They are conducting Trustees Sale at NON PUBLIC venues.
This is illegal and anyone who buys there could be in for some serious legal costs when attorneys start going after the buyer and auction.com
They are also misrepresenting the properties and gathering Social
Security Numbers from buyers
BE VERY, VERY CAREFUL.
I wouldn’t be shocked if Stone Point Capital the private equity firm that owns Auction.com is using it as a vehicle to sell mortgages they bought elsewhere.
There is a reason they operate their trustee sales so differently. They collect large amounts of personal information from you at registration. The guys wearing tuxedos count your cash at the door and enter the amount into a computer. Auction.com staff won’t let you into the auction room unless you show them your cash.
I don’t like telling my competitors how much cash I have. I prefer to show enough cash to cover my bids on a specific property as I step up to make my initial bid. I thought I could hide how much cash I brought by showing them enough to cover the opening bid on the cheapest property. But guess what? They won’t let you inside the auction room unless you can show you have enough cash to beat the banks initial bid. Not the opening bid they show online, but the banks initial bid. Auction.com like to keep the banks initial bid hidden with their false low opening bids.
I guess we have to compete against our fellow bidders and Stone Point Capital now. I wish I had access to personal information and cash capacity of all my fellow bidders!!
Some tidbits on Stone Point Capital:
In November 2008, Stone Point Capital a private equity firm bought a 50% interest in Auction.com, LLC. http://www.stonepoint.com/investments-real-estate.php and http://www.auction.com/company-information/partners.php
In March 2009, Stone Point Capital invested in OneWest Bank along with other hedge funds and PE firms to acquire IndyMac from the FDIC. IndyMac held an enormous amount of mortgage-backed securities when it failed in 2008. It is reported to be the fourth largest bank failure in US history.
There are a lot of visitors at the Auction.com ballroom auctions. You can walk right in and sit down without registering. I don’t know any requirement to register with funds in order to enter the sale.
Otherwise, they cannot pass the ‘public’ auction requirement. It would be a private ‘registration’ only auction if you were forced to show money and register.
I do not trust Auction.com. The tactics that they use are possibly fraudulent business practices in my opinion
I will not buy at one of their sales: Attorneys are going to SUE
them and You if you buy from them… mark my words!
Buyer Beware!
Hilton,
You need to be specific on what you believe are the fraudulent business practices.
Is it related to requiring the registration? and showing funds? Qualifying funds and registering do not violate the code, and some trustees have always had slightly different variations on how they require payment and qualifications.
In the “old” days when there were fewer than 10 people attending sales, it was not unusual for lawyers and even TD Service (which used to handle lots of sales) held them in their offices. Any location that’s open to the public is “public”. Much better than holding sales outdoors on “the steps”. Wind, rain, noise. Makes no sense to me.
I think there are two diff. discussions going on. One is: Can anyone attend the public Trustee’s sale - even if you are not going to bid? The answer seems to be yes. So - no problem. You might want to be there just to observe, hear a postponement, or serve a TRO? The other is: They don’t seen to be following the rules of the game when it comes to postponements. A properly documented fcl. file would need to coontain an affadavit of postponement for each time the sale was postponed.
Yes, I am more concerned about their lack of organization and/or audit trail on their postponements, cancellations, etc. They seem to be overwhelmed with the tracking of postponements and/or there is some miscommunication between their organization and their trustee clients, since there is different information on Auction.com website and Recontrust website for the same properties.
Just last week there was another confusing problem. Some of the Auction.com properties suddenly showed up on the Recontrust website with a completely different future location/time. These properties just dropped off the Auction.com website. When I called into their phone line, they explained that all 3 properties had been ‘cancelled’. But Recontrust shows them going to sale at the regular courthouse location in about 2 weeks and I don’t see any new Notice of Sale recorded. I pulled the original Notice of Sale docs and they clearly state the Auction.com location.
Yikes!!! what a mess. Of course Auction.com doesn’t really care what happened to these properties, although they don’t actually show up as ‘cancelled’ on their site.
Could it be that Recontrust is moving properties out of Auction.com back to the courthouse?
“Could it be that Recontrust is moving properties out of Auction.com back to the courthouse?”
Wouldn’t be surprised. I don’t think a.com is equipped to handle Trustee’s sales in the normal fashion - especially where most sales are postponed.
BTW, there is no legal reason to announce a cancellation. If the sale is canceled - there is no reason for anyone to even show up and say it was canceled.
