The feeding frenzy started slowly when bidding opened at the foreclosure auction and opportunistic developers nibbled on the discounted homes and vacant land.

They were optimistic despite an uncertain future and the economic gloom.

For the more than 50 bidders at the east entrance to the Hidalgo County Courthouse on Tuesday morning, there was the potential for a deal and a profit.

Lee Villarreal stood aside from the crowd and next to his hired bidder as he waited for the homes he wanted to be auctioned. The former banker buys cheap, decrepit properties, fixes them up and puts them back up for sale.

He's picky and since the number of foreclosure filings has risen dramatically in recent months, he can be. His niche: renovating older homes and selling them to the younger set who find such nostalgia hip.

"I want to buy something that's not going to pass inspection," Villarreal said.

But for Villarreal there's still a limit. He walked away after the two-hour auction with nothing - one home he wanted went for too much and the others were never auctioned.

The banks come knocking

Reflecting the toll the economic crisis already is having on the Rio Grande Valley, 8.2 percent of property owners with loans in Hidalgo County entered foreclosure proceedings in the past 18 months, according to data released last week by the U.S. Department of Housing and Urban Development.

While not all of those properties were foreclosed upon, the high number is indicative of how the country's economic woes are ailing Valley residents.

Not all of the record 748 homes on the auction list were actually up for auction - some homeowners cut deals with the lien holder and others worked out a payment schedule.

And then there's Hope Ruiz, who waited patiently to stop a foreclosure sale on a homeowner whose house was about to be foreclosed. The homeowner had declared bankruptcy.

She has waited outside the courthouse the first Tuesday of every month to serve court orders stopping sales for more than 20 years.

"Bankruptcy is high, very high this year," said Ruiz, a former real estate agent. "I'm supposed to be retired."

Bankruptcy filings spiked this year in Hidalgo County as increasing numbers of people sought protection from creditors amid the deepening world-wide economic crisis. Filings are on pace to rise 70 percent this year, according to data gathered from the McAllen office of the U.S. Bankruptcy Court for the Southern District of Texas.

Preparing to buy

Many of the properties were never sold, so their respective bank placed the winning bid. While the bidders were optimistic, they weren't stupid. It's becoming more difficult to sell a home.

"It's very, very difficult to sell," said Dale Robertson, a Brownsville-based lawyer who walked away after the two hours of auctions empty-handed. "People have difficulty getting loans, and combine that with people starting to feel uncomfortable with the economy."

Increasing economic pressure and tighter lending standards have stifled borrowers and made banks more reluctant to extend loans. About the only people able to find financing are those with good credit and a healthy down payment.

The pressure has driven the average value of a new, single-family home in Hidalgo County to a record $155,600 in August because low-income homes are not selling.

Herman Woloski wore a flashy Hawaiian shirt plastered with poker chips and other gambling insignia. He flips rundown properties but lately has had trouble selling homes. He now finances them himself just to make some money.

"There are no more good deals. The good deals are gone, and when there is a good deal, people jump," Woloski said. "Hopefully within two to six months the market will start picking up."

Sean Gaffney covers the economy, business and general assignments for The Monitor. He can be reached at (956) 683-4434.