Homes foreclosure auctions in Mesa County had been the most active among auctions in the 12 largest counties in Colorado in January this year based on percentage increases, according to data from the Colorado Division of Housing.

The number of completed foreclosures listed for the January 2010 auctions shot up by more than 4 times the number listed in January last year and almost 6 times the number in January 2008.

The number of initiated foreclosures also increased in January by more than 2 times the number in January last year and more than 3 times the number in January 2008.

Of the 12 largest Colorado counties, 8 counties posted declines in foreclosure filings compared to filings in January 2008, the month foreclosure activity started to gain ground in the state. Foreclosure activity started late in Mesa County, surging by a significant rate only in 2009. In January this year, foreclosure activity slowed in 10 of the 12 largest counties while it surged in Boulder and in Mesa.

In Mesa County, foreclosure activity surged to 145 filings in January this year, an increase from 56 filings in January last year and from 41 filings in January 2008. Total sales of foreclosure homes also increased in January this year, with 70 units sold at homes foreclosure auctions or sold back to lenders. Only 16 foreclosure homes got sold in January last year and in January 2008, only 12 units were sold.

As of February 19, lenders have already filed 106 foreclosure actions with the Mesa County Public Trustee’s Office, according to public trustee officer Sharon Ener. He added however that although more properties in Mesa County are entering foreclosure auctions over the past months, the pace of sales had not been as active.

Based on number of foreclosure filings in January, Mesa County ranked 7th among the 12 largest counties. It ranked 10th based on foreclosure sales.

Meanwhile, Mesa County real estate professionals were encouraged when total home sales in January surged by 46 percent compared to sales in January 2009. The Colorado Association of Realtors reported that 99 houses were sold in January this year, an increase from 68 houses sold in January last year.

As homes foreclosure auctions get more active with more listings, home prices continued to fall. The average sales price in January this year decreased to $192,222, compared to the average price of $206,667 in January last year.

Foreclosed homes auction companies operating in Michigan have temporarily slowed down their activities in the state due to a decline in completed foreclosures.

During the holidays, major banks deferred their scheduled foreclosures. They also have been allowing distressed borrowers to negotiate for loan modifications. Additionally, they have been strategically controlling the release of their foreclosed properties to the market in order to prevent sharp price declines and to lessen the impact of foreclosures on their books.

According to Laurie Bunn, top executive of an online real estate auction firm launched last year, her firm expects business to pick up in the second quarter.

Although foreclosure postings in Michigan were still rising over the latter part of last year, the number of completed foreclosures ready for auction has been declining due to various delays.

Based on figures from a California-based foreclosure research firm, the pace of foreclosure in Michigan was still among the highest in 2009. More than 118,000 houses across the state received default and foreclosure notices, marking an almost 12-percent jump from notices in 2008 and a nearly 36-percent increase from 2007.

Almost 1.4 residential units in Michigan were in the foreclosure process last year, ranking the state eighth in the U.S. in foreclosure rate.

Various delays, however, both as a business strategy and in compliance to the federal loan modification program, have slowed the entry of foreclosure properties into the market.

Even large auction firms like Texas-based Hudson & Marshall have not scheduled any foreclosed homes auction in February in Michigan.

In 2009, Hudson & Marshall sold off 966 foreclosed homes in Michigan, a significant drop from the 1,700 units sold in 2008. According to principal Dave Webb, the firm expects to auction off 600 units this year in the state.

Webb said that his firm, which conducts auctions across the nation, sold most Michigan homes in 2009 during the first months. He added that the three-month moratorium implemented by the state in 2009, in addition to the federal loan modification program, slowed down the foreclosure process.

REDC, another large auction firm, also only had a few Detroit foreclosures in its properties ready for auction this month. Nationwide, the firm sold off properties worth $3.4 billion in 2009.

According to Webb, his firm Hudson & Marshall will return to Michigan in the middle of March to hold a foreclosed homes auction for about 200 properties that have been listed for sale for more than three months.

Over the past two years, Governor O’Malley have championed several measures to prevent and mitigate foreclosures, such as the extension of the foreclosure time frame to 150 days, criminalizing mortgage fraud and prohibiting fraudulent mortgage rescue schemes from operating in the state. But despite these measures, foreclosure postings continued to increase across the state.

According to Alexander Sanchez, head of the Labor, Licensing and Regulation Department of Maryland and also the chief banking regulator, said that it has been difficult resolving the foreclosure problem. He explained that the major causes of the first flood of foreclosures – subprime loans and toxic mortgages – were replaced by unemployment, a factor even more difficult to address with quick results.

