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Condo Auctions May Have Reached Peak

MIAMI-Bankers are becoming more adept at short sales and loan modifications.

By Carl Cronan | Updated on June 15, 2009

(Carl Cronan is editor of Real Estate Florida.)

MIAMI-The number of residential condominium units being sold through foreclosure auctions in Miami-Dade County appears to be peaking in the second quarter, according to locally based CondoReports.com. But whether that peak holds depends on lenders’ willingness to participate in short sales and loan modifications before going the last-resort auction route.

Nearly 6,000 units in major condo projects were sold at auction over a two-year period through the first quarter of 2009, according to Adam Cappel, president of CondoReports.com. The number climbed steadily from 316 units in the second quarter of 2007 to more than 1,000 units in the second quarter of 2008, but has fallen back since last year’s fourth quarter.

“Banks haven’t been pushing the foreclosure process,” Cappel tells GlobeSt.com. “Lenders have become much more adept at short sales. They don’t want the liability and carrying costs of holding this stuff.”

One potential wild card in the drop in foreclosures could be the foreclosure moratorium put in place by Fannie Mae and Freddie Mac in late 2008. Cappel points out that while the moratorium didn’t stop lenders from filing early stage foreclosure proceedings, it did curtail the number of auctions taking place.

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