Auctions of homes in default resume in Bexar
Bad news for some homeowners who have fallen far behind on their mortgage payments: Foreclosure sales resumed in Bexar County Tuesday morning after a year-long pause due to the coronavirus pandemic.
Starting promptly at 10 a.m., the mortgage and tax foreclosures auctions attracted at least 200 people to the southwest lawn of the Bexar County Courthouse. Many of the bidders hungered for what they’d been denied for the past 12 months — sweet deals on distressed properties.
Attorney Rob Valdespino was among the first trustees to kick off sales, auctioning seven properties.
“A little rusty, but all went well,” he said after the auctions. “It’s like riding a bike.”
The last time Valdespino conducted foreclosures sales was in March 2020, just before the pandemic swept the country. It’s been a long year for him.
“It’s been frustrating, because this a big source of income for us,” said Valdespino, who was assisted by his wife, lawyer Brenda Rolon. “We do the foreclosures, followed by the evictions, to get the houses empty so they can be put back on the market.”
Foreclosures sales had been in a holding pattern since April of last year after Bexar County Judge Nelson Wolff issued an executive order temporarily suspending foreclosure sales for 30 days. He issued subsequent orders that kept the sus
pension in place.
Wolff, though, has said his order only covered property tax foreclosure sales — not mortgage foreclosures. A tax foreclosure is the forced sale of real estate for nonpayment of taxes.
Given that Wolff’s order wasn’t clear, Valdespino had said he wouldn’t risk jail time or a fine by conducting his mortgage-foreclosure sales. Anyone who violated the order could have faced up to 180 days in jail or a fine of as much as $1,000.
Valdespino also was concerned that if he proceeded with an auction, an owner losing the property could challenge the sale on the grounds that it wasn’t a competitive bid because investors had the impression the sale had been canceled.
Nevertheless, a handful of mortgage foreclosure sales were carried out earlier this year and last year, according to property records.
Wolff’s latest order, issued last month, no longer mentioned that the foreclosures sales were canceled — a sign to many that the sales could resume.
On Tuesday morning, spirited bidding broke out between two investors on a Northwest Side single-family home that Valdespino auctioned.
Bidding started at $106,458.15 and climbed to $146,000, with investor Kenny Rafati outlasting the other bidder. Even with the nearly $40,000 increase from where the bidding started, Rafait may have gotten a good deal. The Bexar Appraisal District assessed the house at almost $182,000.
“It’s feel good to be back,” Rafati said. “It’s been tough.”
Rafati’s livelihood is buying and flipping properties. The pause on foreclosure sales has put a crimp in his business. He’s been living off his savings for the last year, but he’s ready to start buying foreclosed properties again.
“It’s been a hot market,” he said. “It’s a sellers’ market.”
County records show 187 properties were posted for Tuesday’s foreclosure sale because of missed mortgage payments, while 20 tax-delinquent properties were posted for sale.
The tax foreclosures held Tuesday were for “nonhomestead
properties,” Bexar County Tax Assessorcollector Albert Uresti said. In other words, they didn’t include someone’s home. The sales were for two structures that have been boarded up and 18 vacant lots.
Investors bought 16 properties. No one bid on the other four.
The number of mortgage foreclosures would have been much higher if not for a moratorium on foreclosures for federally-backed mortgages.
Fannie Mae and Freddie Mac, which buy loans from lenders and either hold them in their portfolios or package them into mortgage-backed securities, have suspended mortgage foreclosures until June 30. If the moratorium isn’t extended, Valdespino and Rolon expect to see a big jump in foreclosures sales starting in August.
Not all of the properties posted for the mortgage foreclosure actually sold. Some sales were stopped by property owners filing for bankruptcy in recent days.
Others sued to stop a sale.
In a lawsuit filed Monday, an Alamo Heights homeowner sued a lender accusing it of violating the Coronavirus Aid, Relief, and Economic Security, or CARES, Act, which prohibits mortgage foreclosures on federally backed loans.
The homeowner’s attorney in January had sent a “written forbearance request” to the Pittsburgh lender, citing an “economic hardship due to COVID-19.” The attorney asked the lender to cancel Tuesday’s foreclosure sale and grant a six-month forbearance.
Neither the lender nor the loan servicer responded to the letter, prompting the lawsuit, the complaint says.