Anatomy of a Foreclosure
1905 Vista Cay fell victim to bank foreclosure on September 28, 2009. This unit had been on the market for 15 months, had received offers, but all fell through for whatever reason.
On closer look at this foreclosure, one begins to wonder who the victim is here, and how this situation is illustrative of the larger problem occurring throughout this country now.
This condo was purchased by John and Wendy Volmert on June 2, 1988, for $129,000. Documents recorded at the San Mateo County Recorder's Office show that this unit was refinanced, including second mortgages, at least 7 times in the 20 years the Volmerts owned it. In those 20 years, the debt continually increased from its initial loan to an amount that was over 3 times the original purchase price.
How Does This Happen?
The owners took out second mortgages as follows:
- In 2003 for $120,000
- Again in 2003 for $180,000
- In 2005 for $129,000
- Consolidated all loans in April 2006 for $360,000
Where Did the Money Go?
Why would someone double down on their debt, increasing the ultimate load to 3 times the purchase amount?
To buy fast food franchises. Stories found online illustrate the owners of 1905 Vista Cay, John and Wendy Volmert, to have purchased 5 fast food franchises in Colorado: three Cold Stone Creamery ice cream stores and two Spicy Pickle restaurants.
April 12, 2004
"John Volmert, and his wife Wendy, own two Cold Stone Creamery franchises and plan to buy more. They just closed on a third franchise, with the site still to be selected. John Volmert declined to say how much he has invested in the stores, but the Web site said the initial franchise fee is $35,000 ($40,000 in the New York metro area), with a total investment of between $257,335 and $366,670."
October 14, 2007
"Volmert will open a second Springs Spicy Pickle soon at 9275 N. Union Blvd. He plans a third at a location to be determined. The cost: Franchise fee, $35,000. Overall initial investment, about $400,000."
"...John and Wendy are in the process of opening a third (Cold Stone Creamery)."
So, the bottom line here is that banks continued loaning money out on real estate they figured would continue to only go up. The owners took every last penny of equity, and then some, they could squeeze out of a condo they rented out, and two homeowners associations are left holding the bag on over $2,500 in unpaid dues (this amount is the actual unpaid dues, not the late and other junk fees added on in foreclosure, according to lien documents recorded at the San Mateo County Recorder's Office) apparently all to fund the purchasing of fast food restaurants out of state.
EdgewaterIsle.com hopes that everyone in Colorado is really enjoying that ice cream.
The 1 BD 1 BA unit at 1905 Vista Cay reverted to bank ownership on September 28, 2009. There were no bidders at a trustee's sale. Here is the document, a trustee's deed, that is issued when the bank takes the property back.
NOTICE OF TRUSTEE'S SALE
Notice is hereby given that RECONTRUST COMPANY N.A. as duly appointed trustee pursuant to the Deed of Trust executed by WENDY J. VOLMERT AND JOHN M. VOLMERT. dated 04/12/2006 and recorded 05/10/06 as Instrument No. 2006-070181 in Book - Page - of Official Records in the office of the County Recorder of San Mateo County State of California will sell on 08/27/2009 at 1:00PM At the Marshall Street entrance to the Hall of Justice and Records 400 County Center Redwood City CA 94061 at public auction to the highest bidder for cash or check as described below payable in full at time of sale all right title and interest conveyed to and now held by it under said Deed of Trust in the property situated in said County and State and as more fully described in the above referenced Deed of Trust. The street address and other common designation if any of the real property described above is purported to be: 1905 VISTA CAY SAN MATEO CA 94404. The undersigned Trustee disclaims any liability for any incorrectness of the street address and other common designation if any shown herein. The total amount of the unpaid balance with interest thereon of the obligation secured by the property to be sold plus reasonable estimated costs expenses and advances at the time of the initial publication of the Notice of Sale is $393,223.09. It is possible that at the time of sale the opening bid may be less than the total indebtedness due. In addition to cash the Trustee will accept cashier's checks drawn on a state or national bank a check drawn by a state or federal credit union or a check drawn by a state or federal savings and loan association savings association or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. Said sale will be made in an ''AS IS'' condition but without covenant or warranty express or implied regarding title possession or encumbrances to satisfy the indebtedness secured by said Deed of Trust advances thereunder with interest as provided and the unpaid principal of the Note secured by said Deed of Trust with interest thereon as provided in said Note plus fees charges and expenses of the Trustee and of the trusts created by said Deed of Trust.