The traditional trustee sale publishing and posting tell me the bulk of their business comes from the property postings not conducting the auctions. I’m curious if Auction.com has the same business model or if they receive commission on getting higher bids like they boast. If the latter, renting ballrooms would squeeze their margins when most of the sales postpone.
Good question… does Auction.com have staff that drive around and do the legal postings and publishing? That would be a new part of their business since they did not have to do that for their previous REDC auctions of properties that were already foreclosed.
By way of introduction, I will mention that I am a California licensed attorney. However, I am not your attorney. These comments are my own observations, and are not intended as legal advice.
I should also mention that, prior to going to law school, I was a trustee’s sale auctioneer for over six years, first with Trustee’s Assistance Corporation (T.D. Service Company), and later with Agency Sales and Posting.
The issues raised in Richard’s 10/15 comment, GJ’s 10/26 comment, and the general sentiment of Hilton’s comments are legitimate.
Read Civil Code 2924h, subsections (a) and (g) very carefully.
2924h(a): Based on the descriptions in this thread, it seems to me that no next higher bid on behalf of the beneficiary is occurring to cancel the prior bid. ALL bids must be announced clearly and conspicuously, even bids on behalf of the foreclosing bene. For example, whenever I had an instruction to open at a low bid and then bid up, whether it was for the foreclosing bene or for a junior bene client who had provided funds and bidding instructions, as the auctioneer I had to clearly announce who I was bidding for and how much. If these auctioneers are not doing this, then in my opinion they are not following the statutory requirements for a Trustee’s Sale auction - the rules are different from the rules that govern other auctions.
2924h(g): It seems to me that the conduct of these auctions violates the rule against fixing or restraining bidding. The language is very broad - “any” means ANY.
But the most important thing the guys at auction.com / Stone Point Capital seemed to have forgotten is this: in California, all Trustee’s Sales MUST be conducted “with all fairness, regularity, and scrupulous integrity.” I can easily imagine a scenario where a reviewing court would find the auction.com model violates the Civil Code, and then ALL of their so-called Trustee’s Sales could be at risk of being undone.
I appreciate the experience and perspective. Shortly after I made the comments in this thread, I sent an email to the BAC fraud department making the point as best as I could about last and highest bidder. I never heard from them, but the next Auction.Com trustee sale held here was very different. They made it a lot clearer when they were finally bidding for the bene. Not as clear as the criers at the steps, but better.
Thank you so much for that clarification. They definitely were NOT crying the final beneficiary bid, nor revealing that they were bidding on behalf of the beneficiary. They were holding ‘secret’ reserve amounts. At the end of a long series of open bidding they would just bang the gavel and announce ‘Back to the Beneficiary’ (in a low tone) and you could never figure out what just happened.
It will be interesting to see if they pre-announce that they will be bidding on behalf of a beneficiary, pre-announce their high bid (I really doubt it) and clearly state the beneficiary bid at the end of the sale on a particular property.
I have seen two different methods from different auctioneers at the courthouse steps. But, they ALWAYS state they are bidding on behalf of the beneficiary before the bidding starts. Then they either 1) start going up by a pre-determined amount per instructions such as $1,000 a step or 2) state the high bid before anyone even starts. I like method #2 the best because it doesn’t waste anyone’s time if the high bid is more than we were all going to bid. Most of the time the bidders will just do a penny over opening bid to force the beneficiary to ‘win’ the auction with their high bid (rather than winning with the opening bid).
Actually auction.com has been selling in Northern Calif both at locations on online for some time (including trustee sales). The starting bids are low to get you to bid . They have reserves on all the properties and the actual sale prices are pretty close to what they list on their site as “value of asset”. I can tell you, they do have some good deals, but be sure to do a zillow.com type of search to get an estimated value before you buy, becasue many of the properties are actually not worth what they are selling for anymore. In fact this is true on Trustee Sales at the court house steps, as well.
I attended my first auction.com sale a couple weeks ago in Okld. Mainly just regulars. Several went to bidders. Altho diff., didn’t see any irregularities. Main diff. is you don’t know the opening bid of any of the sales. You have to keep bidding to find out.
Hi Richard, I am interested in buying a home from auction but dont know how to do the “due diligence” and check if there are other liens etc… Is this something you help your clients with? If so please email me at rozsroom@sbcglobal.net Thanks.