The clock was ticking Thursday afternoon on an online auction for a Johnstown property that was up for bid for at least the third time.
With only hours left, bids on the property hadn't yet met the reserve and amounted to a mere $12,500 on www.auction.com for a property that was once valued at more than $50,000.
The two-story 1,276 square-foot home at 100 Washington St. was first built around the turn of the century, but its former owners faced foreclosure on the property after they defaulted on a Fannie Mae mortgage about a year ago.
The Leader-Herald/Amanda Whistle
A foreclosed property for sale is shown Thursday morning on Washington Street in Johnstown. The property has been listed for auction at least three times.
The Leader-Herald/Amanda Whistle
A foreclosed property for sale is shown Thursday morning on Montgomery Street in Gloversville. The property is listed on A1-R.E.O.’s website, www.a-1reo.com.
Johnstown resident Sharon Brasure said Thursday she has been scoping out the Washington Street property for months - not to flip it or rent it - but to live in it.
"You fix it up little by little," Brasure said, adding that she's been bargain hunting for other foreclosed properties.
Working with foreclosed properties can be strenuous, Virginia Mackey, the real estate agent for the property, said Thursday as they can take a while to close.
But Fulton and Montgomery counties are not grappling with foreclosure rates as high as the rest of the nation, or even the state, Mackey said.
According to data from www.realtytrac.com, a website that tracks real estate trends, Fulton Cou nty's foreclosure rate this year is 0.02 percent, where the state's is 0.06 percent and the national rate is 0.24 percent. Similarly, Montgomery County's rate is 0.03 percent.
New York state also doesn't rank among the top 10 states with the largest percentages of savings for buying a foreclosed property. Michigan, Kentucky and Ohio top the list for best states to flip properties, according to the website.
Mackey said the region avoided the housing bubble for the most part as real estate prices remained steady throughout the period.
"Our market has been pretty stable where others have not," Mackey said. "We did have some problems when the banks were giving financing to people who shouldn't have been financed, but the banks really aren't doing that anymore. It's pretty difficult to get a loan now."
Mackey said many properties are "short sale" opportunities now.
"For the first time in my career I've been offered to handle a short sale, where they do it all through an R.E.O. company. They offer the person to move and sign an agreement that they will allow a short sale and the bank may forgive the difference," Mackey said.
An R.E.O. stands for real estate owned. R.E.O properties go back to the mortgage company after unsuccessful foreclosure auctions.
Mackey said she's handling two foreclosed residential properties right now. She began listing the properties on www.auction.com, a trend many realtors are turning toward, said Joyce Royal, of Joyce Royal Real Estate.
Royal also is the president of the Board of Directors for the Crossroads Incubator Corp., which is the Fulton County Economic Development Corp.'s real estate subsidiary.
"That seems to be a new trend, where if you want to buy the house, you can actually go online and bid on it, almost like e-Bay," she said.
Royal also noted many banks are offering short sale or "cash for keys" deals to avoid adding to the homeless population.
She said often if a tenant is renting a property that has been foreclosed without them knowing, banks may offer cash in exchange for their swift move to a new apartment. She said often that cash amounts to two or three months rent.
Local banks like Patriot Federal Bank, which opened in 2005, haven't had to foreclose on any properties within the last year because they avoided risky lending.
Vice President of Consumer Lending at Patriot Bank Hans W. Drews said the bank's foreclosure rate for both this year and the past year is zero.
"We have avoided offering mortgages that often tend to lead to trouble, such as adjustable rate mortgages with deeply discounted initial payments or stated income mortgages with little or no documentation of the borrowers' ability to repay the loan," Drews wrote in an e-mail to The Leader-Herald. "Based on our extremely low level of delinquency, we have not had a need to develop any special programs as of yet to deal with situations where borrowers or tenants would be put out of their homes."
He said the bank has seen a few cases of delinquent loan payments in its approximately 400 mortgages on the books, but in those situations the bank has offered interest-only payments for a set period of time.
He said examples of those cases involve people who have recently suffered job losses that slash their household income or other temporary situations like the need to go back to college for a short period of time.
"In a case such as this, the reduced interest only payment during the time when the borrower is attending college is helpful to them and they can resume reduction of the principal upon returning to employment. Fortunately, as a small bank, we are generally able to provide very personal service to our customers and work closely with them to identify situations like this before the delinquency becomes so problematic that a foreclosure is difficult to avoid," Drews said in the e-mail.
According to www.realtytrac.com, the foreclosures in R.E.O in Fulton County remained steady this year and then rose slightly in May and June. In Montgomery County, the REO properties dipped in March, but have been rising slightly since April.
Haroff Auction & Realty, Inc. runs the tax foreclosure auctions for both counties and that company holds an online auction on properties as well.
Ed Haroff, president of Haroff Auction said earlier in the year he hasn't seen an increase in tax foreclosures, but he noted that a significant increase in those might be in the future as municipalities don't foreclose on properties unless taxes are two or three years delinquent.
Amanda Whistle can be reached at firstname.lastname@example.org.