Here is the property info -
|Bedrooms||Style||Lot||Year Built||Bathrooms||Garage||Square Feet||Price|
|4||Single Family Home||7450||1945||1||1200||$185,000|
Here are the financials -
- The property was purchased in June 2006 for $325,000.
- The first mortgage in June 2006 was for $260,000 using an ARM with Eastern American Mortgage Co.
- The same day second mortgage, also June 2006, was for $65,000 also with Eastern American Mortgage Co.
- The foreclosure process started Feb. 2007.
- The REO property was previously listed at $185,000 and has been reduced to the current price of $175,000.
So back to the example, 100% financing on a property and within 8 months the foreclosure process started. Counting back 90 days to the first missed payment - that means within 5 months of purchasing the property the new owner was in trouble. Now whoever purchased the loan from Eastern American Mortgage is going to lose $150,000 outright plus the foreclosure expenses. The property financials do not look good anymore but packaged in an SIV or some other cool acronym this really must have looked like a winner.