Every Friday morning at 10:00 AM, Trustee Sales are held in various locations throughout the county. Phil Leng, one of my students, invited me to attend the foreclosure auction with him this Friday at 3535 Factoria Blvd SE, Bellevue outside of the south entrance to the Northwest Trustee Services building. I’ve been hearing rumors that banks are discounting their own opening bids right at auction and I want to check this out.
If you’ve been following along with Craig Blackmon’s foreclosure series, this means the amount of money owed to the bank, plus expenses, is the opening bid. Bidders show up with cashier checks, receive a bid number, and typically bid UP from the bank’s opening bid. During the height of the bubble run up, there were multiple bidders bidding the final price way up. The rumor is that some banks or lenders may now be opening the auction at a bid price lower than their cost. I have heard of this happening in other states such as California, but not in Washington state.
I’ll be there tomorrow. If you want to come and join me, I’ll be the one with a video camera recording as much as I can for a new class I’m writing.
Jillayne, that should be very interesting…how about Tweeting in one had w/a video camera in the other? 😉 I’m looking forward to hearing about your experience.
Hi Rhonda,
I think I’d better just focus on the video. Phil says there are lots of investor groups that swarm around, handing out packets of information about how to invest in foreclosures. I just got Direct TV at my house and I’m amazed at how many late night infomercials there are on “buying foreclosures.”
In the last 10 years I have been to at least 100 of these auctions. You will be far more entertained for 120 minutes seeing Sunshine Cleaning at the Factora Cinema then grab some Thai Kitchen!
Just pray it doesn’t rain!
Hi Ray,
Oh, I’ve been before. Yes, at times it can be quite boring. I’m there to film and talk to the people as well as the auction. Odd that you mention Thai. I’ll be joining a friend for Thai right afterwards!
Hi Everyone,
I had a great time at the auction. Phil Leng introduced me to three different investors who head their own investment groups, I also met a blogger from SB, and had a chance to confirm the rumor:
YES, banks are discounting their own payoffs. Instead of opening with a bid of the amount due, some banks are posting an opening bid BELOW the amount owed.
Even with a crowd of about 25 bidders, there were still many homes that went back to the bank and about 80 sale postponements.
I got some great video that I’ll be editing for the new class.
Great! I’ll be in your class this Wednesday for the last of the series. I was there on Friday, the 18th of May to see the same group.
See you in Ballard.
This is really a nonissue.
If in fact in 2006 we had between 14% to 17% home price appreciation and there were 100% loans with 80/20s and home prices have gone down 20% that would put the first at full value.
I could ramble about the actual discount of value of the Note, but no one is going to care. It is after all the investors money that is tied up, the ones who now own the Note.
The auctions went sideways over a year ago. If in fact the opening bid is only now coming in less than owed that would indicate a grave problem in the foreclosure system.
Countrywide spokesman Simon said loan modifications and short sales are complicated because the loans were sold to investors, who must agree to take a loss.
This was in an article about Seattle foreclosures. Investors can be any entity. Some of those entities are in the Real Estate business.
My concern has been that in this foreclosure process there may be some manipulation of the inventory. I don’t see a lot of REOs out there compared to the number I think there should be.
I had that feeling a year ago, and now with the foreclosure moratorium over It seems there should be a lot more inventory out there.