Losing Money in Mine Hill

Todays feature property was purchased at the height of the Great Housing Bubble. It was an affordable, modest purchase and everyone involved ended up losing money - except for the previous property owner. If no fraud is involved, this is one of the saddest parts of the Housing Bubble decline. People saving up to be part of the American dream of home ownership and losing everything. Savings lost. Houses lost. Dreams turned into nightmares. Stress on children, families and marriages.

Well, lets gets started and take a look at the property -

Here is the Property Info -
Bedrooms	Style	Lot	Year Built	Bathrooms	Garage	Square Feet	Price
3	Single Family Home	61125	1928	2		1200	$279,900

Here are the financials -

• The property was purchased in June 2005 for $348,000.

• The only mortgage was for $330,600 with Indymac using a Fixed/Adjustable Rate LIBOR Rider.

• The Lis Pendens filed in January 2007.

• The REO property is currently for sale at $279,900.

• One side note - the previous owner purchased the property in January 2003 for $288,000.

The owners tried to do the right thing - the managed to put down $17,400 which was 5% of the purchase price. Five percent was a decent down payment during the Great Housing Bubble, when 100% financing was routine. However even with the Fixed/Adjustable Rate LIBOR Rider the owner fell into foreclosure 18 months after buying the property.

The losses on the Mine Hill property added up. The owner lost their downpayment of $17,400. The lender will lose at least $67,494 if the property sells for the full asking price provided they have the standard 6% realtor fees. The combined loss on this property will be at least $84,894.

Now on to the interesting side note - the house is currently priced $8,100 less the than 2003 purchase price. That is a substantial setback and will be a real comp killer for the area.