Hanky Panky On Courthouse Steps Alleged At Phoenix Foreclosure Sales As Last-Minute Price Drops In Opening Bids Become More Common

In Phoenix, Arizona, The Arizona Republic reports:

• When foreclosure homes come up for public auction in Phoenix, a minimum opening bid is set and bidding is open to anyone. At least that is the way it's supposed to work. But a Republic investigation into the daily public auctions held on the Maricopa County Courthouse steps and at some local law offices suggests a growing number of homes are sold for less than the posted opening bid.

• Prices on some foreclosure homes are being dropped below the opening bid just hours or even minutes before the auction. Buyers aware of the "drop bids" scoop up the houses before other bidders know about the price drops. Drop bids violate the state's foreclosure sale laws, say the state's leading court-appointed foreclosure-trustee attorneys.

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• Why lenders would drop prices at the last minute, instead of posting a lower opening bid the day before as required by law, is unclear. Drop bids compromise what was intended to be a fair and transparent way for lenders to foreclose on homes and liquidate them, as well as a way for people to obtain homes at sometimes bargain prices. The practice of drop bids hurts a number of parties [...]

For more, see Illegal housing bidding on rise (Many flouting law at foreclosure auctions).