Auction by Calif. firm hits snag again - The Boston Globe

Alexandria MacKinnon and her husband made the high bid on a Brockton house at a Real Estate Disposition auction in March at the Hynes Veterans Memorial Convention Center. The company told them to prepare for a closing by May 8, so the couple gave notice to their landlord and qualified for a mortgage loan. Then the closing was postponed indefinitely.

The mortgage company told the MacKinnons it couldn't make the loan because the seller did not yet own the home. Real Estate Disposition was warned by state regulators before the March auction against including any properties it did not have the right to sell. The company has said it auctioned several such properties at a previous event in November.

The lease on the MacKinnons' Brock ton apartment ends May 27, and the landlord already has a new tenant. We have a three-month-old daughter, and now we have nowhere to move," MacKinnon said. California-based Real Estate Disposition did not return calls or an e-mail asking for comment. In several cases, the closings were delayed because properties had been auctioned before the foreclosure process was complete. Mortgage firms had Real Estate Disposition auction off properties that they didn't yet own.

In response, Massachusetts regulators sent a letter to the auctioneers warning against including any property in the March auction where the foreclosure process was not complete. The auctioneers could lose their state licenses if they violated the rule. Regulators said yesterday they had not yet received the MacKinnons' complaint, but as soon as they do, they will ask the company to respond.

The Division of Standards, which oversees auctioneers, said its investigation of the November sale was ongoing. The MacKinnons originally were interested in a different foreclosed home in Brockton. They made an offer, but the lender never responded. Instead, it asked Real Estate Disposition to auction the home.

On the weekend before the March auction, the MacKinnons decided the first home would require too much renovation. Then they saw the house on North Cary Street. It was a good home, nice and solid," Alexandria MacKinnon said. So we went to the auction to bid on it." Their winning bid of $195,000 was the most they were willing to pay. The auctioneer dropped the gavel as a rival bidder raised his hand once more.

The MacKinnons thought they had just bought their first home. Binyamin Appelbaum can be reached at bappelbaum globe.com. Copyright 2008 Globe Newspaper Company.

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