawals and refinances, and the debt must be significant compared to the value of the house. It is apparent that the people living in houses asking over $1,000,000 in Huntington Beach were hitting the housing ATM quite often.

I am not the only one who noticed this phenomenon. A recent study from economists at the University of Chicago (via Calculated Risk), estimates “that the average homeowner extracts 25 to 30 cents for every dollar increase in home equity.” They go on, “Homeowners in high house price appreciation areas experience a relative decline in default rates from 2002 to 2006 as they borrow heavily against their home equity, but experience very high default rates from 2006 to 2008.” If you want emperical evidence of what these guys are saying, just take a look at the list above.

Asking Price: $2,595,000

Income Requirement: $648,750

Downpayment Needed: $519,000

Monthly Equity Burn: $21,625

Purchase Price: $950,000

Purchase Date: 12/17/2004

Address: 1120 Main Street, Huntington Beach, CA 92648

through
out? inclute?

So how did our featured property owners do it?

• The property was purchased for $950,000 on 12/17/2004. The owners used a $617,500 first mortgage and a $332,500 downpayment.
• On 2/4/2006 they got a construction loan for $1,935,000.
• On 5/14/2007 they refinanced with a $2,562,000 first mortgage.
• On 5/29/2007 they obtained a second mortgage for $350,000.
• Total property debt is $2,912,000.
• Total mortgage equity withdrawal $977,000 (final refinances minus the construction loan).

If this property sells for its current asking price, and if a 6% commission is paid, the total loss to the lender will be $472,700.

You have to figure that you and I as US taxpayers are going to eat that one. I imagine these owners enjoyed partying in their newly built house near the beach on your dime.

{book7}

And every Saturday we work in the yard
Pick up the dog do
Hope that it’s hard (whaf whaf)
Take out the garbage and clean out the garage
My friend’s got a Chrysler
I’ve got a Dodge
We’re just ordinary average guys
Ordinary average guys

Ordinary Guys — Joe Walsh

Our popular tour to surrounding communities in search of HELOC abuse has turned up a gem in Newport Coast. I admit, I cherry picked this one, but I suspected I could top the $3,367,500 HELOC Abuse from Hollywood and even the $5,000,000 HELOC abuse from Laguna Beach last week, and I was right.

Newport Coast sets the new HELOC Abuse record: $7,000,000. Congratulations Newport Coast!

Asking Price: $6,500,000

Address: 28 Shoreridge, Newport Coast, CA 92657

I’m Too Sexy — Right Said Fred

I’m too sexy for my shirt too sexy for my shirt
So sexy it hurts
And I’m too sexy for Milan too sexy for Milan
New York and Japan

Newport Coast is where all the beautiful people live. Newport Coast residents have big fancy homes, and they are so rich and sexy that the rest of us can only watch and be envious–at least that’s what many there believe. A number of very wealthy people do live there. As I looked through the property records, there were many properties owned with no debt. As a percentage of listings, it is higher than what I have seen in other places. Of course, with our highly leveraged society, that doesn’t take much. Unfortunately, like everywhere else in California, it has been invaded by the pretenders too.

Today’s featured property started with no debt, but from 2001 through
2006 the debt went from zero to $7,000,000 in that telltale sign of slow
accumulation through persistent HELOC abuse.

It must be nice to make a million dollars a year off your house. You get to live in a beautiful mansion, you don’t have to do anything, and the house gives you a million dollars a year to spend. Who wouldn’t want that? (Remember The California Social Contract?)

Ponder that lifestyle for a moment…

If you could just get in to a house like that, you get a beautiful home and practically unlimited spending money…

I could see where that would be a very desirable set of circumstances. Do you think they can reinflate the housing bubble after I get one of these houses?

With houses being so desirable, it is no wonder prices went up a great deal, and despite the falling prices all around, the kool aid is still freely flowing, particularly in these high end neighborhoods. They are simply refusing to let the party end; too bad the lenders are not longer helping them out.

Back in the day, the bulls used to claim “it is different this time.” In some ways, it is. What really makes this recession different is the debt levels of Americans. This recession was caused by debt and the collapse of debt structures. This recession will continue until this excess debt is flushed from the system. There are no short cuts.

In past recessions people would borrow from credit cards or other sources and maintaining their lifestyles until the economy picked up and they could either pay off some debt or be issued more credit. That is not working this time because we already have too much debt. The credit card companies already see this coming, and many of them are cutting back on credit lines because they know unemployed borrowers will max out their credit lines before going under. Lenders know debt is the problem, and more debt is not going to bridge the divide. According to our own government, even the lenders need to raise money, and they cannot borrow to do it.

All the pretenders who have been living off their homes are awaiting the re-inflation of the housing bubble. Rising home prices and the resultant HELOC income is the only way their lifestyles can be maintained. This is not going to happen. We hit the ultimate limit of our ability to borrow as a society. We are going to be forced to live within our means, after an enormous amount of painful debt restructuring.

When I look around these neighborhoods of hopelessly overextended HELOC dependent homeowners, I keep coming to the same conclusion; there must be a massive purging of personal debt. We are already seeing this in Riverside County. Entire neighborhoods of homes are turning over, and household debts are being cut in half. It is a painful process characterized by waves of foreclosures and personal bankruptcies, but it is a necessary one. The people in Orange County, and in particular in the beach communities, are in complete denial that this same purging must happen in their neighborhoods. It must, and it will.

