Sunday, July 27, 2008

Trouble in Mount Arlington

Mount Arlington seems like such a nice place. The new train station just off Route 80. But not everyone is doing great. Today's featured property was purchased at the end of the bubble. The former property owner purchased a brand new dream house. However it took look less than a year for the dream to turn into a nightmare. The nightmare of foreclosure became realty for this Mount Arlington Colonial. In addition was the nightmare of thousands of dollars lost. Something that could have been so wonderful turned into so much trouble.

Let's take a look at the property -

The front of the house.

The gourmet kitchen.

Either family room or living room.

Now let's take a look at the property info -

  • Single Family Property
  • Status: Active
  • County: Morris
  • Subdivision: NOLANS RIDGE
  • Year Built: 2006
  • 2 total bedroom(s)
  • 2.5 total bath(s)
  • 2 total full bath(s)
  • 1 total half bath(s)
  • 8 total rooms
  • Style: Colonial
  • Living room
  • Family room
  • Kitchen
  • Basement
  • Laundry room
  • Bathroom(s) on main floor
  • Bedroom(s) on main floor
  • Basement is Full, Unfinished
  • 2 car garage
  • Parking features: Built-In Garage
  • Heating features: Multi-Zone,Gas-Natural
  • Forced air heat
  • Central air conditioning
  • Interior features: Dishwasher, Range/Oven-Gas, Center Island, Country Kitchen, Pantry, Basement Level Rooms: Walkout, First Level Rooms: 1 Bedroom, Bath Main, Bath(s) Other, Breakfast Room, Dining Room, Family Room, Kitchen, Laundry Room, Living Room, Second Level Rooms: 1 Bedroom, Attic, Bath(s) Other
  • Exterior construction: Brick, Vinyl Siding
  • Roofing: Asphalt Shingle
Finally, here are the financials -
  • The house was purchased directly from the builder in May 2006 for $820,000.
  • The original mortgage made on the same day as the purchase was an ARM for $574,000 with Fairmont Funding.
  • A second mortgage was taken the three days later for $204,000 also with Fairmont Funding.
  • A Lis Pendens was filed February 2007 which started the foreclosure process.

  • The property is currently an REO for sale with a realtor for $699,900.
  • Finally, our featured property is also part of the Horizons at Pennington Woods Condominium Association which appears to require a monthly fee of $292.
From the various paperwork it looks like the buyer put a downpayment of $246,000 which was 30% of the property price. This is an excellent start. However within three days the owner pulled out 204,000 which made the real downpayment really just above 5% or $42,000.

The trouble hit shortly after the purchase since just 9 months later the property started in the foreclosure process. Another important part to note is that it appears from the county records that the Condo Association never received a payment for the property.

Now the former owner is out their $42,000. The lender is out $120,094 if they get the full asking price for the property. The total loss is at least $162,094 for this property so far. Not the biggest one we have come across (that would be this one) but still a significant loss.


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Tom said...

Completely unrelated to refinancing or heloc's or foreclosures....

Houses like that bug me. Especially when they're priced so high. They use a nice brick on the front and to save a few grand, they skimp and stucco the sides and back. Really tacky in my opinion. I've seen million+ homes that were like that.

It's one of the boneheaded things I see more and more of lately. Kitchen seems really bad for the price too.

When I see homes like that I wonder what else they skimped on that you can't see that can cause some major headaches.

NJHH said...

Welcome back Tom!

I agree about the facing. Having a stucco front with 3 sides of vinyl is even worse. Even worse is when the front and side garage are stucco or brick and the two other sides or similar color vinyl.

I am beginning to wonder how many of these people are straw buyers. Falling into foreclosure just a few months after purchasing seems questionable. A few years into ownership when an ARM resets is one thing but almost immediately on ownership seems so questionable.