Courthouse-step auctions offer 1,336 properties in foreclosure -- 17 are sold

[Newsjock]

Source: Modesto Bee

Another foreclosure record was set in November as 1,336 properties were offered to the highest bidder on the courthouse steps in Modesto, Merced and Stockton.

Now here's the real surprise: Only 17 of them sold, despite lenders offering deeply discounted prices.

... Of the 419 Stanislaus County homes that went to foreclosure auctions in November, only eight attracted bidders.

On Friday, O'Toole said, a foreclosed five-bedroom Modesto home on Hemstead Avenue went up for auction with a starting bid of $301,500, even though the lender was owed $537,000 from a delinquent mortgage.

Read more: http://www.modbee.com/local/story/152921.html

[JDPriestly]

1. The rich are going to now find out that the rest of us don't have any money.

$300,000 is too much to pay for a house if you are only earning $35,00 or even $50,000 per year. My neighbors and I have been wondering how in the world ordinary people buy houses for $500,000. Now we know. They don't. The mortgage companies will soon learn the hard facts. People have to earn money in order to spend money and buy houses.

[cstanleytech]

10. Yeah but like usual

the ones who made the decisions will probably not pay for it.
There are honestly times I kinda think we need to consider trying the french solution in regards to the rich.

[Delphinus]

14. What's the french solution?

Are we talking Marie Antoinette?

[cstanleytech]

15. Oui, oui. NT

[tuckessee]

16. So you want to kill rich people.

Please define "rich" & tell us if there any other groups/classes you seek to murder?

[cstanleytech]

17. Ken Lay is a prime example

of the type of rich people I am mainly refering to and I said I only felt like it at times.
Logically though I know we cant do it but it does not mean I cant think about it from time to time so relax you are perfectly safe.

[mitchum]

23. Roll, tumbrils, roll

I'm with you

[LanternWaste]

18. I think the FDR solution would be more...

I think the FDR solution would be more peaceful, much more legal, and actually solve the problem rather than putting it off for another generation or two...

[Hekate]

2. Lenders would be a damn sight better off readjusting the mortgages & letting the buyers stay put...

I hope predatory lenders learn this the hard way. Too many people are about to be rendered bankrupt and homeless.

Hekate

[annabanana]

3. The predatory lenders aren't the ones who are taking the hit..

They unloaded all that bad paper almost immediately.

[Bozita]

8. Right! The predatory lenders are still advertising. Turn off your spam filter and see.

Who the hell is buying their paper?

[JDPriestly]

11. You are so right!

[1932]

13. Lenders make their money from interest on money lent, so they're better off when people have zero

equity, and, therefor, have the biggest loan possible and are paying interest on it. How do you achieve that? By churning these houses to another buyer who gets the biggest loan possible, defaults after paying for a little while, and sells it to someone else who takes out the biggest loan possible. They also make money on fees too, so turnover is very profitable for them in every respect.

[williesgirl]

4. Good. I hope nobody buys them in any city. Let the mortgage bankers sit on them, maybe it'll teach

them they should readjust rather than foreclose. rec'd

[Sen. Walter Sobchak]

5. It isn't that unusual for properties not to sell at the auction

The forclosure auction of late night infomercial lore is pretty rare.

[customerserviceguy]

9. True

I used to work in title insurance back in WA state, and went to the courthouse to 'cry' several foreclosure sales back in the 1990's. The lender would 'bid' the amount of the outstanding mortgage, plus accrued interest and costs since the default, and they would routinely be the only 'bidder'. Then, they would turn the place over to the company that had mortgage insurance on the place, and that company would put the place back on the market for whatever they could get.

There's going to be a lot of stuff on that market, depressing the prices for everybody who owns property, I saw it in the early 80's, its coming again.

[happyslug]

20. That is my experience in Pennsylvania, the question then become why are the banks NOT bidding?

The only time a bank holding an outstanding mortgage on a house will NOT bid what is owned to them on the mortgage (Plus any fees to file the Foreclosures, for example court Costs, Sheriff's Costs, attorney's Costs) is if the property is worth LESS then what is owned to the bank. If the house is worth more than is owned the bank, the bank bids what it is owned, pays itself, and sales the property through a Realtor. Others can outbid the bank (And do occasionally if it is a real bargain) but that is rare (Most people who have made substantial payments, can either borrow more money on the property. sell it themselves or otherwise make good on the Mortgage so rarely are sold at Sheriff's sale).

My point is in this sale the vast majority of the homes were viewed by the banks themselves as being worth less then the Mortgage on those homes. This is BAD, and almost no one is reporting it.

[ohio2007]

6. Bankers should offshore to Afghanistan

"New Kabul" is going up looking for citizens willing to mortgage their futures



Afghans primed for mortgage revolution

Some 20km north-east of Kabul, a unique experiment in housing and city planning in Afghanistan's history is under way.

The government is building 20,000 homes - a mixture of apartments, row houses and commercial property - which it plans to mortgage to people. The 2,500-acre township will be called New Kabul.

For a country which lost 33% of its homes during a quarter of a century of war, housing millions of local and returnee Afghans from the refugee camps of Pakistan and Iran is one of the biggest challenges facing the government in Kabul.

snip

http://news.bbc.co.uk/2/hi/south_asia/6226962.stm

in the meantime, real estate bubble bursts on the west coast. the trend should sweep the country. Mortgages companies will go belly up

[riqster]

7. An overpriced foreclosure

...is still overpriced.

[1932]

12. When you buy at auction, you take subject to all outstanding liens.

So, if there are mortgages on top of mortgages and tax liens, you have to pay them off even if you don't know about them when you make your bid.

You really have to do your research on the property before you bid on it. And I think when prices are falling and banks lent much more than the house was worth, a lot of these auction properties will have way too much debt attached to them. You're better off waiting until the bank sells them.

[Hugin]

19. Not to mention (around here) you're responsible for the appraised property tax...

and not what you actually paid for the property.

[happyslug]

22. The Banks have to buy them first.

That is why Sheriff's sale occurs, the Mortgage holder is asking the Sheriff to sell the homes to any bidder so that the Mortgage can be paid out of the proceeds. I do not know California Law, but in my home state of Pennsylvania if the first lien holder (i.e. First Mortgage holder) forecloses on the property, that wipes clean ALL OTHER LIENS (except for Taxes). "First in Time is first in Right." Thus it is First Mortgage holders who bids on property the First Mortgage holder is foreclosing on. They get the property free and clear. Second Mortgage holder gets the property subject to the First, Third Mortgage holder gets its subject the the First and Second Mortgages.

If Judgment liens exist, First in time is first in right. i.e. if Registered in he Court house, a lien on the property based on when it was first filed. No bank will file a Mortgage unless all such liens are first wiped clean i.e. paid off. Thus it is rare to have a Mortgage behind a Judaical Lien (But it can happen).

My big concern is why did NONE of the Banks make any bids? The only Answer is the Banks believe the property is worth LESS than the First Mortgage. If that is the case the bank with the First Mortgage generally bids what the property is worth, but apparently the banks do NOT know how much the property is worth, so no bid was made. This is more frightening them anything else. Generally if property is worth less than the First Mortgage, the First Mortgage holder bids what the property is worth (Or what it thinks the property can be sold for). The action of NO BIDS, implies the no one knows what these houses are worth, and that is frightening.

[ckramer]

21. If they started the bid at $200,000, it would be more realitic to get rid of

these houses quickly...