- Title: USA: New York foreclosed home auction attracts praise and criticism
- Date: 9th March 2009
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (MARCH 8, 2009) (REUTERS) ENTRANCE TO THE LENDER FORECLOSURE HOME AUCTION AT THE JACOB JAVITS CONVENTION CENTER ORGANIZED BY BY THE REAL ESTATE DISPOSITION CORPORATION (REDC) PAN: BIDDERS LINING UP TO REGISTER VARIOUS OF BIDDERS AT THE REGISTRATION DESK VARIOUS OF A BIDDER, CHARIS MESIOURIS, WHO WAS LOOKING AT BIDDING ON SEVERAL INVE
- Embargoed: 24th March 2009 12:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Economic News
- Reuters ID: LVA7L5V8ZQULH7Z5BS4YVSCQR7KP
- Story Text: Hundreds of bidders turn up for New York City foreclosed homes auction. The event also drew protesters who blame banks for an epidemic of homes losses.
An auction of foreclosed homes in New York City on Sunday (March 8) attracted hundreds of bidders keen on grabbing a home at bargain prices. The sale also drew protesters who blamed banks for an epidemic of home losses and called for a moratorium on evictions and foreclosures.
The auction was organized by one of America's largest real estate auction firms - The Real Estate Disposition Corporation (REDC) which also organizes online bidding through its website - USHomeAuction.com. It put up more than 375 foreclosed homes in New York, New Jersey and Pennsylvania under the hammer at the Jacob Jacob Javits Convention Center. REDC representatives claimed that many of these homes were being sold at 50%-60% off the previous high value of these properties. Hundreds of bidders attended the auction not just to look for dream homes but also to buy properties for investment purposes. According to REDC, about 70% of the attendees were looking for a home to buy while the remaining 30% were investors.
In response to the criticism that foreclosure auctions received by protesters who called it unfair to the home-owners who were being foreclosed upon, Rick Weinberg, spokesperson of REDC-USHomeAuction.com argued that putting new owners into these foreclosed homes contributed to the re-invigoration of the economy.
"When we put a family back into a home, when we hold these auctions, somebody buys the home, we get them back into the home, they're paying the mortgage, they're paying their property taxes, they're paying an electric, gas and phone bill. They're getting landscaping and painting done for the house - all these elements help the economy move forward," said Weinberg.
Apart from the motivation of low homes prices, Weinberg also said that the reason auctions such as this drew a lot of bidding were the favorably low interest rates being offered by many mortgage lenders.
According to REDC, it established industry records in 2008 by auctioning 32,799 foreclosed homes for a total purchase price of $3.4 billion.
The company also claims it is off to a record start this year, having auctioned more than 4,300 foreclosed homes for more than $350 million USD thus far.
Debra Scott, a single mother, attended the auction hoping to buy a dream home that she said she would not have been otherwise been able to afford. Scott was eyeing a $790,0000 USD home in Westchester, New York that was listed for $199,0000 USD after foreclosure by REDC.
"The economy is such that I couldn't afford to buy a house with the regular market, the retail. So, I came here because I would like a better life for my children and we're looking for a house to buy that could accommodate us and that I could afford," said Scott.
On the other hand Bob Albanese along with his wife Louise was attending the auction to school themselves on how such sales work because they are keen on picking up one or several homes as an investment in future such auctions.
"The way I'm seeing it in most markets here prices are back to where they were in 2003. So you know I don't think this happens again in our lifetime, that we have prices like this, so it's a great time to buy," said Albanese.
While Frank, who didn't give his last name, also attended the auction looking for a house to buy as an investment. His bid was successful. He bought a home in Long Island, New York for $130,000 USD. He said the value price of the property was $400,000 USD and that the starting bid had been just $69,000 USD.
"Nerve wracking. Little nerve wracking. The auction went quick, understanding the people as they're rattling off the numbers is very difficult but there were people there to help you out, so I feel confident now," said Frank.
Even as Frank exulted in the purchase of a home as investment, outside the convention center, a handful of protesters carried signs reading "Banks get bailed out, people get thrown out."
The protesters said their argument was not with would-be homebuyers, who streamed into the auction without taking much notice, but with banks such as AIG and Citibank that had reaped benefits of government bailout funds after years of irresponsible lending practices.
"They're not providing loans. They're not really helping the people. They're just helping the banks make other purchases but it's not helping the people. So, the money should go directly to the people to help them," said Branda Fandburg, a member for the Bail Out the People Movement, which staged the demonstration.
She called on Washington to declare a moratorium on foreclosure and evictions to give struggling families a chance to get their finances in some kind of order and potentially keep their homes.
The protest group said that millions of people had already lost their homes in the mortgage and financial crisis, with millions more expected to suffer the same fate.
Foreclosures taking place are in violation of the federal Housing and Economic Recovery Act, it alleged. The group plans to stage a major demonstration on Wall Street on April 3. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None