Drowning in Plymouth...

Here is an interesting home currently on the market. The Amador Ledger-Dispatch has a Notice of Default filed on 2/27 with the following information:

• NOTICE OF TRUSTEE'S SALE T.S No. 1119221-04
• Date of Sale: 03/18/2008
• 14661 Shenandoah Road Plymouth CA 95669
• Notice of Sale is: $440,155.01

Interestingly, the now much-relied-upon Amador.WhoBoughtWhat .Com (thanks guys) shows this property last sold on 3/11/2005 to James & Deborah Ferguson for $310,500. This was confirmed by NexTag as well.

Currently, NexTag has the estimated value for this home at $355k.

Notice the difference between what is listed as the "Notice of Sale", which is approximately what is owed on the property (the UPB - unpaid principal balance) plus some estimated fees, and what the Fergusons actually paid for the home.

$355k vs. $440k - hello! Can someone say "refi with cash back"? How about the word "underwater"?

Laughably, the home is currently for sale at $489k through Kappel and Kappel. Good luck with that.
14661 SHENANDOAH Rd
Plymouth, CA, 95669 County: Amador
Bd: 3 Ba: 1 1314 sqft.
MLS#: 60119124 Status: W
Price: $489,000

There does seem to be some discrepancy on the number of bedrooms. Kappel and Kappel have it recorded as a 3/1, while NexTag and WhoBoughtWhat have it down as a 2/1.

So, would this person qualify for a Bernanke sponsored suggestion for the lender to reduce the principal amount to match what is fair market value? How and who would analyze each of the millions of these types of situations? If the lender didn't do the due diligence when they gave the loan to begin with, what makes you think that they will provide the due diligence to the FHA, Fannie Mae or Freddie Mac when they try and hock this loan?

Clearly, a person that took out equity from their homes when values were soaring and now find themselves upside down and underwater should not be propped up by any government sponsored legislation or strong "suggestions" to the Mortgage Banker's Association. The government needs to stay out of this! The lenders need to take their lumps, the borrowers need to feel the pain, and the market will absorb the downside appropriately.

Why we as a society want to sponsor and advocate reckless behavior at taxpayers expense is beyond me.