OC Register: $625k For This?
The buyers of the property in question paid $625,000 in January '08 for a house that might fetch $60k or $70k where I live. And I'm probably being generous with that assessment. However, the only way the bank (Wells Fargo) would make the loan was with a $125k downpayment from the buyers. Or someone.
Did the buyers have that kind of money available? Of course not.
So the seller simply took the original sales price of $500k, marked it up to $625k, and "provided" the $125k as "downpayment assistance." That, at least, is what's implied, and what I'd tend to believe.
"They lied to us," he said of the sellers. "They said the house was really $500,000, but when I bought it, the papers said $625,000."
Gomez said someone else — he's not sure exactly who — paid the $125,000 down payment.
Documents examined by the Register, including papers in the Gomezes' loan packet, did not show who paid the down payment.
Emily Ralles, who served as escrow officer in the sale, said she didn't know or care who paid the down payment — as long as the check was good and the parties agreed to the terms of the deal.
Neat. Every party in the transaction seems to think these shenanigans are pretty much okay. Even the dubious appraisal gets a wink-wink-nudge-nudge stamp of approval later in the article.
No, really. Bailouts for this sort of crap are precisely where I want our tax dollars to go.