HUD to hold auction 97 homes in region up for sale Friday at Omni Inner Harbor

'Aggressive' selling sought

Foreclosure inventory rises, creating need to unload properties

August 11, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Bolstered by three successful property auctions in little over a year, the state's Housing and Urban Development office will give buyers a chance Friday to bid on 97 Baltimore-area homes.

The federal agency hopes to sell the condominiums, townhouses and detached residences in a couple of hours during the mass sale at the Omni Inner Harbor Hotel.

At the last area auction in June, 100 of 114 homes on the block were sold, with buyers snatching up homes at the rate of one every 90 seconds.

That convinced Baltimore HUD officials they'd found what they'd been looking for -- a more aggressive, efficient way to clear hard-to-sell properties from their inventory.

Following the lead of larger HUD offices around the nation, the Baltimore office expects to rely on auction sales as a regular marketing tool. The office represents all of Maryland except Montgomery and Prince George's counties.

HUD typically assumes ownership of properties with mortgages insured by the Federal Housing Administration when borrowers can't make payments and lenders foreclose. HUD then pays off the balance of the mortgage and tries to sell the home, usually listing it for sale with a real estate broker.

The Baltimore office first sold "HUD homes" at auction in June 1995, then last November.

"We had a growing inventory and were seeing an increase in the numbers of foreclosures and getting properties back," said Candace S. Simms, director of the Single Family Housing Division for HUD's Maryland office. "We were understaffed in sales and needed a more aggressive method of selling properties in the inventory."

As with the last three sales, the current batch of homes will be sold by Larry Latham Auctioneers, an Arizona company that HUD contracts with to handle auctions nationally.

Officials from HUD and the auction company met with brokers and prospective buyers last week to familiarize them with the auction process and the properties.

Because buyers must be represented by real estate brokers, HUD asks potential bidders to contact a local real estate company and be shown the property ahead of time. All homes are sold "as is."

To register to bid, buyers must bring a letter from a lender showing they qualify for a specific mortgage amount or pre-qualify with one of the lenders available the night of the auction.

Most homes for sale Friday are in Baltimore, with others in Annapolis, Berlin, Centreville, Columbia, Crofton, Denton, Dundalk, Edgewood, Foxridge, Glen Burnie, Hagerstown, Hamp- stead, Keedysville, Laurel, Lochearn, Lusby, Millington, Mount Airy, Pasadena, Salisbury and Waldorf.

Registration starts at 4: 30 p.m., and the auction begins at 6: 30 p.m. at the hotel, at 101 W. Fayette St.

A second auction, of 115 homes in the Washington metropolitan area, is scheduled for 8: 30 a.m. registration and 10: 30 a.m. sale Saturday at the Omni Shoreham Hotel, 2500 Calvert St. N.W. in Washington.

The homes typically have been listed for sale at least several months but have not sold because of market or property conditions, Simms said.

At previous auctions, homes have sold at an average of 90 percent of the list price, according to Simms.

Some buyers may qualify for a 203(k) loan, which allows a borrower to get one mortgage to finance both the purchase and rehabilitation of the property.

Pub Date: 8/11/96

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