Foreclosure Auctioneer's Lonely Task

It is fitting that Crossley's circuit begins in Prince William. A survey by George Mason University's Center for Regional Analysis found that the county had 288 foreclosures per 10,000 housing units in December, the highest rate in the region. The county's land records office recorded 3,344 foreclosures in 2007 after tallying only 282 in 2006 and 52 in 2005.

This year, banks have taken possession of more Prince William houses. According to RealtyTrac, which sells foreclosure data to online subscribers, Prince William has 2,704 bank-owned properties on the market. Fairfax County has 1,852, despite having about three times as many homes as Prince William.

As prices have fallen over the past few months and the number of foreclosed properties has increased, Crossley has seen the ranks of bidders dwindle and then disappear. The small-scale investors who used to show up for auctions -- the "regulars" -- stopped coming months ago. "They say they're already carrying too many properties," Crossley said.

Crossley has been called the Grim Reaper by passersby and hecklers, but the sobriquet doesn't fit. In his typical auctioneer outfit -- running shoes and jeans -- the 55-year-old Arizona native looks more like a soccer dad than an undertaker.

"There's this image from 'It's a Wonderful Life' of the evil banker who wants to take your house," he said. "Banks don't want your house; they want your money. They want to work with you so you can keep your house. With the market like it is, lenders don't want to foreclose on you."

With no buyers, Crossley probably could cut corners or stay in the car. But he calls the auctions anyway, as the law mandates, drawing all manner of odd looks and stares. "It's weird," he said. "You never really get used to talking to yourself out there in public."

State law also requires that lenders give notice of foreclosure auctions in newspaper ads before reclaiming a property. They determine the auction's opening bid based on the amount they're owed. If no one steps forward with a higher offer, they assume ownership.

This explains one reason the auctions are so ill-attended: They no longer offer a reliably good deal. Banks typically set the opening bid at the amount they're owed, even though property values have plunged in some areas. For instance, a house in Manassas Park bought for $400,000 in 2006 might be worth $250,000 now, so an opening bid that doesn't reflect the reality of the market isn't likely to attract much interest.

"Banks bid what they're owed," said Bill Evans, a real estate lawyer in Manassas, "but once they become the owner, they'll sell it for less." This is because of legal requirements, obligations to other investors and other concerns that make it easier for lenders to cut their losses after the auction, he said.

Once they take over the property, he said, they'll "find a Realtor to get it moving."

But keeping tabs on auction notices can still be a path to a huge score. "Every once in a while, you see something good out there," said Lou Coletta, a small-scale investor who regularly checks the Nectar Projects Web site, and others, looking for bargains. "It's crazy. You can get a townhouse for $180,000 or a single-family in a decent neighborhood for $230,000."

Crossley and others in the real estate business said many borrowers are losing their homes because they are too confused or frightened to negotiate with banks to lower their monthly payments or refinance. Others have little equity built up, especially if they bought the house in recent years, and choose to walk away rather than be saddled with a devalued investment.