$625,000 house on a street wrecked by subprime loans?

[moh malekpour]

Prices are plunging on Santa Ana's Camile St. But a few troubling exceptions are emerging

It seems like a rare bright spot in a dark real estate market.

A year ago, the house at 920 W. Camile St. in Santa Ana was bank-owned, deserted and tagged with gang graffiti, a symbol of how the subprime lending bonanza had blighted a city block.

In October, the house sold at auction for $304,500, little more than half what a buyer using 100-percent subprime financing paid in 2006.

Today, 920 W. Camile has been renovated, repainted and floored with faux marble. It resold in January for $625,000, according to county records – a $125,000 down payment and a $500,000 mortgage from Wells Fargo Bank.

The owners and residents are Mario and Paula Gomez, both garment workers at St. John Knits in Irvine and parents of three sons. The Gomezes also own 922 W. Camile, a home they bought in a 1998 foreclosure sale for $109,600. They are now landlords, and have staked their financial faith and future on Camile Street.

"We wanted a place with three bedrooms," Mario Gomez, 48, said in Spanish.

But why would the price of a troubled property on a blighted street double between October and January?

At a time when America's biggest financial institutions are reporting billions of dollars in losses from bad bets on risky mortgages, why would a blue-chip bank like Wells Fargo extend so much credit on a street where comparable homes are selling for $300,000?

The hous has 3 bedrooms, 1 bath and 864 sf GLA

 

[Karl]

It appears it's never going to stop!! Where is the Appraisal??

 

[Kien Nguyen]

Quick profit in 2 months

The seller paid $304,500 for the property on Oct. 07, put down a "phony" downpayment of $125,000 for the Gomezs.
At close of escrow on Jan. 08, the seller got a check of $500,000 from Wells Fargo.

ROI after little over 2 months:

$500,000 - ($304,500 + $125,000) - cost of repair and sale service
= $70,500 - cost of repair and sale service
= Approx. $30K-$50K

To make a million dollars a year, one needs to have 2 to 3 similar transactions per month. It requires plenty of cash to make downpayment to "help" the prospective buyers.....

I don't think it was simple like that, people with this "creative business" must have a "very good/close relationship" with the appraiser, the MB or lender's UW, review appraiser etc... to make the deal went through.

I wonder what is the cost to make such "good/close relationship" ???? if any ???

 

[moh malekpour]

This is the strangest odd ball in that part of Santa Ana. I appraised a home in that neighborhood a week ago and that sales price for that neighbood and for that size of home screams fraud but why and how Wells Fargo finance such a sales price at the time that all lenders are underwater and even are going out of business for their recklessness?

 

[Lloyd Bonafide]

The seller paid $304,500 for the property on Oct. 07, put down a "phony" downpayment of $125,000 for the Gomezs.
At close of escrow on Jan. 08, the seller got a check of $500,000 from Wells Fargo.

I smell a first payment default. It might be in Wells Fargo's REO inventory by the first of the year. (Nice job of an appraisal review by some clown).