Industry experts explained that potential buyers bid on foreclosure properties and once they won the bidding, a contract will be made immediately and the deal will be closed less than two months later.

However, things are not as simple as they seem. A foreclosure auction will be advertised with low starting bids such as $129,000 for a property worth $400,000 or a low $500 for a house valued at $102,000.

But industry experts said that the advertised starting bids are usually misleading and part of the sales strategy. They said that there is a buyer’s reserve which was not traditionally advertised. This means that there is a starting bid that owners of the properties, usually the banks, want bidders to meet. In case the highest bidder does not meet the price, banks have the option to reject or accept the bid.

The process involves finding the highest bidder in an auction without giving up the property if the bid is not high enough. Experts said that the process works in favor of banks. But still, there are many good deals to have in foreclosure auctions. All it takes to get a good deal is to come to the foreclosure sale armed with knowledge of the process. Experts said that buyers should do their homework first before they start bidding.

Meanwhile, potential buyers are given an opportunity to inspect the foreclosure properties before the auction during open houses. Industry experts recommend that potential buyers should take advantage of this opportunity so that they will have a first-hand look of what they are getting into, that the property is worth every cent that they are going to pay.

On the other hand, experts said that potential buyers should always keep in mind the buyer’s premium usually included on every sale. In some auctions, the premium is 5 percent of the total purchase price or it could be higher. Another tip to potential buyers at foreclosure auctions is to determine the amount that they are going to spend and stick on the budget no matter what.

According to industry experts, auctions allow investors to purchase the best foreclosure properties at cheap prices. Investors can check out foreclosure listings if they are interested in finding available foreclosure homes at Hialeah and the surrounding areas.

Most foreclosure listings feature multi-family and single houses, duplexes and buildings of various kinds. Typically, foreclosure of a Hialeah distressed property takes only almost two months. At the end of three months, the foreclosure property will be placed on the auction block.

The auction is usually conducted by the court clerk who will also be responsible for turning over the property to the winning bidder. Notices of sale will be released which contain all the necessary information such as the place and time of auction and case details.

HUD-foreclosed houses are popular in Hialeah and its surrounding areas, especially after the hurricanes in Florida. Majority of HUD-foreclosure houses are sold at very low prices. Usually, the preference to buy the foreclosed property is given to owner-occupants.

Previous owners who want to buy back their property should arrange their finances before the auction. A pre-approved loan will give them leverage during the auction. Usually, the HUD provides incentives to encourage repairs of the Hialeah foreclosure homes.

Meanwhile, seized property auctions are common in Hialeah. After various notices and homeowners still failed to find ways to remain on their properties, the distressed houses will finally by seized due to non-payment of mortgage.

Once the lender acquires the distressed home, it becomes a repossessed property. The lender has the option to remodel or refurnish the repossessed property to boost its resale value. Industry experts said that repossessed properties are great bargains as they can be bought at very cheap prices.

Many lenders in Hialeah conduct foreclosure auctions and anyone who has the means can join in the bidding process. Many first-time homebuyers prefer to buy foreclosure properties at auctions because of their low prices.

Countywide, home buyers, real estate investors and agents seeking foreclosure properties, real-estate owned and auction opportunities can find great deals in Miami-Dade. The most populated county in Florida, Miami-Dade is an international playground attractive to foreign visitors.

According to the Mecklenburg County Office of the Tax Collector, these homeowners have not been paying their property taxes for the past 8 years or longer, posting a total of $6.6 million in unpaid taxes.

Despite the low percentage of the unpaid taxes compared to the $1.3 billion collected annually, elected officials have criticized the tax collectors and have called on them to find more effective ways to collect the unpaid taxes.

Susan Burgess, a councilwoman in Charlotte City, said that not doing anything to collect the unpaid taxes is unfair to residents who have been paying their taxes.

Similarly, County Commissioner Bill James said that the $6.6 million in uncollected taxes can do much to prevent more lay-offs in the county. He suggested that the tax collector should use the law that allows the tax department to seize delinquent properties and add them to lists of Charlotte foreclosure homes for auction. He explained that a credible threat would force taxpayers to pay what they owe the local government.

