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Bad news for some homeowners who have fallen significantly behind on their mortgage payments: Foreclosure sales resumed in Bexar County on Tuesday morning after a year-long hiatus due to the coronavirus pandemic.
Beginning quickly at 10 a.m., the mortgage and tax foreclosure auctions drew at least 200 people to the southwest lawn of the Bexar County Courthouse. Many bidders were hungry for what they had been denied over the past 12 months – good deals on distressed properties.
Lawyer Rob Valdespino was among the first trustees to launch the sales, auctioning seven properties.
“A little rusty, but everything went well,” he said after the auction. “It’s like riding a bicycle.
The last time Valdespino made foreclosure sales was in March 2020, just before the pandemic swept across the country. It has been a long year for him.
“It was frustrating because it’s a great source of income for us,” said Valdespino, who was assisted by his wife, lawyer Brenda Rolon. “We do foreclosures and then evictions to empty houses so they can be put back on the market. “
Sales of foreclosures have been on hold since April last year after Bexar County Judge Nelson Wolff issued an executive order temporarily suspending sales of foreclosures for 30 days. He issued subsequent orders which kept the suspension in place.
Alternate trustee Rob Valdespino, in black suit, and his wife Brenda Rolon, to his left, are conducting a mortgage foreclosure sale on the grounds of the Bexar County courthouse on Tuesday.
Patrick Danner / Staff
Wolff, however, said his order only covered sales of foreclosures – not mortgage foreclosures. A tax foreclosure is the forced sale of real estate for non-payment of taxes.
Since Wolff’s order was unclear, Valdespino had said he would not risk jail time or a fine by making his mortgage foreclosure sales. Anyone found to violate the order could face up to 180 days in prison or a fine of up to $ 1,000.
Valdespino was also concerned that if he proceeded to an auction, an owner losing the property could challenge the sale on the grounds that it was not a competitive bid because investors felt the sale had been canceled.
Nonetheless, a handful of mortgage foreclosure sales were made earlier this year and last year, according to property records.
Wolff’s latest order, issued last month, no longer mentioned that foreclosure sales had been canceled – a sign for many that sales may resume.
On Tuesday morning, a heated auction erupted between two investors on a single-family home on the northwest side that Valdespino auctioned off.
Bidding started at $ 106,458.15 and climbed to $ 146,000 with investor Kenny Rafati outlawing the other bidder. Even with the increase of almost $ 40,000 from the start of the auction, Rafait may have gotten a good deal. The Bexar appraisal district valued the house at almost $ 182,000.
“It’s good to be back,” Rafati said. “It was tough.”
Rafati’s livelihood is buying and flipping properties. The break in foreclosure sales put a damper on his business. He’s been living off his savings for a year, but he’s ready to start buying foreclosed properties again.
“It has been a hot market,” he said. “It’s a sellers market.
County records show 187 properties were posted for Tuesday’s foreclosure sale due to missed mortgage payments, while 20 tax-overdue properties were put up for sale.
The tax foreclosures made on Tuesday were of “non-family properties,” said Albert Uresti, Bexar County tax assessor Albert Uresti. In other words, they did not include someone’s home. The sales focused on two barricaded structures and 18 vacant lots.
Investors bought 16 properties. No one is bidding on the other four.
The number of mortgage foreclosures would have been much higher if there had not been a moratorium on foreclosures for federally guaranteed mortgages.
Fannie Mae and Freddie Mac, who buy loans from lenders and hold them in their portfolios or pool them in mortgage-backed securities, have suspended mortgage foreclosures until June 30. If the moratorium is not extended, Valdespino and Rolon expect to see a big jump in foreclosure sales from August.
Not all of the properties posted for mortgage foreclosure actually sold. Some sales have been interrupted by owners who have filed for bankruptcy in recent days.
Others sued to stop a sale.
In a lawsuit filed Monday, an Alamo Heights owner sued a lender accusing him of violating the Coronavirus Aid, Relief and Economic Security Act, or CARES, which prohibits mortgage foreclosures on loans guaranteed by the federal government.
In January, the owner’s lawyer sent a “written forbearance request” to the Pittsburgh lender, citing “economic hardship due to COVID-19.” The lawyer asked the lender to reverse Tuesday’s foreclosure sale and grant a six-month forbearance.
Neither the lender nor the loan officer responded to the letter, leading to legal action, according to the complaint.
