.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;}
Melanie Lemley reviewed the number of sheriff’s sales she would coordinate in the coming weeks and offered a bit of wishful thinking.

“I hope by the time I return we’ll be back to once a week,” said Lemley, who will take a brief break from conducting property sales for the Polk County sheriff’s office when she goes on maternity leave in January.

“But I know it won’t slow down for a couple of years.”

Beginning this week, the county will conduct the sales of foreclosed properties two times a week, hoping to find buyers for at least 30 properties at each sale.

Lemley knows that things won’t slow down in January.

“I’m hearing through the grapevine that this wave of ARM (adjustable-rate mortgage) loans is about over, and now it’s coming down to the common, hard-working man,” Lemley said.

That suggests that mortgage holders are thinning out foreclosures related to fluctuating interest rates and buyers who were able to afford a home through generous lending practices, what some people in the real estate business call “NINAs,” short for no-income, no-asset borrowers.

Lemley represents the end of the line for homeowners and businesses that have run afoul of their mortgages.

Foreclosures happen in court or through voluntary agreements between lenders and property owners.

Once that process has run its course, a special execution notice that the property is ready for sale is issued to the sheriff’s office. Lately, those notices have been arriving at the rate of 100 a week.

That means a backlog in properties to be sold from an increase in foreclosures, not to mention more benign influences, such as Wells Fargo & Co. delaying foreclosure actions during the spring and summer floods. Some lenders also take a break from foreclosures during the holidays, Lemley said.

The number of sheriff’s sales in Polk County spiked in 2005, going to 1,152 from 551 the previous year.

This year will set a high for the decade, with 1,634 special executions received by the office through October, compared with 1,562 for all of 2007.

Most of those numbers reflect individual homeowners who have defaulted on mortgages.

Lemley said she is seeing some increase in commercial foreclosures, such as on apartment buildings and strip malls, but such actions are few and far between so far.

Sheriff’s sale goes commercial

She had no problem finding the next sheriff’s sale of a commercial property. That is scheduled for January, when a commercial condominium project, Airport Plaza Condominiums, will go up for sale.

Airport Plaza was developed by Daniel Stanbrough and Dave Walters at 6151 Thornton Ave.

In 2002, their Airport Plaza LLC obtained a $2.7 million mortgage loan from Commercial Federal Bank, now known as Bank of the West.

In May 2007, the bank foreclosed on the mortgage.

In December 2007, the property was placed under the management control of Iowa Realty Commercial while the foreclosure was being litigated.

The property’s assessed value that year was $2.5 million, divided among nine commercial condominium units that at the time were occupied by various businesses, including a scuba diving shop and a bar and grill, as well as offices for both Stanbrough and Walters.

However, by the time Iowa Realty Commercial began managing the property, most tenants were gone.

Brad Hickok, property services manager for Iowa Realty Commercial, said the property was overvalued.

He presented a case for lower valuations to the Polk County Board of Appeals.

“I just put my facts together and went before the Board of Appeals,” Hickok said.

As a result, each of the nine units was reassessed and the value for the entire complex dropped to $1.6 million.

Iowa Realty Commercial won’t be among the buyers for Airport Plaza Condominiums, Hickok said.

“Iowa Realty isn’t in the buying mode for that kind of stuff,” he said. “We manage it, lease it, position it for sale.”

Hickok anticipates that there will be an increase in sheriff’s sales of commercial properties.

Iowa Realty Commercial has told local banks that it is available to manage troubled properties, Hickok said.

Lenders are taking on millions of dollars of property mortgaged to various Regency entities as the result of forced foreclosures in the courts and voluntary agreements under which Regency principals turn over the deeds to properties.

“I think there are others out there that might find times difficult,” Hickok said.

In addition to the lower assessed value, it is likely that Bank of the West, like most lenders that take back problem properties, will have a difficult time getting its value out of a sheriff’s sale.

“They’re already at a loss when they’re at a sheriff’s sale, anyway,” said David Horak, former president of the Iowa Mortgage Association.

In the lawsuit seeking to foreclose on Airport Plaza Condominiums, an attorney for Bank of the West noted that the “real estate (at fair market value) is insufficient to satisfy the indebtedness.”

At the sale, lenders have the first bid, figuring it is better to get the property back than to take a large financial loss on the sale.

“They are the highest bidder and the only reason they’re doing that is if they don’t have the property, they’re not going to get anything back,” Horak said.

Lenders typically lose 30 percent of the loan value of a property as the result of a foreclosure and sheriff’s sale, he said.

However, that number compares with losses of 50 percent or more in more economically distressed areas of the country.

The reason? Iowa owners tend to take better care of their property, even when they might lose it.

“We don’t see properties that are beat-up and run-down,” Horak said.