Bearlee sent this in:
How's this for price reductions and equity dipping: MLS#8009198The property is located at 5789 SW Salmon St. It's listed at 1476 sq ft, but PortlandMaps only shows 720, so I can assume the basement was finished without a permit. No photos of it either.
http://www.rmls.com/RC2/engine/reportGenerator.asp
I drive by this one on my way to work each day. Initial listing price $450K, reduced to $399K, and now listed at $300K.
Purchased 08-01-1989 for $35,950.
And now it's a short sale.
I wonder where all the money went?
11 comments:
So it was one owner? One owner who extracted all that equity and then defaulted?
A coworker seeking a house is finding similar stories to that. People who bought for 82K in 89 now owing 260K and defaulting.
Shouldn't that be a crime? Oh, no, wait. This is America crica 2008, the Age of Conservatism and the credo, "Get as much as you can, all that you can and don't give a second thought to how you get it."
As far as the square footage represented in the listing. RMLS includes both finished & unfinished basement area in their listings when indicating the square footage. Another very slimy tactic by an organization that is rapidly becoming despised & is in need of ethics training by their employees.
"Shouldn't that be a crime?". No. They basically sold their house already, but they tool the money in chunks (or in one big chunk) and where they spent it is their business.
It's really up to the lenders to due their due diligence and make sure that the amount they are lending will be covered by the cost of the house if the owner's default. That risk is priced into the loans. The banks screwed up big time recently, and if anything there was major fraud going on between inspectors (who in some cases were likely coerced into inflating values) and lenders who were looking to make money on the loans and underestimating the risk.
"Another very slimy tactic by an organization that is rapidly becoming despised & is in need of ethics training by their employees."
But they do have ethics training, see this comment from a recently minted Realtor:
Patrick.net
There is one down the street from me in the west hills off barnes rd that has been on the market at least 3 times with different real estate agents and every time they list it they lower the price. It went from $435,000 to now $385,000 over the course of this summer. Yes, even the west hills, sylvan height, portland heights, etc. are going down in price. These are the areas that a lot of people thought would hold their values.
How do you figure they already "sold" their house? They borrowed against it and didn't pay the money back. That's normally called theft.
Tell me you're not defending that kind of mentality. Tell me you don't think it was ok for them to take out loans and then default. Tell me you don't place all the blame on banks. If you do, you're wrong.
Where off Barnes?
My favorites are the Braedon Heights townhomes that started at 560K and are now 475K and they finally took down the "Only 4 Left!" sign after it was up for a year. Must have gotten embarassing.
"How do you figure they already "sold" their house? They borrowed against it and didn't pay the money back. That's normally called theft."
It's not theft. Say a homeowner borrows $300k on a $400k house. If they go into default and can't pay it back the bank takes it back. They make a quick sale at $350k and get back their money, and the $50k covers their fees, time and expenses.
The homeowners in effect sold their house for $300k. They got $300k, and gave up their house, the collateral.
The banks are now getting screwed because what they thought was worth $400k turns out is only worth $250k, so they lose $50k plus their time/fees.
In one case we looked at a short sale that was listed at $289k, but the loan balance was $345k. The owners were using the money to live off because one person was disabled and couldn't work. They didn't invest anything in the house in years, and it showed. I'd say the house was worth $200k, tops, assuming $100k would put it back to good condition.
"Tell me you're not defending that kind of mentality. Tell me you don't think it was ok for them to take out loans and then default. Tell me you don't place all the blame on banks. If you do, you're wrong."
Do I think it's OK to treat your house like an ATM and walk away? No. And unfortunately I know there are lots of people who are saying "screw it" and giving up instead of trying to work something out.
But I don't think it's a crime, because again I think it's up to the bank to ensure the collateral on the loan (the house) exceeds the balance of the loan.
And I have heard of lenders who are calling in HELOC's in this market when they realized they goofed.
But again don't expect me to feel sorry for the owners/borrowers as many people do. I've heard "I can't believe they're losing their house because they fell a few payments behind" more than once. They're not losing it, they already sold it.
Banks are taking on the chin in part because they used shady mortgage brokers who inflated incomes & fudged on debt to get borrowers into risky loans. This was done in many instances by cooperative borrowers. Also appraisals were fluffed to hit the number needed for the refi or sales transaction to go through, many time based on pressure from the mortgage broker. Lastly it has been stated by a realtor in a previous post that her office does not release information regarding seller concessions on sales.
Until the banks go back to hiring their own loan officers to replace the mortgage brokers, no pressure is applied to appraisers & realtors are forced to have full disclosure on all information regarding any sale, the banking system will continue to falter in regards to residential lending. Time for someone to step in & clean up this huge mess which has been building for the last 20 years.
The house off barnes in the west hills that started at about $435,000 is MLs#: 8084151. Now the price just dropped again and it is $359,000. Maybe realtor number 3 or 4 is trying to get them to be more realistic on their price. The house is just an old looking ranch. It is partially remodeled inside, but the house is nothing special. I find it suspicious that they've listed it with so many real estate agencies. Maybe so it could go back to being a "new listing" on the mls so many times. Also there was a bug exterminator truck in the driveway between switching "for sale" signs. So maybe they can sell it because it is buggy. Who knows.
P.S. I laughed when that stupid Braedon Townhouse "Only 4 Left!" sign came down too! Did you see the rainbow twirler kite thing they put over the $475 sign? Like that's going to help?!?! Ha ha.
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