Monday, April 30, 2007

An Auction Opportunity In California

The LA Times reports from California. "Many see trouble in falling home prices and rising foreclosures. Karen Krynen sees opportunity. So after dropping her two children off at preschool one day last month, Krynen headed for Los Angeles County Superior Court in Norwalk, where foreclosed houses were being auctioned on the steps outside.

"The two dozen or so bidders, mostly men, whispered into cellphones, tapped into databases from their laptops and juggled clipboards loaded with documents and printouts. No one seemed particularly friendly."

"'I walked up and thought, 'Oh no, this is what they do for a living,' said Krynen, 42. 'They knew what they were doing. I kind of hoped that nobody else would be around.'"

"There were 5,977 foreclosed homes on the auction block in Southern California in the first three months of the year, up from 711 in the same period last year, according to DataQuick. State law requires these properties to be sold at public auction, which in theory puts everyone on an equal footing. Amateurs such as Krynen, however, face competition from professional real estate investors as well as the lenders themselves, who come to the auctions ready to bid for homes they issued loans for if it appears that the properties can be resold at higher prices."

"The notion of buying a home this way didn't take shape until a few weeks ago, when she came across a website. The site offered a trial subscription to troves of foreclosure data, which are public but not very accessible. Krynen was intrigued. A few mouse clicks later, she found a house about five miles from hers in Whittier. The owners had defaulted on the mortgage and were facing an auction in two weeks. Opening bid: $100,000."

"Krynen figured the four-bedroom home was worth about $800,000 and thought it would be the perfect replacement for the 1,400-square-foot house she and her husband, Jeff, have owned for 14 years."

"But that's about all she can say about it. Although she has driven past the place at least a dozen times, she could never get inside for a good look. That was lesson No. 1 Krynen learned about foreclosures: Buyer beware. You buy property 'as is,' with no chance of a pre-purchase inspection."

"'That scared me a bit, that I couldn't see inside,' Krynen said. But her husband, a professional contractor, assured her that he would be able to mend whatever needed fixing."

"From her online research, Krynen learned that the road to a foreclosure sale in California typically begins when a homeowner misses three mortgage payments. The lender then files a notice of default with the county recorder. If the homeowner fails to pay up in 90 days, the trustee, usually the title company, sets a date for a public auction."

"By long-standing custom, most auctions are held outside courthouses or the recorder's office. Krynen found this aspect of the process especially appealing. 'If it goes to the courthouse steps, there's a level playing field,' she said."

"Neither local government nor the courts play a role, however. The title companies and other trustees hire professional auctioneers to run the sales. It's the real estate equivalent of last rites, making Kyle Speer something of a priest of property. At 10 a.m. sharp each weekday, Speer takes his place on the courthouse steps in Norwalk."

"With his back against the marble wall and his face to the crowd, the professional auctioneer cracks open his leather portfolio, clears his throat and begins the archaic ritual of 'crying the sale.'"

"A 17-year veteran of foreclosure auctions, Speer says he's seen a sharp increase in newbies such as Krynen showing up. Bombarded by questions from beginners, he recently began offering a $200 seminar every Thursday to decode the auction process."

"One day last month, as Krynen stood off to the side taking notes, prepping for the upcoming auction of the Whittier house, Speer kicked off the bidding for the day's auction by reading the property's street address, followed by a long string of parcel numbers, deed numbers and loan numbers."

"'Do I have any opening bids?' he asked. 'Cashier's checks needed to qualify.'"

"That was news to Krynen. Before entering the bidding, you must show the auctioneer a cashier's check good for at least the minimum bid amount. Auction pros carry cashier's checks in varying sums.

"There were six homes on the block this day. They were bought in 2005 and 2006, at the crest of the housing boom, by buyers who financed the entire purchase. That means the homes are probably worth the same, or less, than the amount the buyers owe. No one bid."

"'I get asked every day if there are any good deals,' Speer said. 'Not too many right now.'"

"Homes that aren't sold are turned over to the lender, which can then sell the property however it chooses."

"When there is a bargain, a bidding battle usually ensues, pros say. At 10:30 a.m., after Speer had finished, Travis Toth, an auctioneer hired by other trustees, stepped up to market a foreclosed condominium near La Cienega and West Jefferson boulevards in Los Angeles. The opening bid was $259,592, which was the sum owed on the mortgage plus about $20,000 in processing fees."

