Auction houses prosper as foreclosures mount

Business is booming for Dave Webb, principal of Dallas-based Hudson & Marshall real estate auction house.

He hopped on a plane Friday in Georgia to fly to Denver, where 150 foreclosed homes are on the auction block today, then it's on to Las Vegas for Sunday's auction at the Ritz-Carlton at Lake Las Vegas of some 200 foreclosed homes.

Next weekend he's got 250 homes to sell in Phoenix.

"We'll be back in Las Vegas about every 90 days for the next year or so," Webb said. "Right now, with the economy, you know about mortgages. This is an easy way to move a lot of properties in a short period of time."

When he was here in August to sell about 90 homes, Webb said foreclosure auctions are becoming more prevalent in Las Vegas.

Kris McCormack, owner of Las Vegas-based RealEstate AuctionbyOwner.com, said she conducts about one auction a month.

Real Estate Disposition Corp., another home auction firm, is advertising more than 300 foreclosed homes for auction Dec. 8-9 at the Plaza in downtown Las Vegas.

Webb said he works with several national lenders and they're becoming more comfortable with the auction process.

"They know we don't just give properties away. We market the auction heavily for 45 days and work with local Realtors. You saw the heavy active bidding the last time we were here. That's going to bring true market value," he said.

Nevada is No. 1 in the nation with 40.5 preforeclosure filings per 1,000 households through October, California-based Foreclosures.com recently reported. The state also has the most real estate owned filings, or lender-owned homes, with 14.5 per 1,000 households.

Clark County is sixth in the nation with 26,273 preforeclosure filings and seventh in the nation with 8,734 real estate owned filings.

The once-booming housing market has fallen throughout the country with California and Florida "leading the pack" in foreclosure auctions, Webb said.

"In Nevada, there was a lot of overbuilding combined with investors using risky subprime adjustable-rate mortgages to purchase homes, speculating home prices would continue their increase along with demand," Webb said. "That didn't happen and now Nevada is overburdened with foreclosed homes."

California, Florida, Nevada and Arizona hold more than one-third of the nation's subprime adjustable-rate mortgages, the Mortgage Bankers Association reports. These states also have a high share of investor loans made to buyers who do not plan to live in the house. Investors comprised 32 percent of Nevada's defaulted loans, a second-quarter association survey found.

Homes at the Hudson & Marshall auction are valued from $65,000 to more than $600,000. They're sold "as is" and come with a clean title -- no back taxes, liens or other encumbrances. Buyers can find property listings and auction details at www.hudsonandmarshall.com.

Winning bidders will be required to make a down payment of $2,500 or 5 percent of the sales price, whichever is greater. It's a "reserve" auction, which means sellers have the right to accept or reject any offer. Webb said Hudson & Marshall averages 90 percent closing of approved bids.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.