As a result of the mortgage meltdown and financial crisis, banks have frozen credit. So many Americans will find it tough to get a loan. WOSU went to the Franklin County Sheriff's auction today to find out if people can afford foreclosed properties.
About three dozen people sit in on the sheriff's auction. Some of them are plaintiffs, trying to buy back defaulted properties; others just watch - wondering if now is the time to invest in a foreclosed house.
"Just trying to find out how it works and if I might want to get involved in the future," Joe Reilly from Dublin said.
This is Reilly's first time at the auction and he did not buy anything. He's a real estate investor and owns other properties. Reilly recognizes there is a credit freeze, but he thinks that's more at the national level rather than locally-owned banks. He does not think it will prevent him from getting a loan if he wants one.
"Getting credit has not been a problem because I have good established credit from prior relationships. I think credit is available to those who are well positioned," he said.
There were 158 foreclosed properties available. Most of them were houses. Appraisals ran the gamut - from $4,000 to $2.3 million. The median appraisal price, though, was about $103,000.
While the majority of the houses were purchased by plaintiffs - the banks - there were a couple of bidding wars. One property started at $140,000 and ended up selling for $182,000. That was one of the more expensive purchases during the auction.
Both presidential candidates have suggested plans to help struggling homeowners and banks.
Democratic candidate Senator Barack Obama told a Chillicothe crowd Friday he supports reworking mortgages. And Obama said he wants to make sure the Treasury does not overpay for defaulted mortgages.
GOP candidate Senator John McCain reminded a Wisconsin crowd Friday what he said earlier this week during the debate. McCain proposed a Homeownership Resurgence Plan that would refinance troubled mortgages.