Anyone had the chance to attend a trustee sale in El Cajon?

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Submitted by socrattt on July 31, 2008 - 8:33pm

I had the opportunity to catch a number of auctions down at the courthouse in El Cajon. I am not so sure this housing market is anywhere near the bottom after what I saw yesterday.

There were so many homes at the auction and as far as I could tell not one sold, which means many more foreclousers. Not to say this isn't expected I just didn't think I would see so many of these going back to the bank. The scary thing is I think they have a few of these auctions a week, which means this inventory is going to continue to skyrocket in the county.

Again, I know this is old news, I just don't see it being possible that we are anywhere near the bottom!

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Not to be a tool but why
Submitted by urbanrealtor on July 31, 2008 - 11:20pm.

Not to be a tool but why would anyone want to?

I have not been to one but really, it has been my understanding that generally the bidding starts at the price of the defaulted loan.

Unless a place is truly right side up (which seems rare these days), most auctions seem like a bad idea. There is no title insurance that I am aware of or any inspection regarding liens or condition.

Let me know if I am wrong. This is just my understanding.

Actually sometimes the
Submitted by SD Realtor on July 31, 2008 - 11:28pm.

Actually sometimes the bidding does start under the loan value. Most people attending the auctions are professionals and are very good at what they do. They already have done the needed homework including checking for clouds on title, etc... Sometimes the lenders have given instructions to the auctioneers regarding the bidding process as well.

SD you have to admit that the
Submitted by temeculaguy on July 31, 2008 - 11:48pm.

SD you have to admit that the overwhelming majority of these are just a ritual and not a true auction. Urbanrealtor is right, if the property was worth more than the loan, it would have sold before this stage and the pros can certainly negotiate with the bank before this stage. I have been to them in the past but not on purpose, just happen to be at the courthouse when a uniformed deputy came out to the actual steps downtown and read a script of sorts out loud, a few were gathered around, nobody bid, he walked back in. He didn't even appear as if he was looking for bids like an auctioneer would as if he would be shocked if someone bid. I kinda laughed, I didn't think they actually did it like that, it had a real "town crier" Ancient Rome feel to it. But a lot of court things have rituals that don't change much, except for powdered wigs, it's pretty much the same as it was a hundred years ago.

TG I know of someone on this
Submitted by SD Realtor on August 1, 2008 - 9:29am.

TG I know of someone on this board who recently purchased a home at auction. The home that I fell out of escrow at 4 weeks ago in Scripps Ranch was also a home that was purchased at Trustee Sale by an investor. A home that is in escrow on New Rochelle in 4S was also purchased at trustee sale by investors.

No admission at all. While the reality of the situation is indeed many/most of the homes at trustee sale do go back to the lender it is indeed a fallacy to think that all of them do. If you think about it, if the lender does a thorough analysis of the particular home at the auction and finds the market has depreciated much more then a lowball offer from an investor at auction, it makes much more sense for the lender to take his lumps at the auction then to foreclose and risk an even greater loss when the property goes REO.

Do you see what I am saying?

It is all just numbers dude.

Is it not just a matter of
Submitted by gdcox on August 1, 2008 - 10:41am.

Is it not just a matter of accounting convenience . ( I ask out of ignorance)?

When a property (notionally) fails to sell at loan value 'on the steps', the bank can value it at a penny under the loan value on its books for a period .

If there were a true auction, they would have to show the difference between loan value and true forced sale value proceeds for the next quarterly results.