Driven inside by steady rain, nearly 30 real estate investors promptly piped down Monday when a foreclosure auctioneer warned they were getting too noisy in the main hall of the Sonoma County administration building.
"We're already in trouble, guys," Amber Andewiel declared, before auctioning off a Wyoming Drive home in east Santa Rosa for $280,100.
The auctioneers and bidders fear they soon may need to move the foreclosure auctions from the administration building at 575 Administration Dr., a site they say they has been used for at least two decades.
County officials, citing an explosion in foreclosures, say the auctions increasingly impede public access to the building, the site of the Board of Supervisors meetings. As such, officials have announced plans to prohibit the auctions at the county building after March 1.
"This is private business," county Real Estate Manager Michael Wagner said of the auctions. "It is not county business ... The county is not required to provide a location for these transactions."
In the past year the number of auctions has "dramatically increased," Wagner wrote in a letter to the industry. During that time the county has received numerous complaints regarding access problems caused by the auctions.
But investors and auction organizers say they hope to find a way to continue using the county property. And they insist they aren't asking for any different treatment than government has provided elsewhere in the United States.
"These are held on the steps of courthouses across the country," said Brian Burke, a Santa Rosa real estate investor who on Monday purchased a Mountain View Avenue home in Petaluma for $335,750 from one of the three separate auctioneers present.
Five years ago, foreclosures were rare in Sonoma County, partly because rising home prices offered financially troubled homeowners with both incentives and alternatives to losing their homes.
In 2005, lenders seized only 25 properties in foreclosure proceedings. But as prices tumbled, foreclosures soared to 2,800 last year in Sonoma County. Nearly 1,500 more properties were lost in foreclosure during the first nine months of 2009.
In sunny weather, the auctions are held outside. Investors said the gatherings recently were moved away from the front doors in order to allow the public better access to the administration building.
Some states require lenders to use the courts for foreclosures. But in California lenders overwhelmingly choose to use a non-judicial, though "highly regulated" foreclosure process, said Phil Adleson, attorney for the United Trustees Association. The Irvine-based group includes companies that provide foreclosure and default service.
Under California's system, Adleson maintained, the county still benefits by providing one central location for all the auctions. That approach brings in more bidders, boosting sales prices and, indirectly, county real estate values and property taxes.
Moreover, moving the auctions by March 1 would require extra expenses and delays associated with new postings and public notices, Adleson said.
The association is sending a letter to the county, seeking a chance to talk about alternatives to a ban on auctions, Adleson said. That might include helping draft a set of rules that ensure unhindered public access or an alternate location for the auctions elsewhere on county property.
"There's a lot of room in some of those public buildings," he said. "I can't conceive that they don't have a spot."