3 Notices of Default were filed in La Canada this week.  According to multiple listing service (MLS) records for the past 6 months:

73 homes sold
Average sale price $1,630,549
Average days on market 87

Let’s look at the three homes with the Notices of Default (NOD’s):

Home # 1 is in La Canada’s canyon
Purchased in 1995 for under $1,000,000
Currently on the market for over $2,000,000
The owners have been borrowing against the equity in the home since a couple of years after their initial purchase and unfortunately it has caught up with them. They probably can’t continue making payments on three loans; they appear to have some equity remaining, so I don’t believe they will loose the home in foreclosure.

Home #2 is in La Canada’s Sagebrush neighborhood and not within the La Canada school district
Purchased in 2006 for a little less than $700,000,
6 months AFTER purchase an equity line was added to the mix
Presently on the market for a little less than $600,000 subject to lender’s approval of short sale.  So either the lender will approve the short sale (currently in escrow) or the home will probably go to foreclosure. And the listing price of under $600,000 is a fantasy – the lender and the buyer agree on a price, the listing agent “picks a price out of a hat” on a short sale and that is another post.

Home #3 in nearer LCHS
Purchased in 2005 for a little over $800,000 – 0 down financing
Less than a year after purchase a small 2nd was taken
It doesn’t appear that this home has much if any equity. I hope the owner can afford to keep it.

So each instance is about borrowing and spending the equity in the home until:

1) you don’t have any left
2) you can’t afford the increased payments