"Right away, two men and a woman produced cashier's checks to identify themselves as serious bidders. With cellphones at their ears and hands cupped over their mouths, the bidders bumped up the price in $1,000 and $100 increments. One man worked a laptop too, scrolling a title company's research page on the Internet."

"After 10 minutes of back-and-forth, the auctioneer calmly declared, 'Sold.' The winner handed over four checks in amounts ranging from $500 to $120,000. He politely declined to give his name to a reporter except to say that he had been doing this for 11 years."

"Whatever his identity, he appeared to have scored a bargain. The final sale price was $267,500, more than $100,000 below its estimated value."

Tuesday, April 24, 2007

Filings Continue Record Setting Pace: MA

A press release from Massachusetts. " released its Massachusetts Market Analysis Report for the 1st Quarter of 2007 today, with data revealing that foreclosure filings in Massachusetts continue to escalate at a record-setting pace and reached a new high during the first three months of 2007."

"The report shows that 6,624 foreclosures were initiated statewide during the 1st quarter of 2007 (January, February and March), 76 percent more than the number recorded in the 1st quarter of 2006."

"Over the past 12 months, lenders initiated foreclosure proceedings against 22,342 homeowners, representing an 80.61 percent increase over the same period a year earlier. March 2007 was the 6th consecutive month with more than 2,000 foreclosure filings, indicating no slowdown in historic surge in foreclosures being initiated throughout the Commonwealth."

"'It is clear that tens of thousands of Massachusetts residents are trapped in properties they can no longer afford. They can’t keep up with mortgages payments that are too high, and the downward pressure on statewide housing prices means that they can’t sell the home to pay off their debts,' said Jeremy Shapiro, president of 'With no substantial market turnaround in sight, we expect Massachusetts foreclosure rates to continue at record or near-record levels for months to come.'"

"Highlights of the 1st Quarter 2007 Market Analysis Report include: Foreclosures spiked by nearly 50% in March 2007 compared to March 2006. The increase statewide was 46.78% (2,190 v. 1,492). On average, there were 110 foreclosure filings every business day in March. March was the third-highest month on record, and marked the sixth consecutive month with over 2,000 foreclosure filings."

"6,624 foreclosures were initiated statewide in Q1 2007 (January 1, 2007 through March 31, 2007). Foreclosures jumped 76% higher than Q1 2006 (3,769). Q1 2007 had the highest number of quarterly foreclosure filings on record. This is the 2nd consecutive quarter with over 6,000 foreclosure filings."

"22,342 foreclosures were initiated in the past 12 months (April 1, 2006 through March 31, 2007): Foreclosures increased 80.61% statewide when comparing the past 12 months to the same period a year earlier (22,342 v. 12,370)."

"Barnstable, Worcester and Suffolk Counties experienced the largest increases. Barnstable County experienced a 93% increase (1,084 v. 562), Worcester County had an 87% increase (3,461 v. 1,850) and Suffolk County jumped by 87% (2,434 v. 1,302)."

"In communities with 50 or more foreclosure filings over the past 12 months, the biggest increases were in the town of Dartmouth (241% increase, 92 v. 27), the town of Somerset (194% increase, 53 v. 18), the city of Everett (186% increase, 166 v. 58), the town of Bourne (158% increase, 103 v. 40) and the city of Chelsea (151%, 113 v. 45)."

"In communities with 10 to 49 foreclosure filings over the past 12 months, the largest increases were in Adams (467% increase, 34 v. 6), Huntington (433%, 16 v. 3), Boxford (300% increase, 20 v. 5), Westborough (289% increase, 35 v. 9), and Hardwick (267% increase, 11 v. 3)."

Sunday, April 22, 2007

Auction Horror Stories

The Ann Arbor News reports from Michigan. "Buying foreclosed property is not for novices. 'There are horror stories,' said Special Deputy Jimmy Moore, who auctions off mortgage foreclosures every week at the Washtenaw County Courthouse. 'There have been a lot tears.'"

"He said he knows of a case where a couple bought a house at an auction. Later, it burned to the ground. Because they couldn't insure something they don't yet own, and there's a six- to 12-month redemption period before they take ownership, they lost everything except for the value of the land."

"It's also possible for someone to pay $100,000 for a house only to learn later that the federal government has a $150,000 tax lien on the house, Moore said. Unless the new homeowner comes up with the taxes, he's out $100,000, Moore said."

"Moore said it's important to check on the history of the house at the county's register of deeds, and check with the IRS, a process he admits could take hours, to find out if there's a tax lien on the house. 'And don't buy anything you can't really afford,' he said."

