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Foreclosures up in county
A small group of about a dozen people clustered together outside the main entrance to the county courthouse in Berryville Monday morning, taking temporary shelter from the light, intermittent rain showers.
They waited patiently and quietly as Fairfax attorney William Casterline Jr. consulted with a representative of Wachovia Bank, who had traveled all the way from Charlotte, N.C., for that morning’s proceeding. Casterline was there to serve as a substitute trustee responsible for auctioning a property due to foreclosure.
Then the moment arrived.
“Do I have an opening bid?” Casterline asked, after describing the property for sale ?a total of 230 acres situated at the end of Wildcat Hollow Road (Route 602) near U.S. 50 in the county’s southeastern section. The property first was offered as two separate parcels of nearly 92.7 acres and 132.5 acres, respectively, and then in bulk as one parcel.
The bidding took only a few minutes. When it was over, Alexandria attorney James D. Turner was the winner, offering $338,504 for the entire tract -- one dollar more than the lender’s representative’s bid.
The auction was a scene that is being played out more and more in the county, throughout the region and in the nation as lenders foreclose on property owners who cannot keep up with their mortgage payments.
When a borrower takes out a loan to buy a residential or commercial property, the property is conveyed in trust to trustees, who hold title to it. Because a property is collateral for the loan, when a borrower stops making payments, a lender can appoint substitute trustees, if the original ones are no longer available, to carry out the foreclosure proceedings and obtain the best possible value for the property
According to data provided by Clarke County Assessor Donna Peake, there were nine foreclosures in the county in March, compared to four in January and February. There were 16 foreclosures in 2007, and through March of that year, only three had taken place, according to the data.
Peake said that people interested in buying at auction have been contacting her to ask about the assessment, condition and location of properties.
And more auctions are to come.
On April 30, a property on Greenway Avenue in Boyce is scheduled to be auctioned at 9 a.m. And on May 6, one on approximately 1.1 acres on Crum’s Church Road near Berryville is scheduled for 10:30 a.m. The auctions will take place at the county courthouse.
Turner said he plans to use the Wildcat Hollow Road property for recreation.
“I like hunting and my brother wants me to find a place where he can go up there and maybe put a pond in or something,” Turner added.
Noting that he has friends who serve as substitute trustees, Turner shared his view of the current real estate market, which has experienced an upswing in foreclosures in recent months.
“I think by the end of the year it will be calming down a lot,” Turner said. “The crazy sub-prime loans, [and] the adjustable loans are starting to come to a head and it’s filtering out.”
This is the direct result of people ... [who] buy on speculation and it’s getting back a little bit more to reality.”
Casterline, who said he has been conducting foreclosure auctions for 25 years, agreed.
Calling it “a form of market correction,” Casterline said, “We’re seeing residential builders from here all the way down to Stafford [County] not being able to keep their projects going and having foreclosures.”
Casterline attributed that to a variety of factors. “Prices just probably got too high, development got too fast, maybe,” he said.
Most of the residential foreclosures, he observed, are loans less than four or five years old.
“They all came in with adjustable rates; a lot of them came in on houses at the peak of the valuation and those values have now collapsed,” Casterline said. “And not only that, but many were 90, 95 percent, 100 percent loans.”
When the value is gone, Casterline said, people just walk away from the house. “We’re not seeing many foreclosures of older loans; it’s all these more recent ones,” he said.
Casterline predicted a drop in sales once the correction has settled out.
According to information supplied to Peake by the Clerk of the Circuit Court, 129 property transfers were recorded through March, compared with 111 during the first quarter of last year. And a total of 542 were recorded in 2007.
The bank’s representative, who did not want to be named, declined to comment on the auction. The former owner, a builder, was not present.
Contact the reporter at rmarlow@timespaperscom
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