In response to the criticisms, Neal Dixon, tax collector of Mecklenburg County, explained in a memo sent to commissioners that his department has been able to collect 99 percent of all property taxes that need to be paid. He defended his performance by saying that there has been no large metro area which has achieved a collection rate of 100 percent. He reiterated that for a large metro jurisdiction like Mecklenburg, his department has been having a high collection rate.

Real estate taxes are among the biggest and most stable sources of revenues for cities and counties. Mecklenburg County has been the one collecting taxes in Charlotte and in other cities in the county.

Councilwoman Burgess and councilman John Lassiter raised the issue of uncollected taxes when they saw that the city needed more money to sustain services. James also received a complaint from a resident saying that an owner of an upscale condo has not been paying his real estate tax for 12 years.

Nonetheless, because of the current economic downturn, James has asked tax collectors to list only property owners who owed taxes for the past 8 years or longer in their list of owners whom they will threaten with foreclosure auction.

Industry experts said that in the Metro Atlanta area, home values declined by another 10 to 15 percent in the past six months. Recent market data showed that Georgia is ranked as one of the top 10 states nationwide with the highest foreclosure rate.

Because the housing market is dominated by foreclosure properties, many homeowners are finding it difficult to sell their homes. Frustrated homeowners are finding it hard to compete with the very low market prices of foreclosure properties. They said that majority of prospective buyers would prefer buying bargain-priced Georgia foreclosure homes because they could save a lot of money.

For this month, over 200 foreclosure houses are scheduled to be auctioned off in Atlanta. According to industry experts, many foreclosure homes on the auction block are priced below market value, with some fetching a starting bid of just $49,000. They cited a Northcliffe Drive foreclosed home which was originally valued at about $1.2 million but is now being sold for $189,000.

Industry experts said that the current market prices of foreclosure properties in Georgia are unprecedented and it would be a wise move for buyers and investors to take advantage of the market situation.

The current situation in the Georgia real estate market may bring a smile on buyers’ faces but it is the other way around for sellers. However, industry experts are optimistic that the market will recover in the next five years.

On the other hand, last month’s foreclosure rate earned the state the ninth position in the nationwide ranking. According to market data, Georgia posted foreclosure filings on 11,947 properties in August. Filings include notices of default, auctions and bank repossessions. Last month’s figures represented a 36.5 increase compared with the same month last year and 7.3 percent higher over July 2009.

The state’s foreclosure filing numbers earned it the seventh position in the national ranking of states with worst foreclosure filing rate.

Industry analysts said that the August foreclosure activity showed that there is still an abundant supply of foreclosure properties on the market despite the regulated release of bank-owned properties.

Under the bill, the sale price at a foreclosure auction is not required to be paid immediately. Instead, if a buyer requested more time to pay the sale price, the trustee may agree with the purchaser’s request for additional time. The trustee is the person who conducts the foreclosure auction.

Industry experts said that what is wrong with the law is that it failed to provide necessary guidelines for making the agreement between the purchaser and the trustee. In fact, the law does not require that an agreement should be made between the trustee and buyer. What it gives is an option for the trustee to make an agreement with the buyer.

According to experts, before the introduction of this law, trustees’ role in any foreclosure sale is mostly administrative and did not involve decision-making. This means that trustees could not make any action without specific instructions or advice from lenders.

In a typical foreclosure auction, a trustee was required to send notices at specific times and auctions were required to take place in a specific day and time. The foreclosed property will be sold by bidding and anyone who could make the highest cash offer wins the property.

Under the new law, trustees are mandated to make decisions in determining reasonableness and negotiating agreements. This hinders lenders’ ability to give specific advice or instructions to trustees concerning which offers to accept because they would not know beforehand the requests made by buyers.

The law would benefit buyers because it provides that they be given a reasonable period of time to obtain the cash necessary to close the deal.

But industry experts are worried that the new law could give buyers a viable tool to file legal actions against trustees in the event that they failed to win a bid at foreclosure auctions. This means that potential buyers could claim that trustees unreasonably refused to negotiate with them.

Before the subprime market caused the collapse of the housing sector and the frenzy of foreclosed homes auctions in 2007, T. Rowe has already cut down its investments related to subprime lending.

It was Susan Troll, one of the firm’s credit analysts, who warned colleagues and the company about the danger of investing in mortgage securities backed by subprime loans in 2004. She did not know yet at that time that subprime loans would put a lot of homes into foreclosed homes auctions just a few years after.

