Calculated Risk had an entry today from Jim the Realtor about courthouse steps foreclosure sales which the lenders are actually allowing to go for less than the amount owing on the first mortgage. Needless to say, with a lot of real estate severely underwater (even on the first mortgage, never mind the second), if the lender requires a minimum bid enough to cover what is owed the lender, then the lender gets to buy the property back. I don't need to say this but I will anyway: this is why lender inventory (REOs) continues to grow, even tho they are aggressively trying to unload this crap (for less than is owed them on it).
You have to ask them: why would you buy it, if you then have to carry it (and sound banking practice being to maintain it and pay taxes and utilities and so forth on it), only to sell it for considerably less later on? You just increase your cost and you don't get your money back, anyway. What are you, stupid?
Whatever they may or may not be, courthouse steps auctions are grudgingly becoming what they once were in the past, and should never have stopped being: a crap shot at a bargain. These things are sold as is, no warranty, with possible other liens on them, sometimes without even an accurate or complete address specified at the time of auction AND you have to have cash at the time if you win (cashier check or, presumably, a briefcase full of folding green stuff). And, finally, a few people are buying them _other than_ the lender.
I wouldn't call this a bottom. I would call this one more teeny tiny step towards sanity and good practice.