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28 Houses In 51 Minutes: No Buyers, No Bidders

Twenty-eight houses sold in 51 minutes, each auction the final spin in a harrowing death spiral for 28 families that believed just a year or so ago that they had found security and comfort.

On a blustery spring afternoon at the edge of a parking garage in Upper Marlboro, eight people stood in a semicircle in front of the auctioneers whose job it was to sell off the houses those 28 families couldn't pay for anymore. Each person in the audience -- all professional house buyers who travel the circuit of courthouse auctions -- spent the hour glued to a cellphone, awaiting instructions from anonymous investors.

At the end of the hour, all eight buyers, even the ones who had blank bank checks in their hands, stood up and silently walked away.

The house on Canberra Drive in Clinton, listed for sale for $450,000, went back to the bank for $297,000. The house on Harbour Town Drive in Beltsville, bought 15 months ago for $800,000 and assessed by the taxman at $528,000, went back to the bank for $640,000.

"Can I get any bidders, any buyers, any advance on $161,000" for a house in Capitol Heights, auctioneer Kemp Blair barked into the crisp air, and he might as well have been talking to himself. The only buyer for that house was the one that bought nearly half of the day's offerings, Deutsche Bank, acting as trustee for the loan service company that got stuck when yet another family stopped making its mortgage payments and walked away.

No bidders, no buyers. Not a single bargain hunter found anything worth taking a chance on in this lot of houses in Prince George's County. Blair packed up his big pile of files -- two milk cartons full -- and prepared to move on to the next auction.

"It's kind of sad, really," he said.

Most of the families whose houses were sold on this day came here from Africa and Central America. They own small businesses and work for the government and sell cars and toil in the hospital. These houses were their dreams. They were more committed to the idea of riding the American wealth elevator of real estate than to the ideals of democracy: Of the 28 people whose houses were auctioned here, one is a registered voter.

A passerby stopped to watch the auction for a few minutes. When Blair called out for bids, the visitor perked up: "Take food stamps?"

"Cash or bank check," Blair replied.

Again this time, no bidders. The Federal Home Loan Mortgage Corp. bought a house in Oxon Hill for $337,000, $13,000 less than what the last owner paid for it in July.

A house in Hyattsville went for $150,000 less than the mortgage on the property. Still no bidders.

"Rolling right along," Blair said.

The 28 families whose last gasp of hope for their old houses expired at this auction have, among them, 46 disconnected phone numbers. Two had forwarding numbers, both unpublished. When you lose your house, you lose a lot more than lodging.

In any package of pain, someone is doing well. The auctioneers are busier than ever. But even their success reflects the tough times. Blair is here because his actual career wasn't going anywhere. He was a real estate developer.

"We haven't had a sale to a builder since December '05," he says. "We were on top of the world in December, and by February, we were, like, 'What's happening here?' " He and his partners sold a lot in West Virginia for $26,500 a couple of years ago; they recently sold one right next to it for $5,500.

So he travels the highways of Maryland on the auction circuit. The business these days is mostly foreclosures, the banks collecting enormous portfolios of property and then trying somehow to unload the houses.

"I'd rather be building properties," Blair says. "I'm just glad to be working in real estate, getting paid for talking."

Even if no one is listening. "Can I get any bidders, any buyers?" Silence.

Blair turns to the man beside him, the fellow in the crisp white shirt who represents the banks. The trustee nods. Blair proceeds with the formalities, without much conviction: "Sold."

Of the 28 families whose houses went this day, at least 11 have downsized to apartments, at least four have left the state, and not one returns a call.

"No buyers, no bidders."

By Marc Fisher |  May 4, 2008; 8:57 AM ET
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Comments

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That's the way the cookie crumbles. In the US people buy too much: too big a car and way too often, too many clothes and consumer goods in general and way too big a house. I saw a couple with a baby on the H&G network who felt 3,400sq ft was way too small for them.

The American dream has suffered from inflated expectations without the commensurate capacity to afford it.

It's all about stuff. It's all a false dream.

Posted by: George Siamandas | May 4, 2008 11:42 AM

Most of the families whose houses were sold on this day came here from Africa and Central America. They own small businesses and work for the government and sell cars and toil in the hospital. These houses were their dreams. They were more committed to the idea of riding the American wealth elevator of real estate than to the ideals of democracy: Of the 28 people whose houses were auctioned here, one is a registered voter.

Then why do both political parties pander to immigration lobbyists? Because they are dirt cheap labor. Limousine Liberals (Zoe Baird, Madonna, etc) and Country Club Republicans (New York and DC) LOVE minimum wage laborers. More bucks for the rich.

But come the next few years of elections, they will pay the piper for ignoring the middle class.

Posted by: Immigration Reform? | May 4, 2008 11:54 AM

I feel bad for these people, but let me ask everybody something...

I got out of school 30 years ago and I moved to DC and after 3 years I bought a house. a $70K townhouse. Not much, but I lived in it for 5 years and then after getting married moved up after I could afford a 20% downpayment.

What I'm talking about is the *actual* American dream.

