Continued: Auctioneer's gavel signals one dream lost, one found

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Janel Bergum is excited to move into a "cute" Birchwood, Minn., house with four bedrooms and "a nice fenced-in yard."

Her father, Mike Jesmer, bought the house for her on Saturday for $125,000 at an auction held to help mortgage lenders clear the big backlog of foreclosed properties that was created after home prices collapsed and the economic crisis took hold. Some Twin Cities residents lost their homes after taking on mortgages too big for their incomes. Others could no longer make monthly payments after losing jobs.

"I was very apprehensive and nervous when we came here," said Jesmer, who bought the house at the Minneapolis Convention Center event that featured a tuxedo-clad auctioneer. Now Jesmer is looking forward to his daughter and three granddaughters moving into a house that's just a few miles from where he and his wife live in Mahtomedi.

Real Estate Disposition Corp., a California-based company that sold nearly 33,000 foreclosed homes in 2008, handled the auction that included pulsating rock music, such as "Living in America," before the rapid-fire bidding began.

Bidding assistants raced up and down the aisles of a ballroom that was packed with 1,000 people -- more were in an overflow room -- as would-be homeowners and investors bought a foreclosed house every two to three minutes.

The assistants, also wearing black tuxedos, waved their arms and blew their whistles to attract the attention of auctioneer Mike Carr when a person in their sections wanted to raise the bid.

Carr, who spoke with a strong Georgian accent, barely had time to take a drink of water between sales as he coaxed the audience to bid higher on each foreclosed property as it was displayed on a big screen. One bidding assistant, sporting a crew cut, leaped on to a chair, screamed "yes" and pumped his fist as a bidder he was handling succeeded in buying a home.

Heide Lidstrom-Olson and her husband, Tarryl Olson, of Eagan, didn't allow the sizzle of the auction to distract them. They were there on business. Veterans of similar auctions, they bought three houses in St. Paul that they plan to turn into rental homes. They had bought five residential properties at earlier auctions.

On Saturday, they paid $57,500 for a house that once had sold for $310,000. Tarryl had carefully analyzed the conditions of all of the houses they bid on, and Heide had a complete breakout of earlier valuations and estimated repairs. They bought two other houses, for $55,000 and $32,500. The couple said they look for properties that need paint, carpeting and new appliances, but are in almost move-in condition.

Judy and Mark Rygh of Mounds View purchased a Ham Lake home, once valued at $325,000, for $95,000. They'll need to sink some money into house repairs, but they're thrilled the property sits on nearly two acres of land.

Judy Rygh, who was attending her first house auction, said the experience was "a little scary," but she was relieved to get the house for the $95,000 limit the couple set for their bid.

Banks turn to REDC to auction off the houses so they can recoup some money from foreclosed properties.

About 40 to 50 protesters, organized by the Minnesota Coalition for a People's Bailout, gathered outside the convention hall Saturday to call for a moratorium on foreclosures.

But they didn't cross paths with REDC President Jim Corum, who said, "Our goal is turning houses back into homes." About 165 properties in Minnesota were sold Saturday.

"The American dream is to buy low and sell high," Corum, a 21-year veteran of the Marine Corps, told bidders Saturday. Many of them took advantage of prices and interest rates that have fallen since the housing bubble deflated. "A lot of people were priced out of the market."

Liz Fedor • 612-673-7709

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