The Morning Report
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There’s a one-bedroom condo on the market in Sommerset Villas in Escondido. Asking price: $60,950.
Less than a year ago, that condo sold for $265,000.
The unit was one of the 81 condos at the center of a massive real estate swindle orchestrated by Jim McConville. When we investigated that swindle earlier this year, we knew that the impact would be immense in the three complexes and in the surrounding neighborhoods of Escondido and San Marcos.
But this listing gives us our first concrete estimate at how big the losses will be for the banks involved in the series of transactions. The $212,000 loan used to finance this unit on June 25 last year was apparently sold on to Freddie Mac, one of the giant government-controlled mortgage companies, according to the public records filed when a property goes through foreclosure.
Now, Freddie Mac is hoping to get just $60,950 for it.
The unit, No. 12, had sold last year to a buyer named Michael Magaro, who became the owner of three other units in Sommerset Villas in a one-week period last year. Magaro’s four loans went through Home Loan Network Corp., one of the predominant lenders involved in these series of transactions.
The biggest issue for anyone looking to buy this unit will be obtaining financing. Because so many of the units are in foreclosure (upwards of 35 in the 72-unit complex) and because of the dramatic impact this scheme has had on the property, there aren’t enough owners living there to qualify for financing from conventional sources.
Plus, even though the price is drastically lower than the unit previously sold for, buyers would be buying into a homeowners association — which is itself dealing with the same issues.
Here’s what the listing says about the unit:
This unit is great! It is a very spacious 1 bedroom unit with vaulted ceilings. It feels very large, and comes with room for a washer and dryer! The unit is not fully remodeled, it has some finish work to be completed. With some paint, carpet, appliances and very small construction work, this home will be complete and ready to occupy! The HOA is low on funds, and the O/O (owner-occupancy ratio) is very low.