Hudson & Marshall is set to auction more than 150 foreclosed homes in Phoenix owned by the Department of Housing and Urban Development, selling only to owner-occupants who plan to use the property as their primary residence for at least a year. H&M is an auction house based in Plano, Texas. The auction is scheduled for March 26 at the JW Marriott Desert Ridge. Dave Webb, principal at Hudson & Marshall, said the idea is to auction the homes to low- and moderate-income families, in line with HUD’s mission. This will serve a dual function, he said. “Not only do auctions of foreclosed homes help buyers grab great deals but they also help raise property values by putting new homeowners into the properties,” Webb said. Qualified buyers may receive special financing through the Federal Housing Administration — a $100 down homebuyer financing and up to 3% in closing costs paid by HUD. Potential bidders must bring a $1,000 cashiers check on auction day made out to themselves or to HUD. All properties are sold “as-is,” Hudson & Marshall said. Another auction firm, Auction.com, recently sold 100% of its condo inventory in South Florida where the company hosted an auction. The 20 luxury residences at Foundation on Ocean Boulevard sold at 114% of the seller’s reserve price, for a collective $7.6 million. Starting bids at the Fort Lauderdale auction ranged as low as $124,000 for a two-bedroom with a previous high value of $585,000, and as high as $279,000 for a three-bedroom with a previous high value of $999,900. Jeff Frieden, CEO of the company formerly known as REDC auction house, said this is the sixth time in the last 10 auctions that 100% of inventory was sold. The other auctions were in Dallas, Miami (twice), Houston and Annapolis, Md. “Our auctions attract buyers looking for attractive pricing and low interest-rate financing while our sellers benefit even more as we convert their standing inventory,” Frieden said. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.
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Even in normal conditions foreclosure is a cumbersome solution to the problem of the defaulting borrower. It can produce vacant and abandoned properties, because as soon as the residents receive notice that the house will be going into foreclosure, they face uncertainty about when they will be ousted, which prompts many to vacate the premises before getting thrown out.