Sunday, December 21, 2008

Unlucky in Mount Olive

Home ownership is supposed to a happy times in ones life. Opening new doors and new possibilities. Sometimes home ownership can close and end more than it opens. That is the case of our unlucky homeowners in Mount Olive. Lets take a look -

Here is the property -
Front of the house

The living room with beautiful hardwood floors

Here is the property info -

Property Features
  • Single Family Property

  • Status: Active
  • County: Morris
  • Year Built: 2004
  • 4 total bedroom(s)
  • 3.5 total bath(s)
  • 3 total full bath(s)
  • 1 total half bath(s)
  • 11 total rooms
  • Approximately 4100 sq. ft.
  • Style: Colonial
  • Master bedroom
  • Dining room
  • Basement
  • Master bedroom is 22x18,Includes: Full Bath, Sitting Room, Walk-In Closet
  • Living room is 13
  • Dining room is 17x13,Formal Dining Room
  • Family room is 20x19
  • Kitchen is 20x19
  • Den is 16x20
  • Basement is Full, Unfinished
  • Hardwood floors
  • Fireplace(s)
  • Fireplace features: Living Room
  • 2 car garage
  • Attached parking
  • Parking features: Garage Door Opener
  • Heating features: 2 Units, Multi-Zone,Gas Water Heater,Electric
  • Forced air heat
  • Central air conditioning
  • Cooling features: 2 Units, Ceiling Fan, Multi-Zone Cooling
  • Exterior construction: Brick, Vinyl Siding
  • Roofing: Asphalt Shingle
  • Approximately 0.44 acre(s)
  • Lot size
Here are the financials -

  • The property was purchased for $675,332.32 in September 2004 directly from the builder.
  • The original mortgage at time of purchase was for $440,000 using an ARM with K Hovnanian American Mortgage.
  • A Lis Pendens was filed against the property in December 2006.
  • After an apparent divorce one of the owners was deeded the property in July 2007.
  • On the same day as the new deed a new mortgage was taken for $500,000 using a balloon payment with Nationstar Mortgage.
  • A private mortgage with a 2-year term (which looks to be interest free) with an apparent family member was also taken in July 2007.
  • The property is currently for sale with a realtor for $625,000.

Lets take a look at what we know. The owners put a hefty down payment of almost 35% - or $235,332. That is a very significant investment - bubble or not. Most likely this was someone moving up not a new buyer. Non-payment of loan happened early but things appeared to have been resolved and ownership resumed along a steady course.

Until the deed was changed along, apparently along with the home owners marital status during home ownership. The owner then went from a $440,000 mortgage to a $570,000 mortgage. Not easy during good times with two owners, much harder in bad times with one owner. Especially difficult when $70,000 must be paid back within two years.

Now the property is up for sale. If the property sells for full asking price and the realtor takes the standard commission the owner will net $587,500. With outstanding mortgages there will be a small cushion of approximately $17,500. But since the owner put a significant amount down on the original purchase they will have lost $87,832 during the four years of ownership.

Actually, this homeowner looks like a lot was lost during the home-ownership period - a marriage, their credit rating, along with the $87,832. Not a lucky house.


Paula Clark said...

So many people in the same shoes. Financial difficulty really tests a marriage.
My advise. Stay close, and work together. You can't be angry at one another. Work on it, and you will be fine. Especialy if you have children. A House is just a House,... You make it a Home!
Paula Clark

NJHH said...

A house can be more than a house. For years houses were though of as primarily homes that one could transform into a family place. During the bubble houses became investment vehicles where one could get rich, quick. Now to too many people they have become burdens. Can't sell it. Can't refinance it. And increasingly don't want it.

We often wonder the impact the bubble will have on the few next generations.