In November, one foreclosure action was filed for every 364 households in Maryland. Nearly 6,400 residential units were put into the foreclosure process, with 3,317 of them readied for foreclosed home auction and 711 units already repossessed by the banks.

According to Secretary Sanchez, the mediation meetings could be likened to settlement sessions in court proceedings. He added that bankers, housing advocates and other community representatives will meet to craft the legislation.

Currently, the state of Maryland requires lenders to notify homeowners 90 days in advance before pursuing a foreclosure sale. After borrowers default, lenders should notify the borrowers 45 days before issuing the notices of foreclosure and then wait for 45 days more before selling the properties.

As expected, bankers have opposed the plan to craft mediation legislation. Dave Pulford, former head of the Maryland Mortgage Bankers Association, said that the planned mediation would further increase their foreclosure costs. He complained that his bank and other banks have already modified a lot of mortgage loans, but the borrowers never made the first payments.

Mary Ann Scully, chief executive of Howard Bank, added that it has been difficult modifying loans for troubled borrowers who ask for help but do not provide the right financial documents.

In response, Shaun Adamec of the DLLR, insisted that a number of lenders and mortgage servicers have not really been doing their part in helping borrowers save their houses from foreclosed home auction.

The 612-acre development is located between Interstate 85 and Lake Mackintosh, the lake that supplies water for the city of Burlington. After developer MacIntosh LLC defaulted on its loan owed to PNC Bank, trustee Alan Ferguson filed a foreclosure sale notice in the courts of Guilford and Alamance counties.

MacIntosh LLC was formed by Wakefield Development, a subsidiary of Virginia-based L.M. Sandler and Sons, to develop the Mackintosh community. In September 2004, Wakefield borrowed $12 million from Pittsburgh-based National City Bank and then increased the loan in 2007 to $21 million. Last year, PNC acquired National City, including the Wakefield loan.

Based on stories in news archives, the Mackintosh project was approved by the city of Burlington in December 2003 and home construction started in March 2005. Several hundred houses and townhouses have been constructed, with prices starting at around $150,000. Bigger houses built near Lake Mackintosh were priced at around $1 million.

Several homes and home lots are excluded from the foreclosed homes auction, such as some properties in the neighborhoods of Prestwick, Avalon, Braemar, Glenmoor, Ballantrae, Inverness, Tayside Townhomes, Kenross Townes and Glenmore Townhomes.

According to Wakefield Development officers, it would take about ten years to complete the 2,000-house project.

Last year, it was also reported by a local newspaper that Wakefield failed to pay over $2.7 million to its contractors, including Triad Grading and Paving, which filed the bulk of the total mechanic’s liens. But according to former Wakefield top executive John Myers, the contractors were already paid. Myers said that he left the firm in a downsizing scheme, but he still does consultation work for the company.

Many in the area were surprised at the foreclosure of the Mackintosh development because it was thought to be immune from financial troubles. Wakefield hosted summertime triathlons, helped determine a new school location and planned to establish a neighborhood shopping center.

But foreclosures have started in Alamance long before other counties experienced them, according to local real estate agents, because of the difficulties of developers in restructuring their construction loans.

Wakefield Development is also struggling with its residential projects in other North Carolina counties. Without help from other investors or lenders, most, if not all, of its unsold properties are also expected to go into foreclosed homes auction.

The huge sales also indicate the continued interest of investors and homebuyers in discounted residential properties.

According to REDC, its most recent online foreclosure auction resulted in $14.9 million in sales of foreclosed homes in Houston, Dallas and Seattle. The latest auction increased the company’s total real estate sales to over $2 billion so far this year.

REDC chief executive Jeff Frieden said that the most recent auction sold off more than 1,100 foreclosed homes across the U.S., helping banks and other sellers reduce their huge foreclosure inventories and increasing their take from the sales.

All in all, REDC has held 298 foreclosure auctions so far in 2009, selling 34,600 residential, industrial, commercial and housing-development properties.

Frieden also explained that the company’s venture into online auctions has enabled the firm to reach clients in cities where it had not conducted foreclosure home auctions as often as in other cities.

According to Frieden, the first nationwide online foreclosure auction for the firm was in August this year, which resulted in total sales of $31.7 million. It auctioned off 770 real estate properties ranging from lower-cost single-family homes to expensive mansions located in 45 states and received thousands of bids.

Frieden also added that the firm has auctioned off over 50,000 foreclosure homes and received over $6 billion in sales since the foreclosure crisis started.

