sandgk
Watson, Crick & A Twist
There are now several reports of this whole thing on the net from CA newspapers, AP, Reuters, ESPN et al.
Some detail more closely Michaels history with the home, purchased for 757,000. Took out a mortgage of 600,000, then another of 150,000, then a third of 60,000 (i.e. now the total of all liens exceeds original purchase price).
This makes surprising to me one thing: No-one is mentioning the tax deliquency. With a 600K lien on 757K purchased he is below the 80% lien threshold, so he would not need an escrow account. However, when he boosted the line to >95% of purchased value with the 150K loan he should have been required to run an escrow account. The only way to overcome such would be to re-value the house and hope that inflation was keeping the new sum of liens below 80% of the upwardly revised value of the property. Same thing when he took out the last 60K loan.
Regardless he is posted on the San Diego Tax Collector site as owing all taxes from the date of purchase through the present day, with penalties for non-payment. That indicates no escrow was established at any time.
Guess Michaels was going to bank on rolling this property back onto the market - perhaps with a "Bush Slept Here" plaque. :tongue2:
That way he could recoup all his liens, the back-taxes and still come out with a wad of cash in pocket.
Some detail more closely Michaels history with the home, purchased for 757,000. Took out a mortgage of 600,000, then another of 150,000, then a third of 60,000 (i.e. now the total of all liens exceeds original purchase price).
This makes surprising to me one thing: No-one is mentioning the tax deliquency. With a 600K lien on 757K purchased he is below the 80% lien threshold, so he would not need an escrow account. However, when he boosted the line to >95% of purchased value with the 150K loan he should have been required to run an escrow account. The only way to overcome such would be to re-value the house and hope that inflation was keeping the new sum of liens below 80% of the upwardly revised value of the property. Same thing when he took out the last 60K loan.
Regardless he is posted on the San Diego Tax Collector site as owing all taxes from the date of purchase through the present day, with penalties for non-payment. That indicates no escrow was established at any time.
Guess Michaels was going to bank on rolling this property back onto the market - perhaps with a "Bush Slept Here" plaque. :tongue2:
That way he could recoup all his liens, the back-taxes and still come out with a wad of cash in pocket.
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