Foreclosure Auctions More Competitive Pct of Foreclosure Auctions Sold to Third Party Investors

Bad Deals at Foreclosure Auction a Boon for Distressed Homeowners The increased competition and higher prices at foreclosure auctions can be good for the homeowners losing their homes to foreclosure because any surplus funds from the auction above and beyond what is owed to lienholders goes to that now-former homeowner, according to Caren Castle, senior attorney at The Wolf Firm, an Irvine, California-based law firm that specializes in foreclosure cases. “It happens all the time … as property values continue to increase,” Castle said of cases she is familiar with in California. Castle provided the example of one recent file with about $100,000 in excess proceeds from the foreclosure auction going to the foreclosed homeowner. An ATTOM Data Solutions analysis of foreclosure auctions in major metro areas in 2016 found that properties selling at auction on average sold for more than their previous sale price — indicating an increased likelihood of excess funds available for the foreclosed homeowner — in six of the 45 metro areas analyzed: San Francisco, Los Angeles, Portland, San Diego, Seattle and Sacramento. In San Francisco, foreclosure auction prices were an average of $97,665 above the previous sale price, while in Los Angeles they were $60,964 higher on average.

Average Discount to Last Sale Price









0% 2000 2002 2004 2006 2008 2010 2012 2014 2016

They’re scraping full blocks in very expensive areas and putting in apartment buildings. And they’re getting what they ask for. … It baffles me when I drive around.”

Chris Richter Co-founder, Audantic real estate analytics, Seattle

ATTOM data shows $3.5 billion in construction loan originations in Seattle in 2016, up 51 percent from the previous year, and $1.1 billion in construction loan originations in the Washington, D.C. metro area in 2016, up 9 percent from the previous year. “They’re scraping full blocks in very expensive areas and putting in apartment buildings. And they’re getting what they ask for,” Richter said. Fewer Deals at Foreclosure Auction The search for value-add inventory has ratcheted up in Seattle and other urban

markets in part because the distressed market with its upfront discounts has largely dried up in many of those areas. And competition is fierce for the distressed properties that are still available, according to Richter, DiMeco and others. Nearly 102,000 single family homes and condos sold to third-party investors at the public foreclosure auction in 2016, down 3 percent from 2015 to a nine-year low, according to ATTOM Data Solutions. But while there are fewer properties available at the foreclosure auction,

Avg Estimated Surplus Funds at Foreclosure Auction in 2016


San Francisco, CA $97,665 Los Angeles, CA $60,964 Portland, OR $53,900 San Diego, CA $43,993 Seattle, WA $18,915 Sacramento, CA $6,364

ATTOM Data Solutions • P4

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