"There aren't many private buyers at the sales, Moore said, because there really aren't many great deals as there were years ago due to the fact that most have little equity."

"Washtenaw County Treasurer Catherine McClary said the sharp increase in the number of property foreclosure inserts in the Washtenaw County Legal News, where the first listing of at-risk properties occurs, verified concerns about an increased trend in tax delinquencies, a leading indicator of fore-closures to come."

"'You would think Washtenaw County would be healthy and immune from some other areas of state, but we're seeing six to seven new insertions every business day. It's a huge amount,' she said."

"Kip Sen of Northfield Township showed up at a recent foreclosure auction, hoping he'd walk out with a new house. He has had his mind on a Dexter Township house since reading about it in a foreclosure notice. After trying unsuccessfully to reach the owners to discuss a preforeclosure deal, Sen showed up early for the county's foreclosure auction."

"The homeowners had come up with the $15,000 they owed on the house, which was then removed from the auction list. Sen says he'll be back. After all, the foreclosure numbers show no signs of abating any time soon."

"'It's like a lottery,' said the Northfield Township engineer. 'If you don't try, you won't get it.'"

Wednesday, April 18, 2007

Redemption Clause In Tennessee

The Jackson Sun reports from Tennessee. "A statement in Sunday's business story about buying foreclosures was not completely clear. The statement said, 'It is important for those buying a foreclosure to have the redemption right' of the seller waived."

"Sally Pate, a local real estate agent who specializes in selling foreclosed property, called Monday to say that while Tennessee is a redemption state, the mortgage holder waives the ability for that property owner to reclaim their property in their deed of trust at closing."

"'One of the few times a redemption clause comes into play is when a property is being sold at the courthouse for unpaid property taxes,' Pate said."

Monday, April 16, 2007

Sheriff Sales In Wisconsin

The Monroe Times reports from Wisconsin. "It's 9 a.m. and Deputy Steve Hoesly is ready to start the auction. Foreclosures of homes resulting in sheriff's sales have increased recently, from 10 in 1997 to 58 in 2006, according to statistics from the Green County Sheriff's Department. The highest number in a given year was 67 in 2005."

"Locally, auctions generally are held in the basement conference room of the Green County Sheriff's Department. But the room is occupied, so Hoesly conducts the sale in the employee break room. Beth Luhman from the Green County treasurer's office joins him, a representative from the office always sits in on the sales. Any back taxes owed on the property will become the responsibility of the new owner."

"On this Tuesday morning, there is one written bid for the property, and it's from the current owner of the house. He has bid about $7,000 more than the amount of judgment against him. If just one person steps forward and offers one cent more than that, the property would be theirs."

"But no one else shows up. With little ado, the bid is declared the winner."

"It's not always this simple, Hoesly said. Sometimes, third-party buyers, or individuals who aren't representing either the mortgage holder or the homeowner, show up at sheriff's sale to bid. Once in awhile, there will be active bidding."

"Hoesly is quick to point out he's not an auctioneer. He's a deputy with 23 years in at the Green County Sheriff's department, the last six in civil process. State statutes dictate the local sheriff's department conduct sheriff's sales in foreclosure cases. Civil process also handles evictions, small claims matters, restraining orders and the occasional vehicle repossession."

"After the sale, the buyer is required to provide 10 percent down on the property. A real estate transfer form then is filed and a confirmation hearing before the judge makes the property transfer official."

"Stereotypes about foreclosed homes sold at public auction aren't always true. The homes sold, for example, aren't necessarily run down or abandoned. 'There's all kinds of homes,' he said. Some are in poor condition, others are 'quite nice.'"

"Nor is it always a great deal for potential buyers. Lenders often will submit a bid to make sure a property doesn't go too cheaply. And because homes in foreclosure aren't open for inspection before the sale, buyers don't know what kind of repairs may be needed."

"'Sometimes, you get a good deal, sometimes not,' Hoesly said, adding he doesn't have any information about the home or its condition. 'I just post them,' he said."

"Often, homes at auction still have people living in them until a sheriff's sale and confirmation hearing. Because of that, Hoesly warns interested buyers not to trespass to get a better look at the property. 'I tell them if you go up and peek in windows, you do so at your own risk,' he said."

"Once in awhile, the homeowner will attend or contact Hoesly to find out the auction's result. But they usually aren't emotional about it, he said. 'When it gets to that point, they pretty much figure it's done,' he said. 'A lot of times, it's a relief.'"

