February 15, 2011
Candlestick Point Woes Continue For More Than Cohen
While the Candlestick Point condo San Francisco Supervisor Malia Cohen lost to foreclosure remains listed for sale at $314,900 (having been purchased by Cohen for $518,178 in 2006), it’s a plugged-in tipster that calls our attention to two other Candlestick Point resales that are currently in contract.
Both short sales and listed for $199,000 and $199,999 respectively, 301 Crescent Way #3417 was purchased for $419,000 in 2007 while 401 Crescent Way #4103 was purchased for $400,000 that same year.
As we wrote about the Candle Stick Cove development in 2006:
Our first thought upon spying The Cove from 101: “Are they building a prison over there?” And after perusing their website (“Candlestick Point is one of the City’s hottest new neighborhoods,” and “fast becoming one the of the City’s most desirable addresses”), our second thought: “Uh....”
And as plugged-in people might recall, it was in 2008 we first noted a short-sale in the development and in 2009 that we first noted a two-bedroom market rate unit listed for $389,900, $10,000 less than a comparable "Below Market Rate" (BMR) unit, and selling for even less ($374,900).
∙ San Francisco Supervisor Cohen Walks Away From Underwater Condo [SocketSite]
∙ The Cove (Candlestick Point) [SocketSite]
∙ New Twist: The First
Resale Short Sale At Candlestick Point - The Cove [SocketSite]
∙ Buy A BMR...For $10K More Than Bank-Owned At Candlestick Point [SocketSite]
∙ A Market Rate Resale Below Its BMR Compatriot At Candlestick Point [SocketSite]
First Published: February 15, 2011 1:00 AM
Comments from "Plugged In" Readers
they continue to doggedly build what look like townhouse structures in the area. One popped up about 6 months ago that looks directly upon the 101 and the waste management site across the freeway.
Posted by: bernalkid at February 15, 2011 9:08 AM
Why would someone with a supervisor job (Malia Cohen) would let his property foreclosed? Don't bank go after his other assets in foreclosure?
Posted by: samiest at February 15, 2011 10:35 AM
^Never. You can walk away without financial consequence.
Your credit score will take a hit, but you'll have so much company, no one is going to care.
Posted by: tipster at February 15, 2011 11:06 AM
samiest, you should go read the previous thread on Malia Cohen's condo and her strategic default thereon. That thread ends with a very interesting legal discussion about whether banks have recourse rights when foreclosing on a home with more than one mortgage and/or have underwent refinancing(s). But the short answer is that, by choosing to default, Cohen seems to be betting that the bank isn't going to be allowed to go after her other assets because "purchase money" mortgages in California are non-recourse.
Posted by: Brahma (incensed renter) at February 15, 2011 11:09 AM
Down about 50% for peak for these places, on average, sounds about right. I don't guess that too many people were dumb enough to put any real money down, so there's nothing to see here...
Posted by: El Bombero at February 15, 2011 11:13 AM
Your San Francisco Home. Your Life
From the $490,000s
Posted by: Wai Yip Tung at February 15, 2011 11:42 AM
Wow... I can buy another house before I stop paying my underwater house... Unbelievable.
Posted by: samiest at February 15, 2011 12:22 PM
@samiest -- Note though that california law specifically exempts a lender seeking damages from fraud from the anti-deficiency regulations is many cases.
Notwithstanding the attempt to buy one house before dumping the prior one, one has to wonder how many loan apps during the boom didn't contain enough material misstatements that fraud could be argued. Certainly I'd guess most of the stated income/asset ones.
Practically though, some people may not have enough assets for this to be worth the bank's while.
(f) Notwithstanding this section or any other provision of law to
the contrary, any person authorized by this state to make or arrange
loans secured by real property or any successor in interest thereto,
that originates, acquires, or purchases, in whole or in part, any
loan secured directly or collaterally, in whole or in part, by a
mortgage or deed of trust on real property or an estate for years
therein, may bring an action for recovery of damages, including
exemplary damages not to exceed 50 percent of the actual damages,
against a borrower where the action is based on fraud under Section
1572 of the Civil Code and the fraudulent conduct by the borrower
induced the original lender to make that loan.
(g) Subdivision (f) does not apply to loans secured by
single-family, owner-occupied residential real property, when the
property is actually occupied by the borrower as represented to the
lender in order to obtain the loan and the loan is for an amount of
one hundred fifty thousand dollars ($150,000) or less, as adjusted
annually, commencing on January 1, 1987, to the Consumer Price Index
as published by the United States Department of Labor.
(h) Any action maintained pursuant to subdivision (f) for damages
shall not constitute a money judgment for deficiency, or a deficiency
judgment within the meaning of Section 580a, 580b, or 580d of the
Code of Civil Procedure.
Posted by: tc_sf at February 15, 2011 12:38 PM
"But the short answer is that, by choosing to default, Cohen seems to be betting that the bank isn't going to be allowed to go after her other assets because "purchase money" mortgages in California are non-recourse."
The second issue is that in many cases a judicial foreclosure is required for a deficiency judgment even when the debt is considered recourse. In that case, you have to go to court for foreclosure and get a judge to agree with you, instead of what most banks do, which is use the deed of trust to schedule an auction.
Posted by: sfrenegade at February 15, 2011 12:42 PM