Foreclosures tend to be worth exactly what you pay for them; or less, but certainly not more

The "carriage house" (garage with maid's quarters) is to the left, the uninhabitable main house to the right.

The owners of 18 Dwight Lane (way up off John Street) paid $1,359,750 for it after the previous owners had been foreclosed, redid the floors in the maid's quarters above the free-standing garage, left the wreck of the main house untouched, and put it back up for sale last November for $2.1 million. Today, that price has dropped down to $1.495 million with, I suspect, plenty of falling room still to go. (Previous listing, with additional pictures, here.)

It's common for buyers of bank-owned property to think they've purchased at a discount, but in my experience, that usually proves to be delusional: by definition, they've paid more for the property than anyone else was willing to. When you're sitting around the poker table and can't figure out who the chump is ...

Speaking of chumps, though, how about U.S. taxpayers? The foreclosed owners were given a $6,289,900 mortgage on this place in 2006 from, of course, Countrywide (though Wells Fargo did kick in a bonus second mortgage of $250,000 at the same time). That was for a ruined, 1960 contemporary and 4.5 acres in a most undesirable area of town. Countrywide's appraiser, its lending officer and that officer's manager must all have been in on this scheme, but so far as I know, no one, including Chris Dodd and his pal, Countrywide's CEO Angelo Mozilo spent a single day in jail. 

a little bleach on that diving board, replace the deck and gazebo, and bob's your uncle

And perhaps a new driveway