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From Lily at the U-T:

A ban on foreclosure auctions outside the downtown San Diego Superior Court has forced those who conduct them to two other areas that already host such transactions, a spokesman with a trade group that represents trustees said Monday.

The ban, made official in a July 1 court order, takes effect Tuesday.

People who “cry” trustee sales now conduct business at the entrance of the East County Regional Center, 250 E. Main St. in El Cajon, and outside 321 N. Nevada St., the address of Oceanside’s Housing Division offices, said Richard Meyers, executive director of the Irvine-based United Trustees Association.

It’s up to the individual companies that publish and post the sales to decide where to go, Meyers said.

The downtown San Diego venue had been used as an auction site since the 1960s. Over time, court officials said, dozens of investors, their representatives and onlookers routinely crowded around the main entrance of the downtown facility throughout the day, causing safety and security concerns.

A reader noted that yesterday was an active day for trustee sales.  But unlike last month, when I got snookered into thinking something was afoot, I went right to the auction.com website. 

Yep, yesterday they conducted their latest installment of ’trustee sales by ballroom auction’ – link here.

I can relate to what they are going through.  Bank of America and others are dumping some of their worst properties on them – only two of the 117 properties were over $400,000, and the majority were under $200,000.  There was also plenty of postponements.  Of the 117 on the list, only 30 were sold – they postponed 58, and cancelled 29.

If you are looking to pay cash for cheap properties, and don’t mind buying without title insurance and inspections plus evicting the occupants, this might be for you.  At least the parking is easier, and you won’t be tripping over the bums and hobos downtown.

But it is run by the same REDC auction house that has been exposed here previously.

Overall yesterday there were 68 trustee sales conducted throughout the county, with 38 properties being purchased by 3rd parties, and 30 going back-to-bene.  It brings October’s total up to 672 trustee sales, with three days to go.  In September there were 754 successful trustee sales.

Hat tip to shadash for sending this along, from the nctimes.com:

Hat tips to Jakob and Gene for sending this along from sfgate.com:

Investigators look into whether there is collusion among real estate speculators involved in the courthouse sales.

Foreclosure auctions take place every weekday on the steps of courthouses throughout California. Now the FBI is investigating whether some real estate speculators are illegally rigging bids for these sales.

“Last week, the FBI conducted interviews and executed search warrants through the entire Bay Area as part of a long-term investigation of anti-competitive practices at trustee sales of foreclosed homes,” said bureau spokeswoman Julie Sohn.

The probe is shaking up the tight-knit world of investors who bid at these auctions. The issue, sources say, is that some participants allegedly pay others to refrain from bidding on certain properties to keep their prices low.

Such bid-rigging violates the federal Sherman Antitrust Act and can carry a maximum penalty of 10 years in prison and a $1 million fine.

That maximum can be increased to twice the perpetrator’s gain or twice the victim’s loss.

“There have always been rumors of collusion at the courthouse steps,” said Sean O’Toole of ForeclosureRadar.com, a Discovery Bay company that provides detailed information on properties sold at the auctions. At a typical auction, many investors clutch clipboards with printouts from his website.

“If you have a small crowd of guys that talk to each other every day, it’s natural for them to say, ‘Why are we bidding each other up? Let’s just buy this and work it out afterward.’ ” O’Toole said. But when he speaks to real estate clubs and others, O’Toole said, “I am very clear. I say: ‘This is illegal. Don’t do it.’ “

Most properties revert to lenders at courthouse-step auctions, which are the final step in California’s foreclosure process, but about 20 percent get sold to outside investors.

Rules of the game

Bids are all cash; properties are sold as is, subject to existing liens and with no guarantees as to condition, so only deep-pocketed, experienced investors generally make bids, seeking properties that still have some equity that they can fix and flip, or hold onto for the long term.

A real estate agent who attended some San Francisco auctions in hopes of buying investment property described what he witnessed.

“If you start to bid, there are about five guys who work together and who box you in,” said the man, who asked not to be named for fear of retribution. “One guy came up to bid who clearly was not part of that crew. The guys were bidding. At some point, (their ringleader) turned to (the outsider) and said, ‘You must really like this property. It must be really important to you.’ He had a piece of paper in his hand; he showed it to the guy.  The guy nodded OK and then disappeared into the building.”

The man said he was positive that the outsider was being paid off not to bid, although he did not witness money changing hands.

At Alameda County’s auction Wednesday, most investors declined to discuss the issue, but some said they welcomed the FBI’s interest.

“This has been going on for many years,” said one man who declined to give his name. “It’s a closed group that doesn’t always allow the properties to go up to their true value.”

Thin margins

O’Toole and others said the margins at the auctions are pretty thin.

In general, he said, “the opening bid is only 20 percent below market, and the average sale is only bid up 12 percent. It’s hard to make a living in this business – by the time you pay repairs and sales costs, you’re looking at about a 5 percent net return.”

In a case that resembles the current probe’s focus, in April a Stockton real estate agent pleaded guilty to bid rigging.

Anthony B. Ghio admitted “that he conspired with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County,” according to a news release from the U.S. Department of Justice. “The primary purpose of the conspiracy was to suppress and restrain competition and obtain selected real estate … at non-competitive prices.”

