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Real estate investors are making a big splash at foreclosure auctions in California and across the country, the website ForeclosureRadar is reporting. The Golden State had the most third-party auction sales in the nation in January, with bidders purchasing 3,964 properties for $766.2 million.

Properties sold at auction are purchased for cash, with no title insurance or prior inspection allowed, usually by investors either adding to their rental holdings or, often, intending to quickly rehabilitate units and “flip” them for a profit.

There has been talk that another “wave” of high foreclosures is on the horizon, given a recent increase in delinquency filings. ForeclosureRadar’s founder and CEO Sean O’Toole disagrees, pointing to the increased investor appetite as a mechanism to keep many foreclosures from hitting the market.

“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” says O’Toole.

In San Diego County, while Notice of Default filings which signal the beginning of the foreclosure process are up 12 percent from December with 1,495 properties entering foreclosure last month, the numbers still represent a decrease in foreclosure starts from a year ago. Further, with 1,696 Notices of Trustee Sale signaling the completion of a foreclosure filed locally during the same period, 2012 is starting off with fewer overall properties in default.

Of properties that do end up going to auction, 515 ended up with ownership reverting to the foreclosing bank last month, a 41 percent decrease from January 2011. Investors bought 318 properties, up 19 percent from the 267 they bought in the same month last year.

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Comments

SurfPuppy619 Feb. 16, 2012 @ 10:16 a.m.

The ONLY thing that will stop the foreclosure mess will be a creation of JOBS. JOBS, jobs~! Nothing else is going to stop homes from going back to the bank.

Job creation is still 2, 3 maybe 5 years away IMO.

The foreclosures will keep coming and nothing is going to stop it for the next few years, I don't care what any website or real estate agent/broker says. It is simple economics.

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Dave Rice Feb. 16, 2012 @ 7:56 p.m.

Well, it appears that what's happening to stop homes from going back to the bank is that they're now cheap enough for investors to snap up and rent out for a good return on their investment.

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SurfPuppy619 Feb. 16, 2012 @ 10:01 p.m.

If the price of homes keep dropping, and I think it will, then rents will drop too.

It is a risk to buy in a downward trending market. Rents go down too.

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Dave Rice Feb. 17, 2012 @ 11:56 a.m.

Actually, rents are rising - foreclosed former homeowners are being added to the pool of potential renters faster than rental property is coming online and are competing with other renters for a diminishing supply of rental housing.

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SurfPuppy619 Feb. 17, 2012 @ 1:37 p.m.

Remember, what goes up must come down. Just b/c rents may be rising today does not mean it will continue....

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Twister Feb. 17, 2012 @ 2:30 p.m.

Prostitution, pimping, and other forms of parasitism can pay off big, but once the supply of suckers is exhausted, they must turn on each other. Hahahahahahaha (maniacal laughter) . . . [Apologies to Nan]

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