[El Gato]

They probably used up their capital starting a new business and weathering the last downturn

That may be where the discrepancies in the Mortage payement, selling and purchase prices of their house come in. They may have refinanced or taken a second mortage to help fianance his buisiness. If so they wouldn't be the first people to do that.

[dogbyte12]

You couldn't even buy a gardener's shed in the part of L.A. I live in for $187,000... but we make do, on less than $100k a year.

I hate to be judgemental here, but if you are making in a year, nearly the price of your home, you should not be in such trouble.

If they put 25% down first, on the $114k, they would have only needed an 88k loan. Pay off $1,500 a month on that, and even with interest, they would be free and clear in under 10 years.