OC Housewife, Ponzi borrower, failed land baron

The Real Land Barons of Orange County

For those of you uninterested in statistics and heady analysis of housing markets, the rest of this post is a profile of the crumbling property empire of OC Housewife Vicki Gunvalson and her X (or soon to be) husband Donn. The property records show Donn and Victoria Gunvalson owning three properties:Ponzi_wine

7 SHIRE Coto de Caza, CA 92679

2 Altimira, Coto de Caza, CA 92679

25 Vermillion, Irvine, CA 92603

There is one thing we can be certain of based on the analysis presented above by Global Decision and IHB, the value of the Gunvalson property empire is going down.

2 Altimira, Coto de Caza, CA 92679

This is a property I find personally appealing. It’s a big property adjacent to the golf practice facility. Hopefully, it’s not so close that golf balls pelt the place.

According to Wikipedia,

In Season 3, Gunvalson and her husband are empty nesters and purchase a smaller home in Coto with the goal to downsize and simplify their lives. However, they still reside in their large residence and Gunvalson expresses anxiety of moving to the smaller home because of her perceived connection between financial failure and downsizing her home’s square footage. She explains to the camera, “What will people think?” and eventually decides to sell her smaller house.

I am assuming 2 Altimira is the smaller house, and according to public records, they still own it, probably because nobody will pay them anywhere near what they owe on it.

They purchased the property for $1,650,000 on 4/6/2007 using a $1,320,000 Option ARM, a $165,000 HELOC, and a $165,000 down payment. This purchase came 10 days after they obtained a $300,000 line of credit (HELOC) on their primary residence. Coincidence? Or was this the source of the down payment?

Since property values have fallen more than 30% since early 2007, it’s safe to say they are at least $320,000 underwater, depending on whether or not they used the HELOC as purchase money (What would you guess?)

Vicki seemed very worried about what people will think. So what do you think? ~~ giggles to self ~~

25 Vermillion, Irvine, CA 92603

Vicki and Donn picked up this property on 12/21/2004 for $712,500. They used a $460,950 first mortgage, a $106,300 second mortgage, and a $145,250 down payment. Interestingly enough, they opened a HELOC on their primary residence for $400,000 three weeks prior to purchasing this one. Was Ponzi borrowing the source of their down payment?

Based on the price drops experienced in Irvine, they are probably just above water. No ongoing HELOC abuse here, just another poorly timed purchase.

7 SHIRE Coto de Caza, CA 92679

The primary residence is the cornerstone of family life. Perhaps people will take risks on investment properties, but surely they won’t do anything foolish and risk the family home, right?

This property was purchased on 12/10/2001 for $1,100,000. They used a $825,000 first mortgage, a $55,000 second mortgage, a $55,000 HELOC, and a $165,000 down payment. This $165,000 down payment is the only equity not accounted for by other borrowing. It was the seed of their entire Ponzi empire.

On 12/17/2003 they refinanced the first mortgage for $842,000 and obtained a $75,000 HELOC. This is less than the total of their previous mortgages suggesting they either did not use the original $55,000 HELOC, or they actually paid down the mortgage. Total property debt at this point is $917,000 assuming the $75,000 HELOC was fully utilized.

On 11/30/2004, three weeks prior to the purchase of 25 Vermillion, Irvine, CA 92603, they obtained a HELOC on 7 Shire for $400,000. That is overkill for the $145,250 down payment they needed to obtain their investment property, so perhaps they did not borrow it all? ~~ giggles to self again ~~

On 6/28/2006 they obtained a 7-year fixed ARM from Countrywide for $1,500,000. That’s some serious cash out. At this point, they have added $565,000 to their first mortgage.

On 3/27/2007, about 10 days prior to buying 2 Altimira, Coto de Caza, CA 92679, they obtained a $300,000 HELOC. Again this is overkill for a $165,000 down payment they needed to buy the property.

Finally, on 9/14/2007 they obtained a $500,000 HELOC on 7 Shire. If they used this HELOC, then their total property debt is $2,000,000. With their current $2,395,000 asking price and their underwater property at 2 Altimira, this couple has no housing equity. If they liquidated all these holdings today, they would obtain nothing from their Orange County real estate.

The Real Houswives of Orange County is very instructional. The characters they find set perfect examples of how we all DON’T want to live.