• George Wolf
• Sep 1,2010
• In: Foreclosure

Foreclosure Auctions in Santa Cruz County

Santa Cruz County broke the record on the number of foreclosures file this Tuesday. On Tuesday, three dozen properties were announced on the county building steps by the county. Santa Cruz County holds auctions at 1:30 p.m. Monday through Friday, with the exception of holidays.

This year, over 600 homes have been foreclosed- a 300 percent increase over 2007. Homes are announced on the steps of the county building. Bidders are not given the option to inspect the house. They buy it as is. Also, the winning buyer must pay the full amount of the winning bid when the auction is over.

Last year, foreclosure auctions took at most, 30 minutes. On Tuesday, the auction went until 3:00 p.m. The length was due to the number of properties, as well as in delays caused by 16 properties that needed asking prices from lenders. The Monday Labor day holiday caused part of the increase.

However, the main cause is that homeowners with adjustable rate mortgages are still running into problems making payments when the interest rates increase, resulting in delinquencies that become foreclosures. With the tightening credit market, many homeowners are discovering that they are unable to refinance after the interest rate climbs.

In 2007 the county auctioned off on average between 4 and 5 foreclosures during a week. Most of the houses for auction were purchased in 2005 and 2006 when property prices hit record highs. No bids were recorded on 10 properties and were sold back to the lending banks.

The selling prices for the homes that received bids ranged between $240,500 and $563,125. The town of Watsonville has been especially hard by the foreclosure disaster. However, the towns of Aptos, Los Gatos and Santa Cruz also had properties for sale this Tuesday.

The house that sold for $563,125 had a debt of $750,000. Realtors tried to sell the house for a list price of $845,580 with no luck. Six homes were pulled from the auction because owners completed bankruptcy filings. The remaining 21 houses were pulled from the daily auction because lenders and borrowers were discussing ideas to try to avoid foreclosure.

Five house sales were canceled because the owners no longer were delinquent. Another sign that the economic and housing downturn is still progressing is the increase in bankruptcy filings by county residents. Compared to last year, the county has seen a 75 percent increase in the number of bankruptcies filed.

Attendees to the county auctions include investors who believe that the market may be close to the low point. Also, renters were present to see if their houses were being sold. As in other parts of the country, property owners being foreclosed are affecting renters. The renters then have to move out of the property.

The number of default notices being sent to delinquent homeowners has been increasing, now reaching 50 per week. Unfortunately, the news is does not improve in Monterey County. Last week, 191 default notices were filed. While not quite a record, it is still the second highest amount ever seen in Monterey County.

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