On October 14th 2005, Lucylla Baynes purchased 2415 Dean Street in Ocean Hill Brooklyn for $505,000.

She purchased the property from Anita Sussman, who purchased the home on June 20th 2005 for $340,000 from Richard Cabello (neither Anita Sussman nor Richard Cabello ever lived at the property).

Richard Cabello purchased the property from Jorge Jimenez on February 13th 2005 for $350,000, who was the last person prior to Lucylla Baynes that lived at 2415 Dean Street.

Jorge Jimenez and his family had lived at the property for 29 years, from 1976 to 2005, or 10,585 days.

If your keeping score, the property was sold 3 times in 2005, in which Richard Cabello held title for 3 months and Anita Sussman held title for 4 months.

While it appears that Richard Cabello lost money in his sale to Anita Sussman, the truth is he may have made money if he financed his purchase with Sub Prime financing using either a Stated Income Loan, No Doc Loan, Low Doc Loan for either 100% or 106% financing.  Using sub Prime financing would have magnified his return on investment dramatically.

While we can’t account for the profits earned by Richard Cabello, we can for Anita Sussman which, on a cash basis for the days she held title to the property, are remarkable.

For each of the 114 days Anita Sussman held title she made $1,447.37.  A quick $165,000 profit, being the difference between her purchase price of $340,000 and her sale price of $505,000.

While we live in a country that encourages risk taking on the part of enterprising individuals, what transpired over the last 10 years in real estate in the United States could easily be termed unconscionable and unethical.

When Lucylla Baynes purchased the property she financed using 100% financing in 2 separate loans, a fixed rate mortgage for $404,000 and an adjustable rate mortgage for $101,000.  During the brief time she owned the home she fell behind quite a few times, as indicated in the number of Lis Pendens, or Law Suits, filed by her Lenders to foreclose and seize the property.

Facing her home being taken at a scheduled auction, she transferred title on January 21st 2009 to Seth Greenberg for $330,000.  The transaction was approved by the lenders which, in return for her cooperation, Lucylla Baynes would receive a letter of satisfaction for both mortgages that would forgive the remaining balances.

If your still keeping score, for the time Lucylla Baynes held title to the property, she LOST $175,000 in home equity or $148.94 for each of the 1,175 days of ownership.  In addition to the loss of her home, she also compromised credit history, making it difficult for her to arrange financing on anything for the next 5 to 7 years.

And as for our new entrant in this saga, Seth Greenberg sold the property on April 16th 2009 to Jahir Harris for $550,000, in which Mr. Harris took out a mortgage for $440,000.

Seth Greenberg made a quick $220,000 during his ownership of 2415 Dean Street.  A mere $2,391.30 for each of the 92 days he held title to the property.

* This post originally appeared at http://mybrooklynreport.wordpress.com/2009/05/19/how-profitable-can-the-foreclosure-crisis-be-act-ii/

2415 Dean Street, Brooklyn, Flipping, Home Equity, Lucylla Baynes, Ocean Hill, Predatory Loans, The American Dream, Wealth