It’s difficult enough to fathom how anyone would spend $450,000 for a garden-variety 3-bedroom condo in the 3700 block of Elston Ave. It’s beyond difficult to understand why anyone would have done that in April of 2008.
According to information on file with the Cook County Recorder of Deeds, Unit 4 at 3715 Elston Ave closed on April 15, 2008 for $450,000. The buyer put 10% down and took out a $405,000 first mortgage. The lender filed a foreclosure suit on November 28, a little more than 7 months later. Judicial Sales Corp (JSC) took title to the property on behalf of the lender in November of 2010.
Unit 4 came back on the market came back on the market 2 days ago at an asking price of $239,900.
Unit 1 in the building sold for $250,000 in January of 2008, went into foreclosure in December of that year, and was deeded to JSC in May of 2010.
Unit 2 sold for $418,500 in March of 2008, financed by a mortgage of $376,650. A foreclosure was filed a year later, but the buyer apparently remains in title to the property with the benefit of a loan modification increasing the mortgage amount to $426,432.
Unit 3 sold for $425,000 in December of 2007 subject to a $382,500 mortgage. A foreclosure initiated in July of 2008 was completed in March of 2010.
Unit 3 resold for $115,500 one month ago.
Units 2, 3 and 4 were sold at prices substantially in excess of contemporaneous sales of similar units on the same block of Elston.
The speed at which all four units went into foreclosure would seem to indicate that none of the buyers made a mortgage payment after closing despite having made – at least on the surface record of the transactions – substantial down payments.
I’ll leave it to readers to speculate about what actually transpired here. And no, I won’t volunteer my educated guesses. I’ll simply note that this story is repeated many, many times in many third-tier locations in Chicago. Is it evidence of a market meltdown, or of something else?
Joe — why aren’t you volunteering your educated guesses? I’m stumped. Go ahead and tell us!
Stan,
I’m not volunteering because I would only be guessing about what led to this highly suspicious fact pattern. I have no hard evidence to back up my guess.
Joe, I think you should tell all of us what you’re thinking. The thing is, I’ve also seen this same pattern over and over again in third-tier neighborhoods. I keep seeing whole buildings like this one that are full of units that went rapidly into foreclosure, with (likely) nary a payment made. But I don’t know the answer per se. I’d love it if you’d guess. My own supposition is that units (all around the city) were bought and then their owners shortly thereafter lost their jobs. Is that your guess as well? Or do you think it’s something else? I just can’t fathom why someone would buy a place and then never make a payment on it. The fact that it’s happened so frequently in such neighborhoods is beyond puzzling. I get that mortgage loan fraud was rampant, and I get that money was free. What I don’t *get* is why anyone would part with a down payment (even a small one) and then immediately *not* make monthly payments. What do *you* think?
Enzo,
I don’t think simultaneous job loss had anything to do with this situation, although it’s a remote possibility.
I wonder whether the down payment funds were round-tripped from the developer through nominal buyers who were compensated in some fashion for the hit to their credit score. I also wonder what types of mortgages were involved here. Just wondering, based on nothing but how curious these transactions were.
I’ll take “Mortgage Fraud” for $1,000, Alex.