Wednesday, April 11, 2007

Area Foreclosures Ranked

A report from the LA Times. "The congressional Joint Economic Committee released a report today detailing the local impact of high-risk sub-prime mortgages and foreclosures. California ranked 14th in the nation for foreclosures per household last year, one for every 86 households, according to RealtyTrac."

"Colorado's foreclosure rate was the highest, one per 33 households, followed by Georgia, Nevada and Texas. The average national foreclosure rate was one per 92 households."

"Among metro areas, Detroit had the highest foreclosure rate last year, with 40,219 total foreclosures, followed by Atlanta, Indianapolis, Denver and Dallas, according to RealtyTrac."

"Two California metro areas made the top 20. Stockton ranked 11th with 5,153 foreclosures, one per 37 households. Riverside-San Bernardino-Ontario ranked 13th with 30,255 foreclosures, or one per 39 households."

"The report also found that: The Rust Belt, Sunbelt and Colorado saw the highest number of foreclosures in 2006, with 60% due to sub-prime loans, despite the fact that such loans are only 14% of the total outstanding mortgage debt, according to RealtyTrac."

"Overall, 1.8 million hybrid ARMs (30-years adjustable rate mortgages with low teaser rates that often reset after two or three years to much higher rates) are expected to reset 2007 and 2008. Half of sub-prime borrowers over the past two years provided limited financial documentation and 90% overstated their income."

"Foreclosures this year are on track to match or surpass the 1.2 million in 2006, according to RealtyTrac."

Monday, April 09, 2007

Foreclosures "Spike" In New York

The New York Magazine. "Maybe you’ve read the sad stories about all the adjustable-rate mortgage casualties who are losing their homes, and thought: How terrible! Can I get one for cheap? The answer is a qualified yes. The past three months have seen a 56 percent spike in foreclosures over late 2006. Most are in Queens, but the current list of delinquents includes a small yet surprising number in Manhattan. Yes, you’ll be profiting off someone’s bad luck, but how else can you get a home for a third below market value?"

"Just don’t expect to find one on a breezy Sunday jaunt with an agent. There are no open houses, no walk-throughs with inspectors. If you purchase at auction, you’ll be up against full-time investors—a scary bunch with years of experience. If you win, you must put down 10 percent immediately, with the rest due 30 days after. All this without even being able to peek inside."

"'It’s like Deal or No Deal; you open that suitcase to see what’s inside,' says Jessica Davis, who teaches foreclosure buying. 'You take a chance for the thrill of it.'"

"Still want in? First, some basic jargon. After three missed mortgage payments, a property will go into lis pendens (lawsuit pending), meaning the creditor, usually a bank, has put the owner on notice. The time from lis pendens to the auction block is up to a year, during which time a foolish homeowner will remain in denial and a smart one will try to sell."

"The challenge for you is persuading him to do so. If the mortgage remains unpaid, the bank will swoop in, foreclose, and sell the property at auction. (Upcoming sales are listed on the same Websites that supply lis pendens data.) There’s a fair bit of sleuthing required before you bid—interviewing neighbors and doormen, perusing title history (through the city’s database, acris, .gov), checking for violations on the Department of Buildings Website, and finding out how much similar homes are selling for. Experts advise bidding 20 to 30 percent off that price (you have to assume it’s a wreck)."

"A common mistake is not doing a full accounting of liens, outstanding mortgages, and other debts, which are detailed in a file available at the courthouse three weeks before the sell-off. At a recent Brooklyn hearing, one eager newbie outed himself by bidding $180,000 for a house worth about half a million—except he’d failed to note the $400,000 mortgage he’d also be responsible for. (He later chickened out.) And never get so whipped up that you overbid."

"'You can’t get emotionally involved,' says Wesley Barney, who’s been buying and selling such homes for seventeen years. 'I’ve seen that happen plenty of times, even to me. But there’ll be another sale next week.'"

Friday, April 06, 2007

Lenders Hold Thousands Of Homes: D/FW

The Dallas News reports from Texas. "Foreclosure signs are popping up in front of thousands of Dallas-Fort Worth homes for sale this spring. 'I'm finding more of them when I look at the listings in a neighborhood for comparable prices,' said Carrollton real estate agent Wendy Hulkowich. "The foreclosure market is definitely affecting our listing price comps.'"

"Last year, lenders foreclosed on more than 18,000 homes in the D-FW area, according to research by Foreclosure Listing Service Inc. During the same period, about 38,000 single-family homes were listed for sale in the multiple listing services. Currently, about 6 percent of the MLS listings in North Texas are identified as former foreclosures. But those numbers don't include nearly all of the repossessed properties, agents say."

