Oct 20, 2007 2:05 pm US/Central
More Than 300 Foreclosed MN Homes On Auction Block
MINNEAPOLIS (AP) ―
In a sign of the subprime mortgage meltdown, more than 300 foreclosed homes across Minnesota go on the auction block this weekend.
Repossessed condos, ramblers, Victorians and even large suburban houses were to be sold to the highest bidders in the two-day sale at the Minneapolis Convention Center.
"It's a sign of the times," said Minnesota Association of Realtors vice president Chris Galler, who said it's the biggest auction he's seen in his two decades in the business. Auctions normally dispose of a half-dozen to a dozen homes.
The boom in foreclosures has meant opportunity for Irvine, Calif.-based Real Estate Disposition Corp. The company has gone across the country auctioning as many as 600 repossessed homes at a time. This year the company has stopped in about 10 cities and has five more scheduled after Minneapolis.
"It seems like six months ago the spigot was turned on and all of a sudden there was a lot of inventory," Real Estate Disposition Corp. Chairman Robert Friedman said.
Among the properties at the Minneapolis auction were a 1,072-square-foot home with red shutters, hardwood floors and 1907-vintage woodwork in north Minneapolis -- once valued at $47,900 -- and a 1978 three-bedroom home in Shakopee once valued at $710,000.
One possible reason for the boom in large-scale auctions is that lenders found themselves with a glut of properties and couldn't sell them through traditional means, said University of Minnesota associate law professor Prentiss Cox, a former assistant attorney general who tracks the issue.
Lenders first held onto the homes thinking they could eventually turn a profit, but with prices depressing, the "dam broke" and they finally decided to cut their losses, Cox said.
"To have this kind of mass public auction is really unusual," he said.
The number of houses being auctioned Saturday and Sunday is only a fraction of the number of foreclosed homes in Minnesota. According to the foreclosure Web site, www.realtytrac.com, there are about 8,900 foreclosed properties in the seven-county metro area alone.
Last month, foreclosures in the state were up 183 percent from a year ago, to 1,510. The rate was one filing for every 1,491 households.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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