News the Stars Bring Today

Minta Garcia, a school bus driver and her husband, Luis Guillermo Flores, are, most likely, “unlicensed” real estate investors (”flippers”) who buy and sell properties. The last few years however, have not been good to them, due to the down turn in the real estate market in Washington. They were just on CNN, hoping that Washington will “bail them out” of their foreclosure.

They owned a small condo at 6001 Arlington #721, Falls Church, VA (current worth $191,500 2 bedrooms 1 bath) since 1999, and sold it on Nov. 24, 2008 for 160K. They purchased 3438 Charles Street, Falls Church, VA (6 bdr, 2 1/2 ba) on 1/05/05 for $510,000 and sold it on 6/10/08 for $429,000. Their current home - 1920 N. Dinwiddie Street, Arlington, Va (5 bedr 3 1/2 ba 3503 sq. ft) -was purchased with her husband (Luis Guillermo Flores) on 11/16/06 for $800,000. Possibly they made a profit of the small condo, but they obviously didn’t apply that towards their other purchases in 2005 and 2006, totaling almost 1.3 million dollars.

Now, I used to be a mortgage loan officer for a while, but I began right at the beginning of the real estate down turn 2 or 3 years ago. Now, it seems to me that a school bus driver probably makes in the vicinity of $450/week. Her husband is disabled.

Now, as a loan officer, I heard a lot of sad stories, and since I had been a social worker in the early 70’s, I also had a lot of sympathy for people too. However, in looking at the property that is supposedly $800,000, I can’t really agree that it is worth that. Possibly the location is good. However, it basically looks like an older home that has been remodeled. However, upon checking trulia, I found that it was built in 2006, but it is a little like a tenement house, with no yard. The comparable properties on Dinwiddie St. are presently estimated at 1.113 million. So, when Minta said it was worth 620K, I think she may have been misleading, because she obviously spends a lot of time in real estate. She probably doesn’t want to lose it now that it is in foreclosure.

Archangel estimated that the mortgage payment would be between $4,000 and 5,500/mo, depending on the type of mortgage and rate. It obviously made no sense whatsoever for a mortgage company to approve this purchase, since they owned two properties that they just sold in 2008. They were all “flips.” Now, I don’t have anything against  entrepreneurs, who go in and buy a property for $60 or 70k and make renovations and turn around and sell for 200K.

That’s what America is all about. But what Minta and her husband were doing was stupidity that was being condoned by the mortgage industry. But let’s not continue the lie by saying that she was a school bus driver. She and her husband are “flippers”, who came into the market too late.

Most likely, the mortgage company that approved the mortgage should not be left off the hook either. Most loan officers who participate in some kind of fraud also have to face heavy penalties. Not good business. My friendly advice to her is find someone who will buy the house at a “Short sale.”

Obviously, she has just been on CNN and received national advertisement, so it will be up to her to negotiate with the bank for a short sale, and hope that she doesn’t get prosecuted for fraud. The short sale is the only way they can save their credit score.