NYC’s Biggest-Ever Foreclose Fire Sale


jacob-javits-centerIt’s New York City’s own version of a mortgage bailout – a massive auction today at the Javits Center where banks hope to unload scores of foreclosed homes, some for 60 percent discounts or more. The bidding for one five-bedroom, $550,000 Queens home starts at a mere $69,000.
More than 4,000 bargain hunters are expected to attend the largest foreclosure auction ever in the city, capitalizing on the misfortunes of more than 375 homeowners who lost their properties to lenders – including federally bailed-out banks.The fire sale began at 8 a.m., with the properties – located in the city, suburban counties, New Jersey and Pennsylvania – starting as low as $500.

Many of the homes had been valued at upward of $700,000 before being lost to foreclosure. Now they will likely sell at a 30- to 60-percent markdown, according to the auction house, the Real Estate Disposition Corp.

The auction is open to the public. Admission is free, but buyers need a $5,000 cashier’s check and valid ID. Only cash will be accepted for some homes.

“There is going to be a $300,000 home that sells for $100,000,” REDC spokesman Rick Weinberg said. “The person that gets that house, they are going to be getting a great deal.”

Many of the properties are sorely in need of improvements. A Parsippany, NJ, house once valued at $610,000 has a starting bid of $169,000. But the roof of the four-bedroom home is damaged.

A four-bedroom home in the Westchester town of Port Chester was once valued at $740,000, but the bidding starts at $149,000.

Weinberg, whose group earns a fee for every home sold, said the auction helps the economy.

“The longer a foreclosed home stays vacant, the more it deteriorates,” he said.

“When someone buys it, they are paying a mortgage, they are paying property taxes, and they are hiring people to repair and upkeep the home. All these elements create jobs and help move the economy forward.”

But the auction has drawn criticism from politicians, grassroots groups and homeowners because many of the banks who foreclosed on the homes – Wells Fargo, Citibank, JPMorgan Chase and Bank of America – were beneficiaries of billions in taxpayer bailout dollars.

“In these tough economic times, we need to preserve the American dream, not auction it off,” said US Rep. Carolyn Maloney (D-Manhattan).

“I am working in Congress and with the Obama administration to keep people in their homes. Just this week, we passed a measure in the House that would allow for loans to be modified, making millions of mortgage payments more affordable.”

One organization, the Bail Out The People Movement, plans to protest outside the auction.

“These same bankers have received hundreds of billions of dollars of bailout money while they’re throwing working people out of their homes,” the group said last week.

“We cannot and must not be indifferent about the ugly spectacle of the auctioning of the homes of displaced families.”

The mega-auction comes just days after the Obama administration detailed its $275 billion housing plan to keep 9 million homeowners out of foreclosure.

{NY Post/ Newscenter}