'Real Housewife' Short Sale in the O.C.

Sometimes the reality of high-flying finances even hits reality TV stars. Being a blond bombshell on Bravo TV's "The Real Housewives of Orange County" didn't prevent celeb housewife Tamra Barney from facing real estate woes. Barney, like many other divorcing spouses and those in financial difficulties, just sold her Ladera Ranch home for much less than she paid for and borrowed against it.

In 2005, Barney and her then-husband Simon paid $1,320,500 for the house and then borrowed another $200,000 for improvements such as a saltwater pool and spa, for total investment of $1,520,500. According to TheOrange County Register, the house sold this week for a reported $1.12 million.

Rather than walking away from the home or declaring bankruptcy, Barney listened to the advice of her real estate agent Marcos Prolo of Berrington Properties and worked with her lenders to negotiate a short sale -- thus preserving her credit standing.

Although the process took more than nine months, the lenders agreed to accept approximately $400,500 less than what the Barneys owed. In the O.C. these days, short sales are not uncommon, says Prolo who finds that 70 percent of his real estate transactions are short sales.

What happened to the high-flying O.C. housing market?