At the Minneapolis Convention Center is being held a record foreclosure auction. On the lists are 325 houses repossessed by banks. Some are being bid for a song. A prize house in Stillwater once rated at $1.4 million will start of with a $729,000 bid at the foreclosure auction bonanza!

Such foreclosure auctions with 100 to 700 units are popping up repeatedly at Detroit, Dallas, Miami and Sacramento. Overnight lenders are finding themselves to have become landlords – a role they are reluctant to play out. Since the last 16 years America has not seen such a slump in the housing market. The growing number of auctions is indicative of the hard days with the sword of foreclosures looming large over the future.

Something akin to this crisis happened in the 1980’s. Today it is the floating rate of sub-prime loans that has led to mass scale foreclosures. For the lenders money has stopped flowing in. There is only the dull weight of bricks and mortars. An expert opinion is the crisis of the 80’s didn’t go – it just went underground and remained dormant only to surface again in 1997 when lenders stoked up the fires.

In the Twin Cities 34,800 houses are for sale because foreclosures have been steadily rising for some years. It is a record. This year 8,000 have slipped into foreclosure and sold in Sheriff’s sale. This step is necessary before the lender gets it back – that is REO or real-estate-owned.

The names of the lenders tend to be a guarded secret. The buyers come from across the public – investors, home seekers and the curious. It is a mixed menu that is available in these foreclosure auctions ranging from a boarded duplex to a rambling county house. There are condominiums as well as family units. To bid registration is free but after that step it is better to be cautious and scrutinize the terms and conditions. Buyers cannot later complain about weak foundations and choked drains. During the weekends the properties can be inspected. The minimum bid is fixed and that apart there may be a ‘reserve’ bid. The serious buyer must be ready with cashier’s check and be prepared to pay extra 5% for costs. At these foreclosure auctions winning bidders have 21 days to finalize the deal. Hefty penalties are in store for those who change their minds.

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