The American dream is not to buy an overpriced house at the peak of price and hope to god that interest doesn't go up or that I can sell it before the bills come true.

These people weren't living the American dream, they were buying into a ponzi scheme, one that involved less tha honest banks banks, realtors, appraisors and yes, willing buyers.

There are still foolish people who believe real estate never drops, even though it's happened now 3 times in the past 3 years (and signficiantly, too).

So before you start spouting on about "American Dreams", heavily leveraged houses hoping for an uptick in prices and and a downturn in interest is not the American Dream, no matter what anybody tells you.

Posted by: Ombudsman | May 4, 2008 12:34 PM

"Death spiral". Puh-leeze.

Posted by: Happily renting | May 4, 2008 2:52 PM

American dream? Come on, now. How many of these people were greedy speculators who bought their houses at extravagantly inflated values in the expectation that prices would go up forever. Look at the $800,000 house in Beltsville, which even local tax assessors felt was only worth $528,000. There are two in that neighborhood that currently are for sale in the $510,000 to $520,000, so what fool would pay $800,000 for a house there, and how did a legitimate assessor agree that was a fair price for that property. There is much, much more to this story, I think.

Posted by: Anonymous | May 4, 2008 4:59 PM

The moment I saw Marc's comment about most of the former owners being from Africa and Latin America, I knew a nativist would pounce on the point. There's nothing in the story about these being illegal immigrants. Marc states that these were shop owners and government workers. Neither are minimum wage occupations. So, leave your venom for posting on Desde Washington.

BB

Posted by: Fairlington Blade | May 4, 2008 6:24 PM

Wow. I hope that none of you ever lose your job or suffer any sort of hardship. These people suffered a traumatic moment in their lives and a bunch of jerks on the internet pounce.

Just remember what goes around, comes around.

Posted by: Arlington,VA | May 4, 2008 6:32 PM

A lot of people seem to be jumping to some real negative conclusions.

First, noting in Marc's article indicated these people were here illegally. I am a VERY strong advocate of enforcing our immigration laws and fully support the efforts here in PW county aimed at ILLEGAL immigrant. But anyone and everyone who follows the law should be welcome here. 99.99 percent of the Africans, Asians, Indians and yes Latinos working in the medical and technology fields are here legally. We shouldn't look down on them or take pleasure in their misfortune.

Second, people tend to forget the realestate bubble forced people into spme very crazy choices where buying more than they needed made economic sense. In 2001 I got a raise and started looking to move up from my 1 bedroom rental off Columbia Pike. Two bedroom units rented for $1650 - $2100 per month. So I decided to buy and started looking at close in condos. Again 2 bedroom units inside the beltway were runing $225,000 to $250,000 (for the less desirable ones). So I researched commuting times, learned the slug system worked best in the I-95 corridor and started looking soouth to Springfield and ultimately Woodbridge. I ended up buying a new 4 level townhouse with 3 master bedrooms for $198,000. It was and is way more house than I need but mortgage (including escrow) is $1263, less than I would pay for rent on a one bedroom in Arlington today. The crazy thing is that for many people during the bubble it was easier to find, buy and finance a large house than a small one. So don't judge them till you know thier history. You might be in their shoes some day.

Posted by: Woodbridge Va | May 4, 2008 7:02 PM

Before you buy, you better know what foreclosures are doing in the immediate area!! A lot of buyers are getting killed because they never got advice like this--

This "Mr. Mortgage" guy is the bomb-

http://youtube.com/watch?v=1PDeMZYRjLQ

Posted by: Mayp | May 4, 2008 7:22 PM

Funny, the only people who have said anything about illegal immigrants are those who accuse others of jumping to the conclusion that these immigrants are here without papers. Fairlington Blade and Woodbridge, VA, did you two post your comments without reading the other comments? Did you just assume that others would raise that issue? Because the only ones who have raised it is you two. What's up with that?

As far as housing affordability, I can see people paying $800,000 for houses that now appraise for $525,000. Houses in my neighborhood sold for $400,000 just two years ago. Now they list for anywhere between $225,000 and $300,000. Prices were jumping $10-15,000 a month at one point. I live in a townhouse community where for a long while the average owner lived there for 7-8 years and then moved up. Now people who moved in 3 and 4 years ago are so seriously upside down on their mortgage that they won't be able to move for many more years--and that's just the people who can still afford the loan payments.

The bank industry is at fault here, as well as real estate agents who tried to sell people more house than they could afford. And of course, anyone entering into a mortgage should be carefully considering the consequences--but when the professionals are telling you that this is a good idea, it isn't surprising that so many people took the risk.

Posted by: Anonymous | May 4, 2008 9:39 PM

"Then why do both political parties pander to immigration lobbyists? Because they are dirt cheap labor. Limousine Liberals (Zoe Baird, Madonna, etc) and Country Club Republicans (New York and DC) LOVE minimum wage laborers. More bucks for the rich."

Yes, I read this comment that was posted 8 hours before my own. thought it was a hit at immigrants and responded. Sorry, maybe you read as some sort of compliment.