Think about it. These people have more debt than they can afford. This problem requires someone who can afford these debt levels to buy them out and pay off their debts. That is the Ponzi Scheme. But what happens when there are not enough people making the incomes necessary to take out the previous debt? Someone is going to be left with debts they cannot afford and nobody to bail them out. The music stops and they don’t have a chair. Right now in Newport Coast, there are hundreds of homeowners dancing and very few chairs.

Asking Price: $6,500,000

Income Requirement: $1,625,000

Downpayment Needed: $1,300,000

Monthly Equity Burn: $54,166

Purchase Price: $1,341,000

Purchase Date: 4/18/2001

Address: 28 Shoreridge, Newport Coast, CA 92657

Judging by the description, even the agent doesn’t give a crap. What chance do you see of this selling?

Unfortunately, a nicer house next door on Shoreridge went into escrow based on a $4.5 million asking price, and 50 Shoreridge (which may have a peek ocean view) sold in January for $4.9 million. A couple of chairs were filled, and this owner is still dancing…

So how did these people do it?

• The property was purchased on 4/18/2001 for $1,341,000. It appears the buyers paid cash. I guess having that kind of cash is a barrier to getting started…
• On 3/5/2002 they took out a first mortgage for $1,000,001 and opened a HELOC for $1,050,000 which they did not use.
• On 7/25/2002 they refinanced with a $1,285,000 first mortgage.
• On 4/21/2003 they refinanced with a $1,500,000 first mortgage.
• On 11/19/2003 they refinanced with a $2,500,000 first mortgage and opened a $750,000 HELOC.
• On 3/11/2005 they refinanced with a $4,750,000 first mortgage.
• On 5/5/2005 they opened a HELOC for $975,000.
• On 3/21/2006 they refinanced with a $6,000,000 first mortgage and opened a $1,000,000 HELOC.
• Total property debt is $7,000,000.
• Total mortgage equity withdrawal is $7,000,000 including their $1,341,000 downpayment which is now gone.

It was less than 5 years between the first mortgage and the final refinance. That is $1,400,000 a year from the house. If this property sells for its current asking price, and if a 6% commission is paid, the total loss to the lender will be $890,000.

Last week, a couple of the astute observers argued that this shouldn’t be our concern; it is a problem between a borrower and a lender. Bullshit. The moment we all became liable for these losses through our tax dollars, it becomes very much our business. I think the MSM is missing a big story by not telling the tale of these people. I imagine Joe SixPack would love to see where his tax dollars are going.

I have documented larger losses in Irvine than the loss on this property, but this one is unique because the sale would actually be recording a $5,000,000 gain for the owners. I wonder if the IRS will give them capital gains tax relief? It is a bit over the exempt amount. You don’t mind subsidizing this behavior with your tax dollars, do you?

{book5}

I’m too sexy for my shirt too sexy for my shirt
So sexy it hurts
And I’m too sexy for Milan too sexy for Milan
New York and Japan

And I’m too sexy for your party
Too sexy for your party
No way I’m disco dancing

I’m too sexy for my car too sexy for my car
Too sexy by far
And I’m too sexy for my hat
Too sexy for my hat what do you think about that

I’m Too Sexy — Right Said Fred

With all of the soon-to-be-former homeowners who spent their houses, you have to wonder if the good times they had while walking the path to foreclosure was worth it.

Asking Price: $514,800

Address: 149 Lockford, Irvine, CA 92602

{book5}

Shook Me All Night Long — AC/DC

Years ago there were occasions when I would party and drink myself into a stupor just for the fun of it. In fact, I have listened to today’s featured song inebriated far more often than not. I can’t do that anymore because the hangovers are too severe, but even in my carefree youth, the hangovers were not pleasant. I would party and have a good time knowing that I would have to pay a heavy price the next day.

Most people who spent their house had a great time, and most did not realize that house prices could fall and the party might end (that ignorance is astonishing, but very real). There were some that suspected the music would stop and didn’t care because they were having such a good time. Some people are still in denial about the end of the party, but soon enough it will become apparent to all.

Once the reality of the market is widely accepted, do you think those people who spent their homes will regret what they did? Or do you think they will think the spending and good times were worth the price they paid later?

Asking Price: $514,800

Income Requirement: $128,700

Downpayment Needed: $102,960

Monthly Equity Burn: $4,290

Purchase Price: $475,000

Purchase Date: 8/27/2003

Address: 149 Lockford, Irvine, CA 92602

That description has a few too many items in the list for each sentence, but the property is described well with few flowery adjectives and no realtorspeak (unless I missed it). Not bad.

There are a few misspelled words though: enogh, cabintry, and my personal favorite, rotundra

• This property was purchased on 8/27/2003 for $475,000. The owners used a $380,000 first mortgage and a $90,000 downpayment.
• On 12/30/2005 they took out an Option ARM with a 1.5% teaser rate for $552,000.
• On 7/18/2007 they opened a HELOC for $50,000.
• Total property debt is $602,000.
• Total mortgage equity withdrawal is $222,000 including their $90,000 downpayment.

All that money is gone. If this sells for its current asking price, the total loss to the lender will be $118,080.

So what do you think? If these people had not HELOCed themselves out of their homes, they would never have had the $222,000 to spend. Of course, they would probably be in a better financial position and possibly capable of keeping their home. Which is better: To spend the money and live for today? Or to be cautious and keep your home?

{book3}

Shook me all night long,
Yeah you, shook me all night long,
Knocked me out, I said you
Shook me all night long,
Had me shaking and you,
Shook me all night long,
Well you shook me,
Well you shook me…

Shook Me All Night Long — AC/DC