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Wheel 'N' Deal

Tours that make it easy for buyers to view foreclosed houses are cruising the Southland. But not everyone is on board.

April 27, 2008|Chip Jacobs | Special to The Times

The homes, owned by Washington Mutual, Wells Fargo, Countrywide and other nameplate lenders, typically have been for sale roughly three months. Most people making an offer on a house they saw on the tour use Haro's real estate agents to represent them and EquiFinance, LTV's mortgage unit. Like many real estate firms, LTV locates foreclosures through the Multiple Listing Service or private channels. In almost every case, the foreclosure occurred because the previous owner had an adjustable-rate mortgage with little or no equity, Haro said.

For buyers, it's a golden chance in an imploding period. Last month, 38% of homes sold in Southern California were foreclosures, compared with 8% in March 2007, according to DataQuick Information Systems. Overall, home sales plunged to their lowest level in 20 years during the traditionally brisk, spring home-buying season. Median prices for a typical Southland home fell 20% from a year ago.

At 58, Peter Rodriguez was one of the older looky-loos on the tour. He said he was searching for a "middle market" investment out of reach before.

"If you're looking to get rich quick, bet it all on red in Las Vegas," said the water-district worker. "I'm looking for a property I can rent out and make a little money from."

As Rodriguez spoke at a small Pasadena house LTV presented, several neighbors glared at the bus. LTV had it wrapped with a special glossy paint job depicting a smiling family next to a "SOLD" sign. Whether on freeways or inside neighborhoods, onlookers frequently glowered or did double-takes at the rolling sales pitch. At only one spot did neighbors seem heartened to have the troupe pull up.

Well aware that some communities have berated the bus concept as bargain shopping for somebody else's misfortune, Haro and his colleagues have their arguments sharpened. If not on a tour, people would shop for foreclosed homes with their agents. And by helping fill vacant houses, he claimed, they're reducing blight, crime and property devaluation. Besides, Haro said, he's not running a party bus "serving margaritas."

"We're putting together a distressed property to a buyer, and that's all," he said.

Packed as the tours have become, they aren't even on the radar screens of some industry experts, including the National Assn. of Realtors, which hadn't heard about them until contacted by a reporter. USC real estate professor Raphael Bostic wasn't aware of them either, though he wasn't surprised. "In every downturn, there are lots of folks waiting to swoop in and take advantage of a situation," Bostic said. "It's part and parcel of a capitalistic society."

Whether it's right or wrong, it seems to be working. Two riders eventually bid on the vandalized Monrovia place.

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