Posted by: Woodbridge Va | May 4, 2008 10:52 PM

no bid means the property's fair market value is less then the banks asking price. they should auction it off no reserve/absolute and let the market dictate the true price, otherwise inventories will continue to climb, neighborhoods will decay, more bank writedowns will occur, and the whole recession will just drag on longer and longer.

Posted by: Stanley | May 5, 2008 12:02 AM

I always wonder why people think they should have what they have not earned. This is the "American" way and seems fundamentally flawed. Speaking of fundamentals, most houses should be priced at 3X what a person's income is. Where the hell did people -get the NERVE- to go against fundamentals like THIS one? Only in America. Where we now have to 'bail out' the rich and the risky. If you think Americans who didn't succumb to this "DREAM" aren't angry about all of these thing...well think again.

Posted by: DreamIsJustADream | May 5, 2008 12:32 AM

"A lot of people seem to be jumping to some real negative conclusions.

First, noting [sic] in Marc's article indicated these people were here illegally."

Your first two sentences seem to indicate that you think others have assumed that the immigrants in these cases are undocumented. No one had made any such comments. Immigration lobbyists have as much or more to lobby congress regarding legal aliens (excessive wait for processing of documents, etc.) as they might for those here illegally. Anyway, I perceived that as a slam at immigration LOBBYISTS, as that is what the statement says.

So, I think you have jumped to a conclusion (that posters were making assumptions that the immigrants in these cases were illegal) that the facts do not warrant. And I am not sure where you get "a lot of people" from one commenter.

Posted by: Anonymous | May 5, 2008 1:55 AM

It's pathetic that way the WaPo tries to spin any- and everything to do with immigrants into a sob story.

Posted by: eh | May 5, 2008 5:11 AM

"Most of the families whose houses were sold on this day came here from Africa and Central America. ... These houses were their dreams. They were more committed to the idea of riding the American wealth elevator of real estate than to the ideals of democracy"
I don't know how this works in Africa or Central America, but in the US you actually have to make payments if you borrow money for a house. I am sure nobody told them about the down side of the American dream. Tough learning experience.

Posted by: Mike | May 5, 2008 7:04 AM

Unfortunate, but it is happening a lot.

Why is it that none of the previous posts mention what I feel is a major point Marc made?

28 families lost there homes. Times two for husband/wife (this isn't Texas, so the limit is one each) and only ONE of them is a registered voter.

Living the "American Dream" has some responsibilities attached to it, and voting is probably the most important responsibility of ALL citizens of this country.

The way I figure it; if you don't vote, you don't have a right to complain about how things are going.

Posted by: SoMD | May 5, 2008 9:36 AM

For those who live in Prince George's and may find themselves hurtling toward a foreclosure, here's a meeting you might want to check out:

Sponsored by the Prince George's Pro Bono Committee and a bunch of other legal aid groups, a Foreclosure Solutions Workshop will be offered at no charge, Saturday, May 10, from 10 a.m. to 2 p.m. at Unity Center of Light, 3501 Moylan Drive, Bowie, MD. For information, call 301 864 8353, ext. 10. Bring all paperwork related to your mortgage, loan and settlement, and lawyers can provide individual guidance to help you avoid foreclosure.

Posted by: Fisher | May 5, 2008 12:23 PM

What I'd like to understand 'cause I didn't get my MBA from Wharton, is why a bank wants to take back a house that is valued less than its mortgage rather than selling it for whatever they can get and lowering their writedown amount. I mean, it doesn't look like these things are going to turn around and over anytime soon. Even if they do it's not likely they'll get back to close to where they were soon. Or ever.

Posted by: Stick | May 5, 2008 2:08 PM

On this issue you have to talk frankly about the number of people that were just ignorant on the subject and got exploited. Real Estate and mortgages are too big of an issue to be naive in any way.

Also, the banks and mortgage brokers sold these loans like there were no standards. I make base salary, but I truly wonder how folks afford these $600-700K or more homes. the base principal and interest on some of these loans are $3000 or more.

Posted by: Stupidity or Fraud | May 5, 2008 3:55 PM

The recent congressional bill for $300 billions bail-out of distressed homeowners will not stop the rapid downturn of the residential real estate in the U.S. Because many of the home buyers in the last 5 years who used those fancy loans, i.e. no-down, interest only, ARM, Alt-A, etc., could only afford the 2% teaser rate and hope the ever increasing equaty can be taped to pay the higher mortgage in 2years. but those dreams were busted. Even if the Fed bail-out plan can provide a 6% fixed rate mortgage, these borrowers still can not afford it. They just simply walk away and move back to renting under the subsdized low-income housing programs. The foreclosure rate will keep on growing and the inventory of bank repossesed homes will result in much more bank write- downs. The $1.3 trillions loss of bad mortgage backed securities need a long time to be digested by the global markets. This long and painful correction will not end until 2013, the earliest.

Posted by: JC Inter | May 6, 2008 9:18 AM

Perhaps there were no bids because nobody wants to live in PG County. I fled in 1991. Now that we are in an energy crisis and the building of new nuclear plants are being considered, perhaps PG County would be a fine place to put three or four nukes.

Posted by: D Leaberry | May 8, 2008 1:15 PM

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