Room 1.B.6. in Denver’s Wellington E. Webb Municipal Building is where dreams die. Thursday was no different.
Word of a nationwide foreclosure lawsuit settlement did not register here as the investors gathered for their weekly auction to pick over the carcasses rendered to them by bad decisions and bad luck.
“Only homes that have an outside bid will be called at the auction,” Deputy Public Trustee Madeline Fenton reminded the bidders, just in case a newbie had slipped in among the veterans. “The others will just be quietly returned to the bank.”
Most of the 26 homes on Thursday’s foreclosure-sale list went like that. Only nine drew outside bids beyond the lender’s bare minimum acceptable offer. One of those was withdrawn, leaving eight seeking competitive bids.
There is competition — but not drama. Most of the 60 or so people (almost all men) who gather at 10 a.m. sharp each Thursday know one another from years of attending these weekly meetings. There is a lot of goodwill, though trust is at a premium (no talking allowed, no laptops allowed, no passing notes allowed; cash, cashier’s checks, teller’s checks or official checks only, please).
This would be the most boring reality TV program ever.
Tenaj Tannenbaum, another deputy public trustee, conducts the auction with the skill of an accountant and the demeanor of a librarian.
“Number 2009-2745 with the address of 3340 Marion Street,” she says in a flat monotone. “$119,579 and 47 cents. Will you bid that plus $1?”
When the answer is yes, we’re off, one pre-registered bidder at a time, until the price reaches $144,500 and all but one has dropped out. We have a winner.
Auction day is a lesson in the breadth of the foreclosure crisis, which will continue long beyond the settlement of the lawsuit. From a $400,000 brick Tudor-style in Stapleton to a modest west Denver ranch, each of the homes sold Thursday was, until recently, occupied by a middle-class family.
Tsegaye (pronounced Su-gai) Habtegebreal and Senayit Woldemeskel were among them.
Until November, the couple lived in a tidy two-story home in Green Valley Ranch’s Carriage Park subdivision.
I couldn’t find them Thursday, but a former neighbor helped me with the first-name pronunciation. Habtegebreal left his job at an airport-parking service, and there was no sign of them in an Aurora apartment complex listed in computer records as a new address. But their story exists in Denver official records, and it is a familiar tale.
They bought the home in 2000 for $160,000, putting down $12,760 and borrowing $147,240 from Countrywide. (Remember them?)
All was well until 2004, when they refinanced, perhaps for improvements, now borrowing $190,000 — with an adjustable-rate mortgage starting at 6.875 percent. Within four years, they were in trouble. They gamely fought off foreclosure for a couple of years, but Thursday, their house at 4310 Malta St. was on the block in Room 1.B.6. And they were gone.
It’s now owned by the 5280 Capital Group in the person of Joe Minnis, who paid $103,000 — well above the lender’s minimum requirement of $74,751, but far less than what the bank is owed on that $190,000 note.
Minnis is a former property developer who got into the foreclosed-property business about three years ago when the building business hit hard times.
His companies buy a lot of properties at auction each year, making their money from volume and quick turnarounds. Like everyone else in the room, he is a devout pragmatist who never makes the mistake of falling in love with a home on the block.
“These aren’t dream houses here,” Minnis said. Not anymore, they aren’t.
Minnis said he would put some fix-up money into 4310 Malta, get it on the market in 30 days and, with any luck, be shed of it within 90.
“The way I look at it, we’re going in and improving communities by getting these cleaned up and sold to someone else,” Minnis said. “These are neighborhoods that had several of these and want them cleaned up.”
True to his word, by 3 p.m., Minnis had the locks changed at 4310 Malta. The security alarm inside was still beeping. The new owner hadn’t yet taken down the wind chime the last guy left hanging on the front porch.
Habtegebreal, Woldemeskel and other previous owners of the houses that changed hands here Thursday won’t benefit from the $25 billion nationwide settlement or the nearly $205 million coming to Colorado. Only homes sold at auction before Dec. 31 of last year qualify for a possible cash settlement of claims. They might have been just as wronged, or just as unlucky, as those who get checks, but lawsuits need an opening and closing date, and these folks lost their homes after that date passed.
Life’s not fair. Everyone in 1.B.6. knows that.
Chuck Murphy’s column appearson Monday, Wednesday and Friday. Reach him at 303-954-1829or cmurphy@denverpost.com.
