You'd think that the real estate business would be done with questionable resales and mortgages, but that's not the case at 920 W. Camile St. in Santa Ana. The OC Register's John Gittelsohn lays out a terrific tale of how that very modest home wound up be being sold to Mario and Paula Gomez for $625,000 - a $125,000 down payment and a $500,000 mortgage from Wells Fargo. The purchase price is roughly double what similar homes on that block have been going for. So how can that be? Lots of fingers are being pointed, but the real fault seems to center on a Wild West marketplace where most anything goes. Still. The process started with a guy named Jose Castro, who bought 920 Camile from the Bank of New York, which took title to the home after it was foreclosed. On Nov. 16, Wells Fargo lent Castro $289,275 for the property.
On Dec. 3, Castro transferred title of the house to Asset Disposition Venture Capital LLC, a West Covina company managed by Sergio Praslin, who signed documents on behalf of the company. Praslin did not return calls requesting comment that were left on his answering machine daily for the past two weeks. On Jan. 15, Praslin signed the deed selling the property to the Gomezes. Mario Gomez said he was surprised when it came time to sign the papers. "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 of 920, 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. "It sounds to me like the seller helped out," she said. "If someone gave them $125,000, what's the problem? That's a beautiful thing, if you ask me." For the seller, the advantage of paying the down payment was getting Wells Fargo to cover the $500,000 mortgage – as much or more than the house would fetch on the open market.
The Gomezes bought the property at the beginning of this year, and a lot has happened in seven months to tighten up lending requirements. Yet in a mostly unregulated marketplace it's inevitable that shenanigans will happen. Actually, with prices dropping so low the vultures will have many new opportunities to shake down would-be homeowners.