ORANGE COUNTY IN BANKRUPTCY : A Few Home Buyers Are Seeking a Way Out Too : Repercussions: They fear they could be walking into tax increases or cutbacks in public services resulting from crisis.

Fed up with urban life, the Greenwalds scouted Orange County’s waterfront for years looking for their dream property. They finally decided on an apartment building in exclusive Huntington Harbour.

Then came Orange County’s bankruptcy filing a week ago--and the Greenwalds got nervous, very nervous. With upward of $400,000 at stake, the couple halted escrow on their purchase.

“It was a traumatic decision,” said Alicia Greenwald, 39, who had planned to move her family from an expansive earthquake-damaged home in Glendale. “I had to call the bank and stop the check.”

Already, a few home buyers like the Greenwalds are having second thoughts about Orange County’s real estate market until the crisis over the county’s bankruptcy filing--and the continuing financial uncertainty--has passed.

Buyers fear the bankruptcy could cause an increase in taxes or a reduction in public services to cope with the estimated losses of more than $2 billion from the county’s investment pool, which was valued at more than $20 billion earlier this year. That, in turn, could affect the value of their new homes.

“The full repercussion of the bankruptcy is just starting to come out,” said Lionel Punchard, president of First Republic Mortgage Corp. in Santa Ana. “There are a lot of things (possible) as a result of bankruptcy. The home buyer does not yet know the effect.”

Real estate agents echo those sentiments, saying that they are receiving phone calls from earlier clients wondering how the debacle will affect home values.

“I’ve had calls from people asking my opinion. . . . There is some concern whether property values are going to be negatively affected. But my opinion is, I don’t think so,” said Gil Thibault, an agent for the Grubb & Ellis real estate office in Laguna Beach. “I told them I thought (the impact) was minimal, that the economic recovery is progressing very well and expectation are strong for 1995.”

Some buyers, however, have already balked at making new home decisions in Orange County.

David Cortens, a real estate broker specializing in properties at Capistrano Beach, said he has already had one client postpone purchase of a $900,000 vacation home because of Orange County’s petition for Chapter 9 bankruptcy protection.

“He said he was concerned about the effect on real estate and real estate taxes,” Cortens said of the client, an Orange County lawyer whom he declined to identify.

“I tried to convince him that, although it is a large amount of money on a property . . . there would not be that much effect,” said Cortens, adding that he believes rising interest rates and the rebounding economy’s effect on home prices would be more detrimental than the bankruptcy.

Alicia Greenwald said she expects to wait at least a month before wading back into the Orange County real estate market. She said she is eager to move because she is frustrated with crime in Glendale; her 10-year-old daughter was mugged during a school Halloween carnival. She says she also wants better public schools.

After much searching, the Greenwalds decided on a four-unit apartment building. They planned to live in one three-bedroom unit and rent out the others.

“Now I’m risking losing our beautiful apartment, but you can’t take your family into something that is the same situation you’re in,” she said, explaining that she fears the financial crisis could lead to a lowering of public services or school quality.

The decision was hurried. On Dec. 2, Greenwald and her husband, a doctor who practices at Kaiser-Permanente in Bellflower, had presented their real estate agent with a $10,000 escrow check.

But when she picked up the newspaper the following Wednesday and read about Orange County’s bankruptcy filing, Alicia Greenwald said, “I almost passed out . . . .”

“I circled everything with three colors of pencils. I took it to my husband and made him get up and read it. I literally put cold water on my face. He said: ‘Oh, my gosh! We have lived through this before.’ ”

And indeed they had. The Greenwalds resided in New York during that city’s financial crisis in the mid-1970s. She said they saw the repercussions and service cutbacks firsthand.

Still, Alicia Greenwald admits that the pull to move may be too strong to resist. “My heart really wants to be in Orange County,” she said.

* CRISIS EXPANDS

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