Foreclosed homes auctioned to the highest bidder

El Paso, Texas Foreclosure News

"It's tough. It's very competitive," Sanchez said, who is a first time home investor. "I don't know if this is the best way to buy a house. It all depends on the profit I make, but it's a very unsure thing."

On Tuesday, about 40 people gathered in the El Paso County Courthouse lobby, hoping to make a bid on the house of their choice. The auctions are held on the first Tuesday of every month, and those interested should purchase the list of foreclosed houses from the Lawyers Title Company, 301 E. Yandell.

Sanchez said she buys this list, goes around to see the houses and then rates them from 1-to-5.

"This home I rated a 5," she said of the four bedroom, two bathroom house she bid on for $80,000. "The house is worth $125,000."

Properties on the list range from tiny lots to mansions, Sanchez said. The prices start at $2,000 and can go up to $450,000, she said.

But the process is not always a walk in the park.

Even after paying $80,000 up front, Sanchez said she has to deal with the family who is still living in the residence.

"I don't like to have to go through constables and sheriffs," she said. "The lady who is in the house said she resolved the problem, but she probably gave money to a crook. It's sad because she has kids."

Many scam artists prey on desperate people, said Rai Sarabia, an El Paso Affortable Housing counselor.

People should beware of letters claiming to stop the foreclosure immediately when they sign a document and give a payment, because they may be signing over title to their property and becoming a renter in their own home, he said.

"We offer free services," Sarabia said. "The first step is that as soon as they know they are in trouble, they should set up an appointment" with a couselor.

According to the Texas Property Code, if the borrower stops making payments, the lender must notify he or she by mail that they have 20 days to make arrangements. If the borrow does not make arrangements, the lender has the power to begin the foreclosure process.

Sarabia said people who know they are having trouble with house payments, should talk to either their lenders or a affordable housing counselor immediately, because the lenders are willing to work with borrowers.

From July 2005 to June 2006, Texas led the nation with 36,362 foreclosures, according to a study by the Texas Department of Housing and Community Affairs. In May 2006, Dallas had the highest foreclosure rate at 6,107 and El Paso had a foreclosure rate of 476, more than three times lower.

In 2005-06, El Paso's monthly foreclosures equaled one for every 1,861 mortgages in the county, according to the same study. Statewide, there was one foreclosure for every 1,050 mortgage, much higher.

J.R. Fletcher, a Century 21 Haggerty Realtor, said one of the reasons for the hike in foreclosures in Texas is lenders were giving out adjustable rate mortages that increased after a couple of years.

He said he had one client that went from 7 percent interest rate and after a few years the interest rate increased to 15 percent.

"So after a few years people think they're going to have a nice payment of $600 a month and the adjustable mortgage rates mature, and guess what happens, their payments go up from $600 to $1,900 a month."

Fletcher said the financial institutions should have issued the loans more responsibly.

"Personally, if people barely qualified, they should have never neen allowed to have a loan," he said.

But every foreclosure situation is different, and for Jose Macias stopped house payments were due to personal circumstances.

"I went through a divorce ... and I hurt my back at work. I've been out of work for over a year," he said. "It's sad, and it puts us under a lot of pressure."

Macias, who was going through foreclosure, said he spoke to his bank lender and was able to put a stop on the foreclosure for one month.

Macias, who has for kids and is now remarried, said it is essential he do everything possible to keep his home.

"It makes it hard on us especially when you have a big family," he said.

Stephanie Sanchez may be reached at ssanchez@elpasotimes.com; 546-6137.

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