"'I think the price impact will start showing up this year,' said James Gaines, an economist with Texas A&M University's Real Estate Center. 'In subdivisions where foreclosures may run as high as 20 percent or more, we can anticipate not just a slowdown in price increases, but price declines and perhaps significant – greater than 5 percent – price declines.'"

"The good news is that unlike the late 1980s slump, home foreclosures haven't been concentrated in particular areas of the city. A study of April's foreclosure postings shows a wide distribution of homes facing forced sale."

"But if home foreclosures continue to rise, they are up 15 percent so far in 2007, the resale of these properties will put a damper on home appreciation. That's more likely to be the case if lenders decide they need to more quickly unload the thousands of homes they are now holding."

"So far they aren't dumping foreclosures, agents who sell the properties say. 'They are cutting prices, but so far not a lot,' said Connie Zetterlund, a Dallas residential agent who specializes in sales of foreclosed homes. 'But because of what is in the pipeline, I think we will be seeing some price cuts. When a neighborhood has so many foreclosures, they have to do something to sell the properties.'"

"Getting the homes out of their hands takes time. Agents said that it can be two to four months after a property is sold at foreclosure before it comes up for sale. 'They are hanging onto the properties longer,' said Ms. Hulkowich. 'They are overpriced. Once in a blue moon you can actually find a good deal on a foreclosure property.'"

"She estimates that the foreclosed homes she sees on the market have been discounted from 11 percent to 14 percent to start. But many of the houses need expensive repairs, Ms. Hulkowich said."

"Ms. Zetterlund said the lenders she works with who are selling higher-priced homes are more willing to spend money to fix them up. 'But at the lower end, they often won't,' she said."

"The average home foreclosed on in the D-FW last year was valued at about $145,000, according to Foreclosure Listing Service. That tracks with the average pre-owned home sales price in the area last year."

"Collin County had the highest average foreclosed home value at $185,197. The largest number of foreclosures, about 8,600 homes, was in Dallas County. Tarrant County was second, with about 5,600 homes foreclosed on by lenders."

"About 44 percent of the homes posted for foreclosure in 2006 were actually sold at auction to the lender. Only about 7 percent of the foreclosure auction sales went to third-party buyers who bought the house on the courthouse steps, Foreclosure Listing Service found."

"Wells Fargo Bank, Deutsche Bank, Bank of New York, U.S. Bank and Chase Home Financial had the largest number of home foreclosures during the first quarter of 2007, according to public records surveyed by Foreclosure Listing Service. In the first quarter, these five lenders alone foreclosed on almost 2,000 D-FW area homes."

"'The subprime lenders deserve some of the bad rap,' said George Roddy, chief executive of Foreclosure Listing Service. 'But the foreclosures are widespread among regular lenders. A lot of it is home equity loans and second liens.'"

"In some cases the companies foreclosing on the homes just service the mortgages and didn't originally make the loans."

"Officials with Fannie Mae, the country's largest source of mortgage funding, say they are working in markets all over the country to make sure the foreclosures they sell don't add to the housing sector's problems. 'We have an economic interest in what is going on in these communities,' said Jason Allnut, a vice president for credit loss management with Fannie Mae. 'We have lots of loans that are performing right next to our foreclosed assets.'"

"Fannie Mae knows that if it poorly handles its foreclosed houses it can be a drag on the rest of the neighborhood, Mr. Allnut said. And not just because of pricing. 'Foreclosures can, if let alone, be a huge negative impact on a community, not just from a home price perspective,' he said. 'If you don't secure a home and don't get it back on the market with people living in it, it can become a magnet for crime.'"

"The Department of Housing and Urban Development currently has about 500 foreclosed homes for sale in the Dallas area. After pricing the homes and putting them on the market, HUD may mark the price down in 45 days if it hasn't sold, said HUD spokesman Lemar Wooley. If that doesn't work, the home price can be cut again."

"'The initial list price is based upon the 'as is' appraised value of a property,' Mr. Wooley said. 'Approximately 76 percent of our properties are listed at any given time.'"

"But some owners of foreclosed homes may decide to 'cut and run' as their inventories of foreclosed homes grow, said William Brueggeman, chairman of the real estate department at SMU's Cox School of Business."

