State investigating homes auction

Foreclosures may not have been final

The state is investigating a November auction of foreclosed Massachusetts homes by Real Estate Disposition Corp. to determine whether some homes were sold before the foreclosure process was completed.

The Massachusetts Division of Standards, which licenses auctioneers, also sent a letter to four of the company's employees warning them against including such homes in a second Boston auction scheduled for tomorrow.

The letter from Charles Carroll, the division's deputy director, warns that the employees could lose their state licenses if they auction properties prematurely.

The California company plans to auction about 170 Massachusetts homes at the Hynes Veterans Memorial Convention Center. The company's November auction included about 300 properties.

The Globe reported this week that about a quarter of the winning bidders at the November auction have yet to close on their homes. In several cases, bidders waited months for mortgage companies to take ownership of the homes that the companies had offered at the auction.

A spokesman for Real Estate Disposition did not return a call for comment yesterday.

The company has previously acknowledged the problems with the November auction, and said it has changed its policies to exclude any property from the auction until foreclosure is complete.

The Division of Standards said it had not received any complaints about the November auction, but instead was acting in response to the Globe story. A spokeswoman, Kimberly Haberlin, said the state is investigating whether Real Estate Disposition knowingly sold properties prematurely. The state is reviewing the company's records to determine what steps it took to screen properties included in the auction.

Haberlin said the state also would send a compliance officer to observe tomorrow's auction.

Binyamin Appelbaum can be reached at bappelbaum@globe.com.