The rash of foreclosures in 2009 created a desperate situation for county clerks required to process the resulting foreclosed home auctions. Miami-Dade County, Fla., is an example. In years past, the county typically processed 5,000 to 6,000 foreclosures annually. During 2009, by comparison, the county handled nearly 20 times that amount, said Harvey Ruvin, clerk of the Circuit and County Court of Miami-Dade County. In December 2009, the county tackled the workload by deploying Miamidade.realforeclose.com, a Web site powered by Realauction.com, on which citizens could purchase foreclosed homes online instead of visiting the courthouse. The Web tool also automated several administrative steps in the foreclosure auction process.
With the new system, Ruvin expects to triple the number of auctions he can process per week, finally clearing the backlog that has plagued his office. Here's how Miami-Dade executed this strategy.
These days, the county gets roughly 7,000 foreclosures to auction every month. In the past, bottlenecks resulted from conducting physical auctions at the courthouse. Before deploying the online system, the clerk could only manage to auction foreclosed homes three days a week. That expanded to five days a week with the online auction. The first online auction was held in January.
"We were doing around 750 per week," Ruvin said in December. "That ought to be at least doubled, and maybe tripled, once we get going with our five-day-a-week auctions online."
Holding auctions online also eliminates much of the buyer chicanery that Ruvin battled with onsite auctions. For example, experienced foreclosure buyers frequently prey upon newcomers, confusing them about the process so they don't place competing bids. Fights often erupted, which required Ruvin to pay for extra security staff and run surveillance cameras to maintain order. The incidents also consumed valuable time for senior staff, who had to review security footage to make judgments about the way altercations were handled by onsite staff.
"Sometimes there are objections to sales from attorneys and you have to look at the video to determine what happened," said Shirley Shabazz, civil division chief of the county Clerk's Office.
Ruvin said the online auction would eliminate 23,000 hours of labor annually, translating to roughly $250,000 in savings each year. He said the online system came in the nick of time because county staff resources are scarce. In late 2009, the clerk was forced to implement an 18 percent budget cut, resulting in 150 layoffs.
"It's coming at a time when our workload is spiking and there is a real demand to get these cases moving," Ruvin said. "A lot of these homes are abandoned in neighborhoods where they become centers of crime and other things that blight those communities."
No longer holding auctions at the courthouse lets those employees be redeployed to other projects, according to Shabazz. In addition to security and surveillance staff, the county paid an auctioneer, two cashiers and a few other employees to keep auctions running smoothly. Now those employees can do other tasks.
"They may be redirected to other areas of the foreclosure sales process. They could be helping with the notices of sales. They could help with the titles we process," Shabazz said.
Converting foreclosure auctions to the online system eliminated a back-office hassle that nearly debilitated foreclosure processing. Hundreds of foreclosure judgments are made at the court each day. Before the foreclosed home can be auctioned, a notice of sale must be generated by the clerk's office. These were stored in hard copy form at a building near the courthouse, which potential buyers had to visit to peruse the upcoming purchasing opportunities. Now anyone can view this information on the Web. Before the online system, it took three to five days for the clerk's office to generate one day's worth of foreclosure judgments. Now it takes
roughly two hours, according to Ester Jones, project manager for the clerk's office.
In the past, creating a notice of sale required manually typing legal language from the hard copy version of the foreclosure judgment, as well as language from other documents. Three employees in the clerk's office did this and could only process roughly 250 notices of sale per day.
"Having automated this on our site, we're able to pull up the form via the online auction site," Jones said. "It actually snaps an image of the legal language from the judgment, which means there is no error rate. No one is hand-typing that into the form."
Having all of the necessary documentation online removed an additional problem that often ensued after the sale of a foreclosed home. Sometimes citizens would take documents that were necessary for post-sale paperwork out of the publicly available file-viewing facility. This would delay sale completions, bogging down clerk employees further. Now if citizens take documents, sales can finish on time regardless because electronic versions of those documents exist.
Putting the auctions on the Web also opens them up to more bidders, which could raise the prices, Ruvin added.
"Now anybody in the world can bid, and they can do it on their own time and in their own place," he said. "You can even do it over a BlackBerry or iPhone."