The ease that home buying became during the Great Housing Bubble gave people that would not ordinarily be able to purchase a house a chance. Hopefully there are some people embracing the unique chance they were given. But today is another case of someone that did not.
When a property owner falls into foreclosure within a year of purchasing the property the most common reason is that budget and financial management was the problem. Although there are some reasons the foreclosure may have occurred. The owner may have fallen into financial distress immediately upon the purchase - perhaps a layoff or an illness did not allow for the mortgage payments. Perhaps the owner was never in a financial position where they could afford the property - the mortgage company messed up and allowed a loan that never should have been given. Or maybe the previous owner is trying to game the system through an inflated price and appraisal through the use of a straw buyer.
It will be interesting one day if we (a collective, societal we) can catalog the details of these cases and find out what the real driver for the huge rate of foreclosures was. That way we could develop the necessary rules and regulations to prevent such losses in the future. However, that is for another time. Today we will look at a no money down home-buyer that fell into foreclosure within months of ownership. Let's take a look at today's feature property from Rockaway.
Here is the property -
Here is the property info -
- The property was purchased March 2006 for $435,000.
- The original mortgage in March 2006 was for $348,000 with Fremont Mortgage using an ARM with a balloon rider.
- A second mortgage was taken the same day in March 2006 for $87,000 also with Fremont Mortgage.
- The foreclosure process started with a Lis Pendens filed in January 2007.
- The property is currently for sale through a realtor for $324,900.
The total loss for this property if purchased at the current sale price with the realtor receiving the standard commission will be at least $129,594. The buyer is not losing anything other than their credit status. However, whoever bought the mortgage from Fremont Mortgage is out that money.