Sorry there are no inside pictures of this one. Here is a look property info -
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- Here is a look at the financials -
- The property was purchased in July 2002 for $160,000.
- The first mortgage was taken July 2002 for $155,200 with First Residential Mortgage Services.
- The property was refinanced in May 2003 for $154,135 also with First Residential Mortgage Services.
- In July 2004 a HELOC was taken out for $51,200 with Washington Mutual Bank.
- In July 2006 the HELOC was increased/modified to $66,200.
- The Foreclosure process started in Dec. 2007.
- Currently the bank owned (commonly called REO or Real Estate Owned) property is for sale and priced at $189,000.
- When the previous owners purchased the property they put a down payment of 3% which came to $4,800. While 3% is not a substantial down payment during the Great Housing Bubble 0% down payment was acceptable. A year later after paying off just over $1000 on the loan they refinanced. Refinances were pretty common in the early Bubble years due to the lowering of the interest rates. This was just a plain refinance - there was no cash out.
- Just two years after investing in the house the owners took a hefty HELOC line. Now they owed more approximately $205,335 for the property. Just taking out a HELOC does not necessarily mean people are going through the money. Even during the Great Housing Bubble there were people who may have taken out a HELOC as an emergency fund. For most people just staying in a house for a few years generated a pretty hefty equity.
- If you are taking a HELOC as basically a rainy day fund you would not need to increase the line. But these buyers did just that - raised their HELOC limit by $15,000 just 2 years later. At this point the leans against the property would total $220,335. Within 17 months of increasing the HELOC, the foreclosure process had started - and foreclosure processes usually do not start until 90 days after the late payment. So just over a year after borrowing another $15,000 the mortgage payments were not being made.
The second income that the house generated for the five years the previous owners had it was approximately $12,000 per year. A $12,000 a year second income may not make one live like a rock star, it is not a bad little extra chunk of change.