Another foreclosed home auction firm, Rowell Auctions, also recently held a live auction at the Marriott Hotel in Raleigh, North Carolina. Over 30 condo units at the Meadow Wood Park complex that were priced above $200,000 were sold off for less, with one unit sold for $129,000 and another for $116,000. None of the units were sold below $111,000.

Over 100 people participated in the live auction, with many of the bidders getting financing from Bank of America.

Another auction firm that has been holding foreclosure auctions across the country is family-owned Hudson & Marshall, which has been operating in the real property sector for more than 40 years.

During the month of November, Hudson has been conducting auctions in the states of Arizona, Nevada, Washington, Colorado, Utah and Idaho. For the month of December, it will focus on foreclosure home auctions in the East, including the states of Maryland, Delaware and Washington, D.C.

Lynch explained that the city is trying to avoid further problems related to vacant foreclosures that result from flipping. She said that in the past, flippers were snapping up cheap foreclosed properties at auctions and then reselling them quickly without making repairs and improvements.

Each prospective auction participant is required to sign an anti-flipping affidavit, promising not to resell any property bought at the auction for over 120 percent of the final sales price within six months from the auction date. She said that the city of Buffalo will monitor all properties after the auction.

In the most recent Buffalo tax foreclosure auction held in October at the Buffalo Niagara Convention Center, nearly 3,500 properties were offered for sale at the auction. But before the bidding started, the properties dropped in number as owners rushed to pay back taxes and penalties to take out their properties from the list.

According to Buffalo Taxation Commissioner Martin Kennedy, tax officials can remove listed properties from foreclosure home auctions up until a few minutes before the auctions.

At the October auction, it was Buffalo Judge Henry Nowak who presided and opened the auction. He told auction participants that they need to be familiar with the properties they are planning to purchase because a lot of the properties have pending building code violations that they need to resolve after sales contracts are signed.

He explained that in the past, many buyers thought that they can buy the best properties at the lowest prices. He told his audience that they need to be realistic because most of the properties being auctioned need repairs. If not, the properties would have not been offered at cheap prices as low as $4,000, he added.

Among the prospective buyers was Diane Picard, head of the Massachusetts Avenue Project, a nonprofit that plans to buy a vacant lot where they have been growing plants. Before the foreclosure, the owner has been allowing them to create urban gardens on the land.

According to Commissioner Kennedy, the October 2009 auction has been the biggest compared to all city-administered foreclosure home auctions in the past, but he added that unlike in the past, properties of owners delinquent in paying water bills this year were included.

Are there significant differences? Yes, there are. In many cases, you can buy a foreclosed home at a public auction conducted by a court at a much lower price than a similar house sold off in an auction held by an auction company. This is because some banks which have foreclosed on the homes do not want to take back the homes; they just want to recover as much cash as they can from the properties.

There are however risks from buying homes at foreclosure auctions conducted by courts or trustees. Remember that these homes have just been foreclosed, so the homeowners may still be occupying the homes. As there are still occupants, you may not have the heart or you may not be in the right position to inspect the houses in foreclosure.

There are also cases that homeowners can still remedy their financial problems and be able to redeem their foreclosed properties just before the court-supervised foreclosure auction or during their redemption period in states that honor this rule.

On the other hand, a foreclosures auction conducted by an auction company is more organized. Since the foreclosed properties being sold off in this type of auction are already real-estate owned, you can now inspect the properties freely by just contacting the listing agents of the auction firm or by just viewing the properties on the web sites of the auction firm.

In most instances, auction firms even allow you to submit your bid before the scheduled auctions. Just be prepared with your check and cash because auction firms require you to register and make your deposits before bidding and then give you only a few days to complete your purchase. Additionally, most auction firms require cash payments and do not offer financing.

Both court-supervised and company-administered foreclosure auctions indicate that the properties are sold off on an as-is basis. But in a company auction, you can do a more thorough inspection on the home you want to buy. The auction company also provides you with title insurance, assuring you that the property title has been checked.

In a public foreclosures auction, you need to search public records and do the title search by yourself or hire a professional to do so.

The total represented a drop of 25.3 percent from foreclosed home auction sales in the previous quarter, when a total of 561 housing units were auctioned off.

Meanwhile, over 500 households across the county received default notices in the third quarter, pushing the total defaults this year to 1,688 units, an increase of 12 percent compared to the same period last year. The total number of defaults in nearby Monterey County was however higher at 4,490.

