Short Sale/Foreclosure question

[sdstargirl]

The other day, I came across a short sale listing of a family friend, which surprise me. As I am new to this real estate business, I thought I might get some feedback/answers from the regulars on this site.

Here are my amateur questions:

The redfin site list the house originally sold at $600K back in Nov. 2002. Currently it is listed as a short sale for $830K. Assuming the data on redfin is accurate and no downpayment, how can someone blow $230K in 6 years?

I never knew you can search documents at the county until I came across this site, so I went down there yesterday. When I did my research, I searched using only the owner’s name and not by land parcel. So I don’t know if I have a full picture from my research. The original loan amount seem to be $418K from the documents I looked at. Then in 2005, there was another document that show the new loan to be $590K. In 2006, an equity loan of $250K, in 2007 another equity loan of $100K. In all the owner took out approximately $522K.

That’s $522k in 6 years. How in the world can someone blow over $500K in 6 years? Is there a possibility that the owner took out all that money and stash it somewhere? What does a short sale mean? Does a short sale occur only after a mortgage default? Can someone just go to the bank and say they can’t afford the mortgage payment so the house is now a short sale, regardless of whether they have cash or not?

I am not particularly close with this family friend, but I know enough about them, that I wouldn’t be surprised if they decided to “work the system”. At the same time, if they aren’t working the system, I feel really bad for them. But then again, how do you blow that type of money, especially the $250K in the last 2 years. How far away is a foreclosure?

Is this the typical of the current short sale homes in San Diego?

I do apologize for my ramblings. But I am just shocked that this isn’t a story from a newspaper. I know these people.

-sdstargirl

[jpinpb]

Ah, welcome to the shocking discoveries. I come across them ALL THE TIME. I keep track of properties in several ZIP codes and monitor DOM by address and sales, etc. I also keep track of NODs and foreclosures.

That’s when I continually see the cash taken out and people walking. I see it regularly. Really burns me. What really pisses me off is it’s ok. Non-recourse loan. Take the money out of the house, give the house back to the bank.

It’s like legally robbing the bank. As an added bonus, our tax dollars get to help the banks. Insult to injury.

Don’t get me started.

[jpinpb]

Ah, welcome to the shocking discoveries. I come across them ALL THE TIME. I keep track of properties in several ZIP codes and monitor DOM by address and sales, etc. I also keep track of NODs and foreclosures.

That’s when I continually see the cash taken out and people walking. I see it regularly. Really burns me. What really pisses me off is it’s ok. Non-recourse loan. Take the money out of the house, give the house back to the bank.

It’s like legally robbing the bank. As an added bonus, our tax dollars get to help the banks. Insult to injury.

Don’t get me started.

[jpinpb]

Ah, welcome to the shocking discoveries. I come across them ALL THE TIME. I keep track of properties in several ZIP codes and monitor DOM by address and sales, etc. I also keep track of NODs and foreclosures.

That’s when I continually see the cash taken out and people walking. I see it regularly. Really burns me. What really pisses me off is it’s ok. Non-recourse loan. Take the money out of the house, give the house back to the bank.

It’s like legally robbing the bank. As an added bonus, our tax dollars get to help the banks. Insult to injury.

Don’t get me started.

[jpinpb]

Ah, welcome to the shocking discoveries. I come across them ALL THE TIME. I keep track of properties in several ZIP codes and monitor DOM by address and sales, etc. I also keep track of NODs and foreclosures.

That’s when I continually see the cash taken out and people walking. I see it regularly. Really burns me. What really pisses me off is it’s ok. Non-recourse loan. Take the money out of the house, give the house back to the bank.

It’s like legally robbing the bank. As an added bonus, our tax dollars get to help the banks. Insult to injury.

Don’t get me started.

[jpinpb]

Ah, welcome to the shocking discoveries. I come across them ALL THE TIME. I keep track of properties in several ZIP codes and monitor DOM by address and sales, etc. I also keep track of NODs and foreclosures.

That’s when I continually see the cash taken out and people walking. I see it regularly. Really burns me. What really pisses me off is it’s ok. Non-recourse loan. Take the money out of the house, give the house back to the bank.