Troll related that she felt her first doubts about the ultimate consequences of the boom in subprime lending and the soaring home prices when she attended a conference held by the biggest subprime mortgage servicers in California.

During the meetings, Troll and the other investors were given opportunities to observe service calls between mortgage servicers and borrowers. Troll was able to realize that borrowers were confused about the structure of their home loans and why interest rates would reset to higher rates after a couple of years.

When somebody remarked that the loans were not really mortgages but bridge loans, something clicked with Troll.

Troll realized that lenders were offering adjustable-rate home loans that have low fixed rates during the first 2 or 3 years and that would reset to much higher rates after the low-rate period.

What was stunning was that lenders told borrowers that they can refinance to lower rates after 2 or 3 years if they make their monthly payments on time and thereby improve their credit records. The borrowers got only the first concept – that they can refinance to lower rates. They never thought they would see their homes go to foreclosed homes auctions.

Troll explained that one of the errors of Wall Street, ratings agencies and other financial firms was that they did not have a model for home price declines. They were all forecasting home price increases.

By 2006, T. Rowe stopped buying subprime mortgage securities. When 2007 came and record numbers of homes were being sold through foreclosed homes auctions, T. Rowe has already cut down its exposure to the subprime sector.

Court-managed foreclosure auctions in Tarrant are held every first Tuesday of the month. For the July foreclosure auction, a total of 2,015 homes were listed, an increase of 66 percent from the total in July 2008.

For the first 7 months of this year, Tarrant County has already posted more than 11,000 foreclosures, an increase of more than 20 percent compared to the first 7 months last year.

Real estate analysts in the area said that most of the foreclosure postings are repeat postings as mortgage lenders struggle to cope with continued foreclosure actions.

Most lenders do not have enough personnel to process foreclosures and applications for loan modifications. They are also postponing foreclosure actions on many defaulting borrowers because of lack of personnel. Some banks have also not enhanced their bank systems to cope with large numbers of documents to process.

According to housing analysts, lenders are still digesting the provisions of the Obama administration’s Making Home Affordable Program and still training their personnel on how to implement the program. Some are still crafting policies to guide customer service personnel or mediation representatives in their negotiations with distressed homeowners.

Meanwhile in Dallas County, a total of 2,579 homes were listed for the July foreclosed home auction, an increase of nearly 60 percent from the total in July 2008. In Collin County, 834 properties were listed, an increase of 67 percent compared to July last year. Denton County posted a total of 644 units for the July foreclosed home auction, representing an increase of nearly 70 percent from the July 2008 total.

All in all, the total number of properties listed for the July foreclosed home auction is 6,072, an increase of more than 60 percent from the July auction in 2008. The total for the 12 month period ended June this year has surpassed 35,000, representing a 20 percent rise from the prior 12-month period.

Housing analysts in Tarrant said that the number of housing units for the July foreclosure auction is the highest monthly total in the county’s foreclosure auction history.

However, some of the analysts explain that the July foreclosed home auction figure may not be representing real current data because many lenders are making foreclosure refillings as they are still improving their processes and systems to cope with surging foreclosure and loan modification activities.

The Senate on Tuesday overwhelmingly passed the credit card reform legislation that would control increases in interest rates and provide more protections for users of credit cards. The senators voted 90-5. A similar bill in the House has already been approved.

The credit card reform legislation would require the credit card industry to comply with a list of unprecedented requirements that include provision of advance notice for increases in interest rates, prevention of high charges for over credit limit expenses and the prevention of the practice called universal default, which allows lenders to raise rates when a credit cardholder is past due on another debt.

A similar bill was passed by the House earlier this May. The two versions will be combined and then sent to President Obama for signing. The bill rode to approval on a wave of anger over difficult times caused by foreclosed home auction events and perceived greed by large financial companies.

Banks, credit card issuers and other financial firms historically have been powerful in Washington, but during the debates on the credit card issue, senators condemned them for their exploitative practices. Surely, the economic effects of foreclosed home auction events have helped pushed the senators to support the bill.

Senator Christopher Dodd, who co-sponsored the reform bill, said that the practices of the credit card industry are abusive and they need to be stopped.

