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Is it strange to default after 9 years? House was purchased for $490k in 2006, now listing at $425k. Even if the mortgage was 95% and $465,500. The balance should be roughly $400k now.
It is crazy to think that the mortgage payment was $2790 (2006 $) a month 9 years ago. Now with a 5% down, the payment is $1920 (2015 $). $2790 (2006 $) is the same as $3480 in 2015 $ assuming 2.5% inflation rate. So the payment was 80% higher.
You don't know how many times the owner refinanced and possibly rolled closing costs back into the loan each time and all that does is continue to raise the financed amount and takes equity away when they sell.
OP- Do not overthink this. Whatever is going on with the seller has no bearing on you. If you want to buy the place just worry about your financing. Whatever mess the seller is in is his/her problem, not yours.
If your curious about how many times they have refinanced it you simply need the owners name. You cant look it up on online property tax records due to silly California internet laws, but you can look it up in person at the orange county tax collector office or city hall.
Next, visit the registry of deeds website with thier name and research it.
None of this will help you negotiate the price, because they priced it at what they want to sell it for. But it may help you understand why they cant go lower if they owe too much.
Be more concerned with the health of the condo than the seller's motives.
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