The auction was in a small ballroom at the Boston Park Plaza Hotel. It was held by Real Estate Disposition Corporation (REDC), which travels all around the country helping banks off-load their "distressed properties." About 200 people showed up to bid on just 36 homes, scattered all over New England. One sold for a less than a quarter of its original value.
REDC makes its money from a 5 percent buyer's premium. It's doing pretty well right now. And a spokesman, Rick Weinberg, told me it's going to do even better next year.
"We're already in the process of basically having an auction almost every other day," said Weinberg. "And we could wind up doing an auction on an average of almost a daily basis."
In the last two and a half years, REDC has sold $6 billion worth of property for banks. This is despite a little lull this year after banks agreed to a temporary moratorium on foreclosures.
"It was a speed bump on the Indianapolis 500," said Rick Sharga, a senior vice president at RealtyTrac. "And we have had nine consecutive months now of more than 300,000 foreclosure actions — a month since the moratoria were lifted."
This "race" is horrible — unless you're an auction company like REDC or you're one of the bidders getting a great deal on someone's loss. For example, at the auction I went to, George and Mary McCloud landed a second home on Cape Cod for $90,000. They hugged and kissed after putting in the winning bid.
"I prayed about it, you know," said George. "And we said, 'Don't go above 80.' But then, what the heck, you know ... [we can] always can sell it."
True. Question is, for how much?
This program aired on December 28, 2009.