"Dr. Brueggeman saw firsthand the impact of lenders dumping foreclosed homes in Texas in the late 1980s. 'I don't see things this time getting that bad,' Dr. Brueggeman said. 'It's certainly going to flatten things. I wouldn't be looking for too much home appreciation,' he said. 'The entry-level homes are going to see more of the brunt.'"

Monday, April 02, 2007

Tips On California Foreclosures

The Desert Sun reports from California. "It pays for homeowners, and investors interested in distressed properties, to understand how the foreclosure process works in California. There are often good deals to be found on homes, but also plenty of pitfalls, said John Sloan, Realtor in Palm Desert."

"At a recent public auction for a home in Riverside County, Sloan said the new owner discovered some disturbing news. 'They found out the guy (previous homeowner) also had over $2 million in liens by the IRS,' Sloan said. 'That puts the new owner in a lot of jeopardy.'"

"Here are tips from area mortgage lenders and real estate agents on navigating the process. Once borrowers fall three months behind on payments, the foreclosure process typically begins in earnest. Lenders send a default notice to the borrower, county of residence, and anyone else who has an interest in the property, including a financial institution that holds a second mortgage."

"The notice is filed with the county recorder's office, as well as published in certain newspapers and online. The lender files a Notice of Trustee sale with the county 90 days after the default notice is sent out, and the property owner gets letters."

"Notices of default for Riverside, San Bernardino, Los Angeles, Orange and other counties are published in the legal newspaper the Daily Commerce, as well as other newspapers and paid Web sites."

"A foreclosure date is set (it must be at least 104 days after the original default notice is sent) for those homeowners who can't pay. A homeowner can pay off late mortgage payments up until five days before the closure sale."

"When an auction to sell the home takes place, county officials oversee it. Proceeds are used to pay off the mortgage and other debts secured by the house. Buyers at auctions typically purchase homes based only on what they see on the outside."

"Payment for the entire bid must be made by cashier's checks. Many banks won't finance foreclosure bids, partly because homeowners may not let appraisers inside before the auction."

"When no one makes a minimum bid on a home, the property reverts to the lender. Lenders often turn to real estate agents to sell those properties."

"Investors can and often do try to buy homes directly from homeowners before an auction. A foreclosed homeowner gets the leftover money from the auction - if there is any. Debt that is left over, in some cases, is the responsibility of the new owner."

Sunday, April 01, 2007

An Enormous Amount Of Competition

The Sun Sentinel reports from Florida. "The scene plays out every week in Room 385 of the Broward County Courthouse. 'Case No. 06-19776,' intoned the auctioneer, a foreclosure clerk named Barbara Pendergrass. Near the back, Earl Lawrence leafed through his thick black binder and looked up the property, a small townhouse in Tamarac. His research sheet told the story: Bought for $65,500 in September 2000, a foreclosure judgment for debts totaling $188,000 last December."

"'They borrowed themselves right out of a home,' said Lawrence, a real estate investor who has been coming to the public auctions for 25 years. There were no bids on the Tamarac townhouse Thursday, apart from the minimum $100 that the foreclosing bank made to formally seize the property. The same thing happened with most of the 88 properties up for auction last week."

"Florida has more foreclosures in the pipeline than any other state, 19,144 in February, according to RealtyTrac."

"The real estate market has become so uncertain, and the debts racked up on these properties so high, even the vultures aren't nibbling. 'Would you buy a property for $420,000 if you could only sell it for $400,000?' said Adnan Kabbara of Weston, a developer and contractor who has bought homes at auction for four years."

"Properties that would have attracted a bidding war a year or two ago, when the real estate market was soaring, now stay with the lenders. The banks sell them through major national real estate firms, more frequently at a loss."

"You'd think with more foreclosures, there'd be more opportunities for the opportunists. But the auctions have become ultra-conservative, with only a handful of properties triggering bids."

"When a property does get action, a high-stakes poker game erupts. 'There's an enormous amount of competition,' said Lawrence. 'There are so many people trying to get the few viable properties, they get bid up to the point of razor-thin margins.'"

"On Thursday, one investor almost made a costly mistake. He bid $406,000 for a waterfront mansion in Lighthouse Point. He didn't realize the $402,132 foreclosure judgment was a second mortgage, and that there was also a first mortgage of $938,000 about to foreclose."

"'He thought he was going to get a $1 million home for $400,000,' said Dominic Abreu, attorney for the lender."

"Before the man paid nearly $27,000 in deposits and fees to the court clerk, Abreu asked him if he was aware of the first mortgage. 'His jaw almost hit the ground,' Abreu said."

"The man scurried out before paying, scuttling the deal."