Coto Housing Blog

We get emails every day from folks asking us to feature their properties in one of our JASR posts or one of our Peakage posts, or one of our generalized foreclosure posts, so we have to pick out those properties in which we find something interesting or enlightening.

Just kidding.  That is how we pick our posts, but no pleading emails.  Yet.

We were going to pass this property by as just another CZ Master Association Notice of Trustee Sale, but something caught our eye.  A canceled NTS.  Yup, and only nine months ago.  Is this a case of one of our now famous loan mods?  I dunno, but we shall speculate.  After all, that is what we do here at the CHB when we have no conclusive data, so let us start, … shall we?

History: 3/29/04 – Current owners purchase 24262 Fairway Lane for $925,000 with a 1st for $740,000 and a 2nd for $156,000.  That is 3% down.

10/25/04 – 1st is refied with 1% teaser Option ARM.

8/29/06 – 1st and 2nd are refied into one first mortgage for $993,750 with 1% teaser Option ARM.

4/3/07 – a 2nd is funded for $189,600.  Total mortgage amount outstanding is at least $1,183,350 not counting any neg am.

4/25/08 – One year after the 2nd is funded, a Notice of Default is recorded for $18,354.  Every time I see one of these recent 2nd situations I wonder what in the world happened with that $189,600?  You can buy a lot of 52″ plasmas for $189,600.  Anybody seen any Ferraris or Lamborghinis driving around Coto Country Homes?

8/01/08 – A Notice of Trustee sale records with an auction date set for 8/19/08, which is postponed multiple times.

8/19/08 – The published bid amount is $1,122,474 which is the total amount owed on just the first mortgage and includes fees, penalties, and negative amortization, and is $128,724 more than the original loan amount.  That is 13% more than the original loan amount.  Plus there is a $189,600 2nd outstanding.

4/30/09 – How much is owed eight months after the NTS first recorded?  I dunno, but we can just imagine.  The NTS is canceled.  We don’t know why.  If the owners care to fill us in, we would be grateful.

This is where we speculate. Did the owners use some of that $189,600 to pay the amount in arrears and bring the loan current?  And if so, why?  They owe a total of more than $1,315,000 and the most the home would sell for in April of 2009 would be about $750,000, (comp is 24082 Fairway Lane), for a CLTV of 175%.  Would you throw out $150,000 to bring current a loan on a home that is worth less than 60% what you owe on it.  I speculate they did not use one penny of the $189,600 to bring the loan current.  Further, I speculate they got a loan mod.  Do you have any other ideas?  Please, do tell.

6/12/09 – Another NOD is recorded, this time the filer is the CZ Master Association for $6,622.

1/05/10 – An NTS from the CZ Master Association records with a amount owed of $9,759 and a date for auction set to 1/21/10.

Why would you not pay your HOA fees if you were planning on living someplace for awhile?  We have noticed that NTSes from the CZ Master Association are usually precursors to NODs and NTSes from lenders.  I guess it is possible that you just don’t have the money to pay, but I am going to speculate again, this time that the current owners have no intention of paying the mortgage on their loan mod and this property will have an NOD filed by the 1st or 2nd holder, maybe both.  What do you think?