No Bidders Show For Newhall St. Auction

Is there a minimum bid on these auctions, or if someone had shown up could they have bought the house for one dollar?

This is so sad that a house built to help lower income folks buy a home, was foreclosed on and will belong to the federal government who will list it for the market rate of $330,000.
You have to ask if the previous homeowner was adequately prepared for the costs involved outside of the monthly mortgage like insurance, maintenance and repairs, taxes, utilities, etc.
The pandemic related job losses and the tenant eviction moratorium also made it more difficult for lower and lower middle income homeowners with tenants to afford the losses of income over that period of time.
I also wonder how the federal government can take possession of a home built by an affordable housing organization for lower income buyers and then raise the price so that no lower income person can afford it, even with CHFA’s lower interest rates.
This won’t help lower and lower middle income families find affordable housing.
We need more affordable apartments for people who don’t want or can’t handle the responsibilities of home ownership. We need a middle ground of more affordable condominiums for people who want to own a home and build generational wealth, but don’t want to have to take care of a private yard or exterior maintenance. And we need small affordable starter homes on small lots for people who feel they are ready to take on the full responsibilities of homeownership inside and out, on a smaller more affordable home and lot.

Not really for a dollar. This just shows you that the regular MLS has better deals on it right now. Many of these foreclosures are overpriced. They had appraisals done before the bottom fell out of the market when interest rates went up. The entity, state, federal, or mortgage, who is foreclosing on the property puts in a bid for it as well. They get what they are owed and pay the difference in their bid price. They are then allowed to sell it for whatever they want. If home prices go up, they will hold onto it for future gains. If prices are on the way down, they will sell sell sell.

Esbey, as the sign in the photo notes, bidders would have to had to submit a $33,000 deposit.

Kevin, good point about the sign. Is $33,000 the minimum bid? Or does the bank have a standing bid for the amount of the current mortgage?

Curious just because this process of holding the auction in front of the house (but you can't go in!) seems like some weird carry over from the 19th century. One that leaves houses vacant for longer than necessary.

Oops, sorry, just noticed that Justchecking explained that the bank does have a bid in.

@Esbey: In order to bid, potential buyers have to put up $33,000, usually via a certified bank check. This is to discourage people without funds or the potential to get funding, from "buying" and then failing to complete the sale.

The builders, non-profits, lawyers, contractors, tax collector all wet their beaks. Whether the hapless homeowner loses the house or not is immaterial.... they got to live there, probably free for a long time. Who gets hosed in this? The taxpayers who fund these projects and then lose the tax revenue when the owners fail to hold on to the property. It's a nice living.... for some.
PS--- Esbey- All the really good foreclosures get taken by friends of friends of friends before they every get to market. The sign and everything is like a formality. SOS different day... This was done in the 80's too.

Patricia, any idea why potential bidders aren’t allowed to get a look inside the house? I understand why they would need to sign a liability waiver. But not having a good idea of what you are bidding on would tend to decrease the number of bidders and the bids, which is in no one’s interest.

Interesting to note that this was the 2012 Vlock Building Project, designed and built for NHS by Yale School of Architecture students. I lived as a tenant in the 2009 house for several years and it was also foreclosed upon and sold for a fraction of its value. Sadly, I had no opportunity to bid as the owner hid the foreclosure from me. The buyer was able to sell it for a $100k profit a couple years after winning it at auction!

Looking at the court documents, Mr. Boyd, the mortgagor, had about $100K in equity in the building. At any time in this process, he could have sold the building, paid off the mortgagee and other lien holders, and still had tens of thousands in his pocket. He choose not to do so, and now has nothing.
Esbey, it's worth noting that beyond the $33K deposit, any winning bidder needs to close within thirty days. This requirement generally means buyers must have cash. My wife bought our house at a foreclosure auction, and had to borrow money from her dad to pay for it until she was able to get a loan, which came through about a month after she had the house.

PS--- Esbey- All the really good foreclosures get taken by friends of friends of friends before they every get to market. The sign and everything is like a formality. SOS different day... This was done in the 80's too.

AMEN!!

NHS, like other NeighborWorks America non-profit housing developers does a standard required training program with those they serve to help people to prepare for home ownership. Sometimes things happen. An unexpected catastrophic medical bill or a job loss can put people over the edge. NHS sticks with those they serve. They helped us buy our home many years ago, and we turned to them recently when an unexpected situation threatened our ability to keep our home. They helped us through their expert knowledge of banking institutions and insurance. We are very grateful also for their help with energy efficiency. They are a huge help and New Haven is lucky to have them.

Though the organization states these situations are rare it would be interesting if a policy or contractual stipulation could be made that they have first right to buy if the owner forecloses. Seems it would fall in line with their missions statement if they could pick up the property under the "market value" and give opportunity to another household.

There is no minimum bid, however there is a minimum deposit you need to show. You do not have to close within 30 days of the sale. You have to close within 30 days of the court approval which can take 2 to 3 weeks post auction. Even that has been given latitude. Homeowners do not have to let someone in their house. But vacant properties, or homeowners who allow it, are allowed access with a court order. The committee who sells the property gets insurance for the day of sale. There are no waivers for bidders to sign.
Lenders often bid their debt or roughly 70% of the appraised value to protect from potential bankruptcies thereafter.
Foreclosure sales are often indeed cash buyers, but some get hard money or are prequalified to close on their loan. There are very few “friend to a friend“ deals.