We’re supposed to feel sorry for these people? Part I
This article is the beginning of an occasional series concerning foreclosures in Merced County -- the economic crisis that doesn't go away.
Today’s example concerns Trustee’s Sale T.S. No. 08-2212-SP-CA, a ranchette in the North Merced area. (Even though Merced County denies the existence of any ranchettes in the county, on this particular road appears to contain a dozen ranchettes, suitable for grazing horses or other backyard ornaments.)
The property is about to be sold at public auction for $949,246.38.
It’s pricing history: in May 1999 it sold for $130,000; it was listed for sale in August 2010 for $298,000; in September, the listing was removed.
Zillow.com estimates the present value of the property at $233,000. http://www.zillow.com/homedetails/2520-La-Loma-Rd-Merced-CA-95340/19181485_zpid/#{scid=hdp-site-map-bubble-details}
$949,246.38 - $233,000 = $716,246.38. Setting aside fees and interest, this still amounts to a huge amount of money the so-called “owners” of this property walked away with (perhaps three times the value of the property).
We suggest that no one will by a property of an estimated value of $233,000 for $950,000; therefore the property will not be sold. The bank or other purported owner of the debt will foreclose, the former owners will declare bankruptcy.
The lost $716,000 is money the public will cover in myriad ways – from higher down payments to higher finance, insurance and real estate fees, etc. This kind of loss also adds to the macro credit situation, still globally frozen because of just this kind of loan or set of loans on one property, included in a mortgage-backed security among others of its kind sent out to the world of investors who believed the bond rating agencies high opinion of these instruments of mass economic destruction and mainstream economists, business and political leaders that proclaimed before the end of 2007 that real estate prices would never go down again.
The people that owe the $949,246.38, unlike people whose houses are sold at auction for less than $50,000, are not facing homelessness. They will join an elite who used their equity situations to borrow for toys and real estate speculation, and are now making bankruptcy socially fashionable. They will lend their voices to the vast whine of failed real estate speculators, realtors, mortgage lenders and bankers that rises up to the heavens while they pray for guidance on more ways to rob those still solvent to pay for their losses (socialize the losses, privatize the gains).
Political leaders’ main pitch to monopolists and plutocrats for jobs programs is to put America back to work so that once again we have carpenters building houses for other carpenters. until the next bubble bursts.