It’s like legally robbing the bank. As an added bonus, our tax dollars get to help the banks. Insult to injury.

Don’t get me started.

[sdstargirl]

Wow, I didn’t know that owners can do this.

So, potentially my family friend can pocket the $522K, earn interest, then in couple of years, buy a house with cash. No penalties, and gets a house essentially for free.

How do I sign up for this?

[sdstargirl]

Wow, I didn’t know that owners can do this.

So, potentially my family friend can pocket the $522K, earn interest, then in couple of years, buy a house with cash. No penalties, and gets a house essentially for free.

How do I sign up for this?

[sdstargirl]

Wow, I didn’t know that owners can do this.

So, potentially my family friend can pocket the $522K, earn interest, then in couple of years, buy a house with cash. No penalties, and gets a house essentially for free.

How do I sign up for this?

[sdstargirl]

Wow, I didn’t know that owners can do this.

So, potentially my family friend can pocket the $522K, earn interest, then in couple of years, buy a house with cash. No penalties, and gets a house essentially for free.

How do I sign up for this?

[sdstargirl]

Wow, I didn’t know that owners can do this.

So, potentially my family friend can pocket the $522K, earn interest, then in couple of years, buy a house with cash. No penalties, and gets a house essentially for free.

How do I sign up for this?

[urbanrealtor]

While I stand in the minority on this, I really try not to cast too much judgment in the direction of poor decisions. Many people who bought during the boom were afraid of being priced out permanently. Many of the people who refi’d were excited about their newfound wealth. Bear in mind credit ratings agencies gave dirt-backed security a treasury-equivalent rating.

The minority of opinion during the boom thought things were really far too overpriced. Those believers fell into 2 camps: those who had data to support that opinion (eg: the proprietor of this blog) and those who did not (those who were contrarians or “just felt it”). Most people were not this smart or contrary. Many experts supported the durability of the high prices.

While the medium term error of high prices is clear, it is unfair to hold too much against people who erred (imho).

[urbanrealtor]

While I stand in the minority on this, I really try not to cast too much judgment in the direction of poor decisions. Many people who bought during the boom were afraid of being priced out permanently. Many of the people who refi’d were excited about their newfound wealth. Bear in mind credit ratings agencies gave dirt-backed security a treasury-equivalent rating.

The minority of opinion during the boom thought things were really far too overpriced. Those believers fell into 2 camps: those who had data to support that opinion (eg: the proprietor of this blog) and those who did not (those who were contrarians or “just felt it”). Most people were not this smart or contrary. Many experts supported the durability of the high prices.

While the medium term error of high prices is clear, it is unfair to hold too much against people who erred (imho).

[urbanrealtor]

While I stand in the minority on this, I really try not to cast too much judgment in the direction of poor decisions. Many people who bought during the boom were afraid of being priced out permanently. Many of the people who refi’d were excited about their newfound wealth. Bear in mind credit ratings agencies gave dirt-backed security a treasury-equivalent rating.

The minority of opinion during the boom thought things were really far too overpriced. Those believers fell into 2 camps: those who had data to support that opinion (eg: the proprietor of this blog) and those who did not (those who were contrarians or “just felt it”). Most people were not this smart or contrary. Many experts supported the durability of the high prices.

While the medium term error of high prices is clear, it is unfair to hold too much against people who erred (imho).

[urbanrealtor]

While I stand in the minority on this, I really try not to cast too much judgment in the direction of poor decisions. Many people who bought during the boom were afraid of being priced out permanently. Many of the people who refi’d were excited about their newfound wealth. Bear in mind credit ratings agencies gave dirt-backed security a treasury-equivalent rating.

The minority of opinion during the boom thought things were really far too overpriced. Those believers fell into 2 camps: those who had data to support that opinion (eg: the proprietor of this blog) and those who did not (those who were contrarians or “just felt it”). Most people were not this smart or contrary. Many experts supported the durability of the high prices.

While the medium term error of high prices is clear, it is unfair to hold too much against people who erred (imho).

[Author]

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