Foreclosure is a word we hear every day in the news, and we Realtors certainly have to speak the word far more often than we wish we had to these days.
I have shown clients many foreclosed properties this year, and I have seen firsthand the effects of foreclosure on the house itself, and its neighborhood. It isn't pretty.
And foreclosure hit very close to me this summer when a property in my townhome community fell into foreclosure and was finally auctioned off. To describe the process could be lengthy, and it might be boring to read. But I want to simply tell you, the reader, how quickly and how brutally a homeowner's world can come to an end, at the auction.
I attended the auction of the townhome in my community, along with my homeowner association president, on a September morning in Chicago's Loop. (Please click on the link below to read about the company that conducts these auctions, Judicial Sales Corporation.) We rode up the elevator in a lovely office building on Wacker Drive and exited at the correct floor, and were guided into a small meeting room. It was set up with some 40 folding chairs for visitors to the auction. At the front of the room sat the auctioneer, with an assistant or two who acted as runners, carrying file folders back and forth into the private offices of Judicial Sales Corporation. The HOA president and I knew our neighbor's property was to be auctioned at 10 am. We were seated by 10 am and waited for the proceedings to begin.
Every visitor was handed a list of the properties to be auctioned that week. Some 250 properties every single day were scheduled to be auctioned. They were handled in no particular order, so if the visitor was there to observe or to try to buy a specific property, you did not dare leave the room because each property is dealt with in less than 30 seconds. That's right, 30 SECONDS.
The auctioneer picks up a file folder, reads off the court case number, the property address, and the "opening bid." (The bid is actually the dollar amount that the court has awarded the mortgage lender who is left with a property and nobody to pay the mortgage for it. In most of the cases, the lender wins the auction, because nobody else wants to bid on it.) The auctioneer asks "Do I hear any other bids?" She waits about 5 seconds, and then says "going once, going twice, sold." She makes some notations on the file, closes it up, and hands it to her assistant, and it's over with. Done. Somebody just lost his or her home.
The particular frustration that my homeowner association president and I felt that morning was that our neighbor's house did not rise to the top of the file folder pile before the auctioneer looked at her watch, said "Well, it's 10:45 am now, time for a break. We'll start again at 2 pm this afternoon." WHAT???? 2 pm?? Neither of us could be back at 2 pm that day, so we did not actually get to witness the end of our ex neighbor's homeownership. But it was an enlightening experience, none the less. In our neighbor's case, the lender won the auction (body else bid on it), and now it has been listed for sale with a broker who deals rather exclusively in foreclosures.
The ins and outs of foreclosure are deep and complex. I plan to write about it from time to time, but in small chunks so as not to overwhelm OR to bore the reader. But just let me say that foreclosure is a very sad thing, for everyone around the home is touched by it in a negative way. If you are facing problems in paying your mortgage, or know someone who is, please contact that lender right away, or an attorney who specializes in foreclosure situations so that you can save as much of the situation as possible. Going into a foreclosure without a good legal adviser will cause you even more harm. Minimize the damage. Get help, please. I can provide names of attorneys who work in this field, and the cost of their services is minimal compared the loss incurred by the homeowner who tries to navigate the process alone.
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