A number of Miami home foreclosures purchased by newbies through the newly launched foreclosure auction website of Miami-Dade County were defective or misrepresented, based on complaints from buyers who are just beginning to invest in foreclosures.
Some of the purchased properties had liens; others have huge mortgage loans, and a number of the properties have not been properly foreclosed. The newbies that bought these properties were so excited they thought they found a gold mine, but instead, they lost thousands of dollars of their hard-earned money.
According to veteran foreclosure investor Alain Lantigua, the newly launched Miami online foreclosure auction is beneficial to him, but to newbies, the foreclosure website can be a trap. He added that the foreclosure business is complicated and that buyers need to research the properties to be auctioned before bidding on them. He said he investigates around 1,000 foreclosures listing properties a month before buying one or two properties.
According to Harvey Ruvin, clerk of courts of Miami-Dade County, the foreclosure auction website has sold over 1,500 Miami home foreclosures since it launched in January, and he expects sales to continue to increase in the coming weeks to ultimately move over 100,000 foreclosure cases in the county.
Ruvin also said that the initial results have been successful and that the complaints against the site were from bidders who did not read the instructions and disclaimers well. He explained that the website contains clear disclaimers about titles and encumbrances.
Fort Lauderdale businessman Sehan Thompson was among newbies who lost money in the auction website. He bid $9,100 for a condo appraised at $140,000 and when his bid was accepted, he was ecstatic. Later, he found out that he actually bid on a $9,000 condominium lien and not on the condo unit.
New York City investor Samuel Sontag lost much more than Thompson. He bid $95,600 for a one-bedroom Miami Beach condo unit with a $13,000 condo association lien. After wiring the money, somebody called to inform him that the condo unit he bought had a $265,000 mortgage with IndyMac Federal Bank.
Home foreclosures in Florida have risen to record levels, prompting Florida counties to resort to online auctions to solve their backlog of foreclosure cases. Prospective bidders, however, need to research on these properties and read thoroughly disclaimers to avoid the losses suffered by the newbies that immediately plunged into bidding for Miami home foreclosures without learning about foreclosures and the online bidding process.