June
2007
Realestatejournal.com Reports
An auction of nearly 100 foreclosed homes here Saturday showed that mortgage lenders are having to accept huge discounts in some cases to unload such properties.
• The Situation:
Surging foreclosures over the past year or so have left lenders with a rising backlog of homes.
• The Strategy:
Some lenders are turning to large-scale auctions rather than the practice of relying on real-estate agents.
• The Consequence:
Mortgage lenders are finding they must accept big discounts in some cases to unload properties.
A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes. Rather than relying on real-estate agents, the usual practice, some are turning to large-scale auctions to speed up the sale process.
Real Estate Disposition Corp., the Irvine, Calif., company that organized Saturday’s auction of lender-owned homes, plans similar sales May 19 in Los Angeles and May 20 in Riverside, Calif.
At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.
A four-bedroom home in Oceanside, Calif., attracted a high bid of $495,000 at the auction, 33% below the sale price recorded in November 2005 for the property. One condo in San Diego sold for $120,000, less than half of its previous value.
Jeffrey Frieden, chief executive officer of REDC, called the auction a success. About 90% of the homes offered were sold, he said. Some deals fell through because buyers couldn’t qualify for financing. He estimated that 1,000 bidders attended the sale in San Diego’s Convention Center, where REDC workers in tuxedos shouted and whooped in the aisles to fire up bidders.
Related Articles:
Sponsored By:
- No sponsors for this posts.
Discussion 
Leave a Comment
Speak Your Mind
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
