Local worker wins housing without winning a lottery
Aspen Times Staff Writer
A longtime local worker who read the fine print in the newspaper is poised to buy a deed-restricted condo at a steal of a price.
Peggy Johnston submitted the highest bid for the two-bedroom condo in a foreclosure proceeding earlier this month on the steps of the Pitkin County Courthouse. In fact, she was the only bidder, other than the bank.
If the deal goes through, she’ll buy the unit for about $30,000 less than the condo would fetch if it was sold through a lottery by the housing office. But the fact that the unit was in foreclosure meant it wasn’t subject to the lottery system.
The purchase apparently caught the Aspen-Pitkin County Housing Authority by surprise. Staffers are now reviewing their policies to make sure it doesn’t happen again.
“It was serendipitous,” Johnston said. “I am happy as can be.”
The 31-year resident, who works in the county’s finance office, has tried to win past housing lotteries without success.
Her pending purchase of the Midland Park unit won’t be final until late September, after a 75-day redemption period has passed, during which the estate of the unit’s previous owner, the late Doug Valley, could pay off his outstanding mortgage debt and take possession of the property. In that case, the unit would probably be turned over to the Aspen-Pitkin County Housing Authority to sell through a lottery.
Valley died late last year and Wells Fargo Bank West foreclosed on his Midland Park condominium.
The notice of a public trustee sale, at which the property was to be sold at auction to the highest bidder, was published for five consecutive weeks last spring among the legal notices that appear in the Aspen Times Weekly. The auction took place on July 9.
Wells Fargo Bank submitted a letter to the county treasurer’s office bidding $108,574.40 for the unit – the sum Valley still owed on his mortgage. Johnston bid a dollar more and won the unit. The bank will be repaid with her purchase.
If the sale goes through, she will also have to pay unpaid homeowner’s association dues for the condo totaling a few thousand dollars.
Had the unit been sold through a Housing Authority lottery, the price would have been roughly $138,000 – the price Valley paid plus the appreciation allowed under the deed restriction for the condo, said Cindy Christensen, housing operations manager.
“We’ve had one or two that have gone into foreclosure. The bank has bought it and turned it over to us,” she said. “We thought it was going to be bought by the lender. This has never happened before.
“Hopefully, this is not going to happen again.”
The housing office is notified whenever a deed-restricted unit goes into foreclosure. The owner is contacted and required to put the unit up for sale through the housing office if the overdue debt cannot be covered, according to Christensen.
Housing officials were aware that Valley’s unit was scheduled to be sold at auction, but the housing office wasn’t represented at the auction to submit a bid, she said.
It is rare that a deed-restricted unit is actually sold at auction. On one previous occasion, a buyer outbid the bank at the auction, but that individual was not a qualified local worker and couldn’t keep the unit, recalled Carol Foote, the county’s deputy public trustee. In that case, the buyer immediately had to sell the unit through the housing office lottery.
In Johnston’s case, she is qualified to own the unit, though she will be a single individual with a two-bedroom condo.
Generally, units sold through the lottery system go to “priority” bidders, meaning a two-bedroom unit would be sold to a household with at least two members.
The Housing Authority’s attorney advised staffers that Johnston could not be held to that priority; she is legally entitled to buy the condo.
Johnston said she presumed the condo was a one-bedroom unit when she decided to enter a bid. “I didn’t think they would give me a two-bedroom,” she said.
[Janet Urquhart’s e-mail address is email@example.com]
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