Statewide, the mortgage lenders with the highest number of home loans that defaulted in the July to September quarter were Countrywide, which had 7,583 defaulting loans; Washington Mutual, which had 5,146 loans and Wells Fargo, with 4,425 loans. Wachovia, formerly World Savings, had a loan default rate of almost 12 percent, posting 4,237 loans in default. All these lenders were active in 2006 and all contributed to the continued rise in foreclosed house auction sales throughout California.

According to foreclosure analysts, most defaulting loans in California were made in the middle and in the last months of 2006 and that most loans are being serviced by financial companies other than the lenders who made the loans. In California, the servicers with the highest number of delinquent accounts are Cal-Western Reconveyance, ReconTrust Company and Quality Loan Service Corp.

Most default notices were sent to homeowners when they were already five months behind in their payments, according to foreclosure analysts. This is another indication that servicing companies have not been rushing to foreclose, careful not to overload the California market with foreclosures that could push down home prices sharply. In September, foreclosure auction sales statewide dropped by 37 percent.

In Santa Cruz, the total number of default notices so far in 2009 rose by almost 12 percent to 1,688 units, compared to 1,511 in 2008 while the number of foreclosures completed increased by more than seven percent from 1,060 units to 1,137 units

While foreclosed house auction sales in Santa Cruz dropped by over 25 percent during the quarter, traditional home sales rose by over one percent from 1,726 units to 1,750 homes.

Out of the city’s total market cap of $22,438,000, bank owned homes accounted for nearly $1.9 million dollars. The real-estate owned (REO) were nearly 52.9 percent of the total market. In September, the median price for REOs was $270,000. Also, the average foreclosure sale price was 274,000. It is estimated that there is a difference of 103 percent between the listing to selling ratio for REOs. But data showed that REOS were selling at foreclosure homes auctions at a premium of 3 percent which is above their listing price.

About 19 distressed properties in the city were supported by the Federal Housing Authority (FHA) loans. And the average sale price for FHA distressed home was $281,100. The total amount of REO/FHA portfolio was $5,342,000, representing 44.9 percent of the overall REO area index. This means that 44.9 percent of the foreclosure inventory in the city was bought using FHA loans.

Meanwhile, repossessed homes that were bought using conventional loans posted an average sale price of about $292,000. Conventional financing accounted for about 24.6 percent of the total REO market index in the city. The average percentage is estimated to be nearly 10 transactions. Additionally, the conventional median REO amount totaled $288,600.

So far, there were 10 cash foreclosure deals that were completed. The figures accounted for 22.8 percent of REOs or 23.8 percent of the overall house sales. In September, the average cash foreclosed property amounted to $271,000.

On the other hand, the median sale price for REO homes in Brentwood was $260,000. The number of days that REOs remained on the market averaged 33 for FHA, 22 days for cash-financed purchases and 18 for conventional financing.

Overall, sale transactions in Brentwood experience a moderate decline. Banking analysts said that the decline was due to attempts by banks to workout solutions for sale of distressed houses before they foreclosed on them. They said that so far, loan modifications in Brentwood failed to meet expectations but short sales are starting to become a trend when it comes to saving a property from foreclosure homes auctions.

But they cautioned that the market could get worse before it starts to get better. They pointed out the potential resurgence of foreclosed homes as foreclosure moratoriums implemented by lenders in 2008 and 2009 are starting to expire.

They predicted that another tide of foreclosure properties will be seen on the market in the last quarter of this year or in the first quarter of 2010.

They explained that many banks and lenders want to get rid of foreclosed houses on their inventory before they release new foreclosures on the market. This is because if they decide to flood the market now with new foreclosures, prices would hit their lowest levels and the potential for incurring losses is great.

Analysts added that it is part of banks’ strategy to hold off foreclosures to create an artificial lack of supply on the market. And with the increase in number of first-time homebuyers who want to take advantage of the $8,000 federal tax credit, demand for cheap bank foreclosed homes will surely rise.

For the meantime, banks are eager to sell foreclosure properties on their inventory and many are opting to dispose them at auctions.

Industry analysts said that buyers who purchase homes at auctions can save hundreds or thousands of dollars. For example, foreclosure homes on Forest Lane neighborhood in North Dallas sell for $400,000. But the starting bid for these foreclosure properties is at $99,000 at auctions.

Meanwhile, industry experts pointed out that the price of a foreclosed home at auction depends on the location, condition and the number of buyers who will bid for the property. An intense bidding could result in a higher home price.

On the other hand, Texas foreclosure rate for the first half of this year declined by 14 percent compared with the same period the previous year. The figures earned Texas the 29th position in the ranking of states with highest foreclosure rate from January to June.