The release said that after a “designated bidder” bought a piece of property at the public sale, the co-conspirators would hold a second private auction to determine who in their group ended up with the property. The difference between the two auction prices “was the group’s illicit profit, and it was divided among the conspirators in payoffs,” the release said.

The FBI encourages anyone with knowledge of anti-competitive practices at foreclosure auctions to call its tip line at (415) 553-7400.

Hat tip to SM who sent this along from Marilyn at the ocregister.com:

A two-story house on the Seacliff Golf Course in Huntington Beach is the worst example of “malicious vandalism” of a foreclosed home that a top Realtor for bank-owned properties says he’s ever seen in Orange County.

The home, at 6581 Racliffe Circle in the guard-gated The Peninsula at Seacliff community, went back to the bank at $1,782,214 at a foreclosure auction last August after no one bid on it.

The roughly 3,000-square foot house now is undergoing about $250,000 in repairs, says broker Tom Moon of Pacific Moon Real Estate, who has the listing.

Among the destruction: Chemicals and cement were poured down drains, a Jacuzzi was left running for what may have been months, with most walls in the house splattered in mold, and a floor caved in from the weight of a huge pile of wet clothes and other junk.

The day I went by, workers in special bodysuits and masks doing mold remediation would not allow us into the house for safety reasons. As is typical with some foreclosed homes that are found stripped and trashed, the Realtor and the bank cannot prove who did the damage. And with a lack of eyewitness accounts in these cases, police rarely get involved.

Sean, our Los Angeles correspondent, files this report:

Jim,

Up here in LA it looks like BofA/Countrywide just threw the foreclosure machine switch back to the “on” position.  The number of Recontrust properties with opening bids set for tomorrow’s trustee sale auctions just spiked, so it looks like whatever self imposed delays or moratoria they had put in place during the past few months just came to an end.  Let’s cross our fingers and hope that maybe last year’s misbegotten prediction that they would crank out 65k foreclosures is about to come true a year later.
 
Sean

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Here are the San Diego County stats for Recontrust – hopefully this will mean something:

Trustee-sale results, YTD:

Foreclosed: 91

Cancelled: 76

Trustee-sales scheduled:

This week: 298

Next week: 270

1/31 – 2/4:  818

2/7 – 2/11:  884

2/14 – 2/18:  813

2/21 – 2/25:  327

Total: 3,410

Seven percent of the total are facing their first scheduled date.

Bold above - the rolling blob of loanmod-shadowinv ?

The number of properties making it to the court house steps is on the rise – there has been a 50% increase roughly in SD County trustee-sales since the end of June (from 200 to 300).  It’s still a pittance, however, compared to the 14,493 properties in default in San Diego County:

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The SFR trustee sales in the North SD County Coastal region have been fairly steady however – no big spikes yet. There has been an average of seven SFRs foreclosed per week over the last 12 weeks (avg of 2 of 7 bought by third-parties), even though there are 608 on the NOD/NOT lists. Are servicers trying to squeak out every last loan mod they can find, or deliberately holding back?

North San Diego County Coastal Trustee-Sale Results, SFRs-only:

It appears that the servicers are managing the drip very carefully for the higher-end properties, but if there are any surges, you’ll see them here!

From HW:

Notice of default filings in California rose for the fourth-straight month in August climbing another 16.6%, according to ForeclosureRadar, which also began issuing data on foreclosure rates in four more states and unveiled new search functions on its web site.

In California, foreclosures are down 16.3% from a year earlier, and fewer homeowners found foreclosure relief as cancellations fell 11.2% and 15.6% more homes were lost in foreclosure sales, the firm said.

“Real estate markets are local, not national, and like other real estate trends foreclosure trends vary a great deal by location” said Sean O’Toole, ForeclosureRadar founder and chief executive.

(San Diego County’s one-year chart below)

From NMN:

Fannie Mae wants out of its defaulted residential mortgage holdings as quickly as possible and is warning loan servicers not to stand in its way.

The government-sponsored enterprise notified servicers Tuesday that it will begin monitoring them to determine why there are delays in moving delinquent loans into foreclosure. If servicers cannot properly account for the holdups, it will perform on-site reviews and assess fees to give servicers “a financial incentive to comply with Fannie Mae policies and improve the overall quality of their performance.”

All year, the so-called shadow inventory of home loans that are delinquent but not yet in foreclosure has been growing. The buildup has been widely interpreted as a sign that banks and servicers are intentionally delaying foreclosures, in part to avoid taking losses on loans that they hold.

About 2.9 million homes have been repossessed by banks or are in the foreclosure process, according to Lender Processing Services. But 4.5 million borrowers are at least 30 days delinquent on their mortgage.

With the economic recovery stalled and housing prices expected to fall further, Fannie appears to be making the first move.

“This is a shot across the bow that servicers have to start paying attention,” said Kevin Kanouff, a founder of Statebridge Co., a Denver special servicer. “Now they’re going to put their feet to the fire and expect to move these loans along as opposed to throwing them in a program and just collecting the fees.”

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The amount of properties being foreclosed is still lower than the last two summers:

But at least the recent trend is heading in the right direction – fewer trustee-sale cancellations:

Will servicers consider that selling more properties when rates are 4.25% might be a good idea?