Monday, September 25, 2006

An Auction In Tucson

The Arizona Daily Star reports from Tucson. "Mortgage experts and real estate watchers are concerned that a wave of foreclosure proceedings is building as consumers battle rising energy costs and interest rates. Some may need to refinance as adjustable-rate mortgages and other forms of creative financing mature."

"In Arizona, 2.4 percent of the approximately 1.1 million mortgages were in some stage of delinquency during the second quarter of this year. Less than half of 1 percent of all loans had actually entered foreclosure proceedings."

"Barbara Sherrick and her husband, Bruce, live in the house east of D-M that was auctioned off Wednesday. She said she and her husband had found themselves in financial trouble more than a year ago when Bruce felt obligated to quit his job because of an ethical concern."

"Sherrick and her lender, Countrywide Home Loans, worked out a repayment plan to get caught up on payments. The plan didn't hold. 'It was just too hard to keep,' Sherrick said. Perhaps too late, Sherrick said she and her husband considered selling the house and pocketing the equity, but that seemed too difficult."

"She said she did get some offers from 'vultures' who wanted to buy her house at a reduced price. She turned them away. She didn't know her house was going to be auctioned on Wednesday. She heard about it only the day before because a private lender came to her front door and informed her of the pending auction."

"'They don't tell you. They just let it happen,' Sherrick said. 'That's really sad.'"

"Auctioneer Francis opens the bidding at $70,289.16. There's no yelling or holding up signs. Some bidders hold up a hand and seem to grunt. Bidders sort of step in and out of the bidding. Helen Meadors, an associate broker, bids $73,500. Bidders bump up the price by just $100 or $200. The pace picks up as Jeff Katz, a lawyer with a private practice in Tucson, bids $76,000."

"There's more volley back and forth, and Meadors ups the price to $79,000. Katz ups the price to $81,000. There are pauses in the bidding, and a couple of 'last calls,' when it appears the sale will be finalized, then the bidding catches fire again.
About 30 minutes in, Ali Jiha of G&G Financial bids $117,600."

"Soon after, Jiha says he paid too much for the property. Says Jiha: 'Sometimes we get emotional. We get into the bidding thing.'"

"Jiha needn't worry, after winning the auction, he lost the property after all.
The private lender who came to Sherrick's door offered to buy the house. Sherrick will now pay rent on her home for a year, when she will have the option of buying it back."

"Jiha said the auction was scuttled because the trustee gave the wrong instructions to the auctioneer. All that bidding resulted in an invalid sale."

"In Pima County, 2,978 properties have been at some stage of foreclosure proceedings in the first eight months of the year, according to a private data company. That's a 9.2 percent increase over the 2,726 homes entering foreclosure in the first eight months of 2005."


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