You’ve heard plenty of stories about foreclosures, but the latest victims of this brutal recession are about to lose their cave. That’s right. For nearly five years, Curt Sleeper and his family have lived in a cave. His mortgage is about to come due and, like millions of other Americans, he can’t refinance.
So now, the 17,000-square-foot, subterranean home is being auctioned off on eBay. Sleeper and his wife Deborah bought the cave outside St. Louis in May 2004 for $160,000. To pay for it, they sold their old home, TV and even the DVD collection. They made a 50 percent down payment and borrowed the other $80,000 from the seller. It was a five-year loan with a single balloon payment at the end. The Sleepers now have until May 1 to pay off the remaining $83,000 or sell the property. It’s not a foreclosure sale yet, but if they can’t come up with the money, they risk losing the house.
Besides the initial $80,000 payment, Sleeper said he spent another $150,000 on renovations to the cave and the surrounding 2.8 acres he owns.
The original plan was to refinance. But Sleeper, a self-employed computer consultant, said banks struggle to appraise the cave since there aren’t any comparable properties nearby or, well any comparable properties at all. So while he might have received a loan two or three years ago, today he is in a bind.
“Right now, banks are not interested in anything odd,” Sleeper said.
I mean… how cool is that?
Perhaps they should have been saving for the balloon payment for the past 5 YEARS!!!
What morons. Kick ‘em out, and demolish the home, and make sure no one ever loans them money ever again.
80,000 over 5 years or 60 months in rough terms is 1300 per month (rental) for 17,000 square feet?
Seller gets his house back. Buyers had a good deal for 5 years.
I don’t see a big deal one way or the other. Yea, he should have reserved the balloon payment rather than spending it on renovations. What a dope.
That’s one helluva grotto, 17,000 sq/ft. Maybe Playboy could do something with it. Maybe Budweiser could sponsor it. heh
They owed the seller $80,000 originally, but now have a balloon payment of $83,000. Who was the seller and how could they afford to carry this guys note for so long?
With a 50% down payment 5 years ago he should have easily been able to get financing through the bank. If he was aggressive he could be facing owning the place free and clear instead of about ready to lose it.
Love the drawing of Joe Biden in the post!
# 4 US said, “With a 50% down payment 5 years ago he should have easily been able to get financing through the bank.”
Not necessarily. He paid 50% of the sale price, not 50% of a banks appraisal price. Given the area of the country, a bank would have probably only appraised it at ~$75K to begin with. He overpaid, waited too long for financing and is now paying the price…
Who knew balloon mortgages would be a bad gamble? Shocking!
I love the idea of a computer expert living in a cave. “have you been living under a rock?!”
“yes, yes I have”
It has a beautiful master bathroom, I love the look of the polished uneven rock.
From the way I read it, he paid 80k for half the property, with 5 years to pay back, or get a loan, for the other 80k.
He still had to build in there, which is the other 150k.
He should have simply paid the property in full, and then finance the materials, with the property as collateral.
If the property is worth 160k, getting 150k loan for the actual building would have been possible.
He just looses his initial cash going bankrupt. He still has his job / health, and one heck of a story to tell by the water cooler.
I understand that Troglodyte First Security Bank is interested in these properties
He sunk $150k into it, on top of the $80k payment. He should have sunk only $70k in to improvements and paid off the note.
He was betting on flipping it, or doing a refi. He lost.
There is the possibility that the note holder might refi too. After all, (a) there is a good chance that he might not get anything and will have to foreclose and then find someone who can buy it. (b) Even if the note is paid, where is he going to find an investment that pays anything close to inflation?
If I held the note, I’d consider renewing it. Or at least asking for 20% reduction and then self financing the balance.
He should ask if the interest forclosing has the note, or if it has been split up.
If they can’t produce the note, it’s really more his legally than the banks, and that might be the path to take. Good luck.
BTW, why is it that when a citizen makes a bad bet, he looses his home and his life is ruined, and we have sociopaths on these boards cheering for blood, and yet when a bank makes a millions of bad bets, we bail them out? How does that make any sense at all? I have a lot more sympathy for this guy than I have for a bank with it’s hand out. I bet his bank even took some federal money; fat lot of good it’s doing him.
I wish it were closer as I would consider buying it.
17,000ftsq would make a kickass place to entertain.
#11 – If you make a bad decision you should live with the consequences. I’m not for the bank bailouts, auto bailouts or any bailouts. Citi should fail, BAC should fail, GM and Chrysler should fail. But I’m not the one making those decisions. The monkeys that were elected are making those decisions.
Li… They are here to couterbalance the rest that think the government should bail him out on our dime.
I can feel this families pain on the banks’ inability to find a value on the house. I had the same problem when I was looking at a 4700 sq ft Victorian house with a storefront, enormous enclosed backyard and a three car garage. There were no comparable buildings in the area for the banks to compare value. As a result I did not buy the building, and it is still vacant three years later.
These people basically bought an EMPTY cave that used to be a roller rink. They built a house inside the cave. The house did not exist when they bought the cave. They took a gamble and there is a big chance they are going to loose the house that they worked so hard on. I am pretty sure they knew the risks. They own their own business, so they are probably familiar with investment risk.
I wish them luck, as its going to be really tough for them to get the funds from the banks these days.
I have no empathy for someone who can’t refinance out of a balloon payment. Either he paid too much, or his credit’s too bad. In either case, it’s the owners’ fault, not the lenders.
Just the right kind of place to hole up and wait out the apocalypse…
Shorter James Hill;
“I have no empathy”
Indeed.
I wonder if the savings on heating/cooling outweigh the light bill?
Not to defend this extravagant loan arrangement but.
“Right now, banks are not interested in anything odd,”
The same situation could apply to someone who bought one of those decommissioned missile silos. And setup living underground. They were probably appraised high, at one time. But now the banks think they’re lemons. Even so, they still want the loan paid off in full. Though the value of the property, it was for, has tanked.