NorCal: Foreclosures' furious pace

SJ is 1st, Merced 2nd, Stanislaus 4th in nation's mortgage defaults

By J.N. SBRANTI
jnsbranti@modbee.com

Last Updated: July 12, 2007, 09:44:58 AM PDT

About $925 million worth of mortgages have been foreclosed on since January in the Northern San Joaquin Valley, and 2,575 homes have been auctioned off on courthouse steps in Stanislaus, San Joaquin and Merced counties.

During June alone, there were 203 home foreclosure auctions in Modesto at which lenders tried to recover what they could from $66 million in delinquent loans, according to the ForeclosureRadar research firm.

By comparison, only 15 such home auctions took place in June 2006, and those loans were worth just $4 million, said Sean O'Toole, who owns ForeclosureRadar, a research firm based in Discovery Bay.

O'Toole has been tracking the rapid rise in foreclosures throughout California. Statewide last month, he said, there were foreclosure auctions for 6,960 homes with loan values of $2.83 billion.

"Foreclosure sales now represent about 16 percent of all home sales in California," O'Toole said.

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Modesto - SJ Valley Home Bidders Beware..

Another home foreclosure auction is headed to Modesto, and it's got potential bidders hankering for a bargain. But before you start waving your bidding number in front of a fast-talking auctioneer, there are things you should know about home auctions. Most of the more than 500 people who attended last month's auction in Modesto never had seen houses sold that way. The process caused confusion because some deals quickly fell through with several of the high bidders. Those houses ended up being auctioned off again and again, until the auctioneer found bidders who were financially qualified to purchase the homes and had brought sufficient down payment funds.

Bidding rules will be different for the next big auction, scheduled by Hudson & Marshall for July 19 at Modesto Centre Plaza. And more auctions are expected to be held later this summer and fall. That's because lending institutions have repossessed thousands of Northern San Joaquin Valley homes, and they're eager to sell them any way they can. So here are some bidding tips for first-time buyers, seasoned real estate investors and everyone else who is considering buying a home at auction:

RESEARCH HOME VALUES — "It's definitely a buyer's market and everything's on sale right now," said Ken David Elving, co-owner of Matel Realtors. He is representing the sellers of five homes that will be auctioned July 19 in Modesto.

To determine a home's value, Elving said, don't rely on what homes sold for in the past because prices have been falling very quickly. "Focus on the prices being asked for homes for sale now," Elving said. To determine a "comp" — or comparable price — he suggested looking on a Web site to see the asking price for similar homes. Current asking prices often are substantially less than previous sales prices for identical homes.

Example: Elving said a home in the July 19 auction at 1855 Vintage Circle in Oakdale sold in May 2006 for about $550,000. By this spring, that 2,784square-foot home was back on the market for $394,000. No one bought it, so now it will go to the highest bidder. A search of properties for sale in that neighborhood shows several slightly larger homes priced about $360,000. So that $360,000 price may be a more logical bid than $550,000...

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