Democratic Senator Claire McCaskill also explained that thousands of emails have been received by her office in the past several months all complaining about abusive credit card practices.

McCaskill spoke before fellow senators last week and reiterated that the credit card legislation is the most important bill that affects consumers directly, especially during these times when hundreds of thousands of Americans have lost their houses to foreclosed home auction events.

Another Democratic legislator, Senator Tom Udall, also supported the bill by saying that credit card issuers that are fair to consumers have nothing to worry about.

In a public meeting last week in Albuquerque, President Obama again expressed his support for the bill, criticizing credit card ads that offer low rates but do not inform consumers that the rates can increase anytime.

According to White House reports, current overall credit card debt is $963 billion, an increase of 25 percent over total debt 10 years ago. The average household credit card debt in 2007 was $7,300.

Credit card debts are among the debt burdens of many homeowners who have lost their homes to foreclosed home auction events.

The schemes will help homeowners find ways to avoid foreclosure through other means, such as selling homes or giving back the houses to the mortgage lenders. If a homeowner could no longer afford to keep his house from being sold in a foreclosed homes auction, he should find ways to preserve his credit record so he can still apply for a mortgage loan in the future when his employment and finances improve.

One of the proposed ways is to encourage deeply troubled homeowners to sell their houses in a short sale. Short selling involves getting approval from the mortgage lender to sell the delinquent property at a price lower than the mortgage balance. The mortgage lender agrees to accept the sales proceeds as a full payment for the mortgage loan, preventing the filing of a foreclosure case.

Another recommended scheme is the deed-in-lieu transaction in which the defaulting homeowner returns the delinquent property to the mortgage lender. The lender accepts the returned property as full payment for the mortgage balance, also preventing the filing of a foreclosure case.

Short selling and deed-in-lieu schemes have been used to prevent foreclosure before, but the federal program will facilitate the process for troubled homeowners. Standards and systems would be developed to make the processes more efficient.

HUD Secretary Shaun Donovan and Treasury Secretary Timothy Geithner are set to meet with several homeowners who have successfully reduced their monthly payments under the Obama administration’s program to cut down the number of houses sold in every foreclosed homes auction across the country.

A government official said that the Making Home Affordable program has benefitted a total of 50,000 homeowners in the first two months of the program.

Short sales are typically used by borrowers to keep their credit records clean, but oftentimes planned short sales have not been successful because of the long process involved and the lack of mortgage personnel to process short sales quickly.

The administration’s Making Home Affordable program was designed to help up to 9 million distressed homeowners save their houses from foreclosed homes auction through loan modification and loan refinancing. As of date, 14 mortgage lenders have committed to participate in the program.

The expansion of the program is expected to help seriously troubled homeowners survive the harsh effects of losing houses to a foreclosed homes auction.

The foreclosure crisis could have been a bane to thousands of homeowners but to some, it means an opportunity to own affordable distressed homes. The real estate foreclosure market in the state is inundated with cheap bank foreclosed homes which sell for as low as $20,000 per unit. The reason for this? Banks are in a hurry to sell foreclosed properties in their inventory.

However, real estate agent Chris Mayhew cautions potential buyers of foreclosed homes about deals that sometimes are too good to be true. Housing experts agree that there are many bank foreclosed homes on the market, but there are also lots of risks involved in those deals, especially with the property’s condition.

It is the practice of banks to buy back the repo houses at foreclosure auction. Then, to recover immediately their investments and avoid the cost that they will incur if the foreclosed properties will remain unsold for a long period of time, banks will quickly sell these properties at bargain prices to entice buyers.

And most often, these foreclosed properties have structural defects and other problems that are in need of repair, such as outdated electrical systems, dead furnaces or unsound roofs. And usually, buyers inherit these problems in addition to the responsibility of having them repaired.

Real estate agents said that in some cases, foreclosure properties are in such bad shapes that lenders refused to finance them. They added that many repossessed homes are acquired by investors who have high credit limits or lots of cash.

These investors would buy foreclosed properties, repair and rehabilitate and sell them at a profit. They claimed that it is common for foreclosure homes to need major repairs, including electrical work, roofs, furnaces, windows, repainting, plumbing repair and trim work.

But still, they keep on buying bank foreclosed homes because they expect to fully profit from the venture in about five years when the real estate market rebounds.