LAS VEGAS—Every weekday morning at the stroke of 10, the faithful gather at 930 S. Fourth St. to gamble.

But this isn’t a casino. It’s the parking lot of the Nevada Legal News.

Here, every Monday to Friday, 50 to 60 realtors congregate to bid on America’s broken dreams, homes wrenched from people’s grasp by banks and put up for auction.

The atmosphere resembles a racetrack — without the cigarettes, shredded bets and losers staring into space.

Here, realtors wear hats and sunglasses; some have earpieces; and they study the realtors’ equivalent of the Racing Form — long lists of foreclosed homes, rich with detail: previous selling prices, current condition, neighbourhood, occupied or vacant, square footage, number of bedrooms, baths and amenities.

Today more than 300 are up for grabs, just as there are every day.

It’s a scene being repeated across America.

Since the housing market went bust in 2007, some 4 million American homes have been foreclosed. This year 1.25 million of those will be auctioned — up 25 per from last year.

Here in the Nevada desert, local realtors estimate two-thirds of all homes in Las Vegas are “underwater,” meaning owners owe more on their mortgages than their homes are worth.

Once the fastest growing city in America, Vegas reigned as the foreclosure capital for 22 straight months through last October. It remains in the top 10.

Jon Spinogatti, wearing a smart fedora and $400 shades, has been playing the Las Vegas auctions since 2008. He’s on a roll.

As an auctioneer with glass-shattering vocals cries out bids, Spinogatti leans in and whispers, “This place is a snake pit.”

He had spent 4.5 months learning how to handicap a house — how to evaluate with precision; how to take legal possession; how to fix it and flip it.

But even after all that prep, he was nervous.

“I was quaking in my boots,” he says. “There were just 10 of us then.

“I bid $47,000 for it. We sold it for $99,000 — basically doubled our investment. That was a great one. Cash deal. Quick. Took two months from start to finish.”

After that, he and his then-business partner were snapping up a couple of homes a week, about 100 a year. They would clear the liens, pay the back taxes, secure the deed, “rehab” and sell the houses to buyers — some from out of state, some from out of country.

Spinogatti got into it because he had that game-changing experience most men do.

“I had a kid,” he says. “And I decided I wanted to do more with my money and more with my time.”

He was about to turn 40 and didn’t want to end his days like some version of Frank Bascombe, the sportswriter-turned-realtor in Richard Ford novels, who measures his days in home showings, roaming America’s subdivisions with strangers in his car.

“I just didn’t want to bring people around anymore.”

His strategy paid off, as his gold-coloured Cadillac in the parking lot attests.

Spinogatti won’t say what he earns. But he has brought $400,000 in cashier’s cheques — the houses sell only for cash.

“There are some people down here who are making $16,000 to $20,000 a week,” he says.

The quick calculation? As much as $1 million a year.

But others buy and create revenue streams, picking up a house for say, $60,000, renting it out for $900 or $1,000 a month, and making their money back in five or six years.

“That’s a great rate of return,” says realtor Kenny Lin, president of InvestPro Reig, who is seated nearby. “You can’t lose money on this.”

If and when property values return to previous levels, investors can then sell the houses at a profit.

Spinogatti is shifting to the hold-rent-sell strategy now.

The reason is simple. The Vegas auction has attracted more realtors with deeper pockets. They are driving prices up and profits down.

“This used to be the best-kept secret at one time,” says Tom Fehrman, a local broker with the Property Source. “Guys could come down here and really score good deals. But now the cat’s out of the bag. It has gotten far more competitive.

“But every once in a while you’ll get a nugget.”

Fehrman flipped 66 houses in 2011. He’s hoping to hit 100 this year.

He feels the U.S. housing market is at or near the bottom and “this is only going to last another year or two.”

Still, Las Vegas-area real estate prices are down almost 62 per cent from their peak in 2006, compared with a national decline of 34 per cent, according to a recent study.

As bidding resumes, the realtors return to their lawn chairs. Using laptops and smart phones, some beam the auction back to unseen offices, taking “audibles” from investors off-site, perhaps offshore.

The prospect of sunny properties at deep-discount prices has been a magnet for foreigners: Canadians, Mexicans and newest of the nouveau riche, the Chinese, lead the pack.

“Vegas is on sale right now and Canadians know it,” says Fehrman. “There are millions of Canadian dollars circulating in this market.”

No one knows the precise number of Canadian dollars spent on Vegas real estate, but nationally, Canadians bought more than $9 billion worth of U.S. real estate last year.

“Here in Vegas there’s more Chinese money coming in now,” Fehrman adds.

Menguei Sun, of Beijing, a slight woman dressed in jeans, a silk floral jacket and pale green camisole, arrived this morning behind the wheel of a white, Mercedes convertible.

She is “educating” herself, she says. She doesn’t “yet” represent Chinese investors.

“But I hope to.”

A “big fan” of Warren Buffett, Sun says it doesn’t take rocket science to understand the opportunities here.

“Buffet says the single-family house in America is a better investment than stocks. But you have to hold it long. And the risk here in Las Vegas is low.”

Local realtor David Fahrny is part of a growing group of disgruntled Americans — once thought of as fringe, but now mainstream — who have questioned the legality of the foreclosures, and criticized the banks’ role.

“This is the biggest fraud ever,” he says, over a Starbucks coffee in west Las Vegas.

Federal investigators last year found that a number of major banks had recklessly and even fraudulently forced people into foreclosure, in some cases even telling bank employees to use fake titles to speed up the process.

The reason was simple, says Fahrny: the banks didn’t have the documents needed to legally foreclose.

“They basically had Excel spreadsheets of mortgages, and then started trading among themselves and there was no real record of where each mortgage went. So now we’re in this predicament. Who really owns what? We don’t really know.”

American anger against the banks crystallized in a March Rolling Stone article in which author Matt Taibbi called Bank of America, “the world’s worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend.”

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Fahrny remembers the glory days of the rising Vegas real estate market fondly, before it all came crashing down.

“It’s a mess out here now,” he says, as he begins to tell the tale of how Vegas got into it.

That changed everything.

Suddenly it became a right, not a privilege, for anyone to buy a house, says Fahrny’s business partner Suzie Marquardt — “whether they could pay back the loan or not.”

By 2004, people in Vegas were standing in line for days to put their name on a list to make an offer on a new house.

“Investors were buying up new houses and builders didn’t care who bought them. They just couldn’t build them fast enough,” Fahrny recalls.

Bidding wars broke out, people were offering tens of thousands of dollars over list prices, and agents were bringing “flowers and candy” trying to get sellers to take their offers.

“I remember one property we were bidding on had 32 offers on it. How do you compete with that?”

Fahrny, 61, started picking up properties, too — for his retirement.

He couldn’t resist.

“When it all started, I said, ‘Look we’ve got to do this. If we don’t, we may be sorry.’ I said, ‘Sure it’s a crap shoot. It’s a roll of the dice. But if it all collapses, it won’t matter — we’ll all be in the same boat.’”

Fahrny snapped up 10 houses, investing more than $2 million. And the banks cheered him on.

“There was a frenzy on,” he says.

Locals were getting daily mass mail-outs from banks. Flyers coaxed customers to refinance, take money out of their homes and buy a car, go on vacation, buy another house.

“People we knew were buying three or four properties at a crack.”

Then the U.S. housing bubble burst, stocks and securities that were tied to the U.S. real estate market plummeted, and the global financial crisis exploded around the world.

The banks called Fahrny’s loans, just as they did for millions of others.

Fahrny was forced to sell all but two of his properties, suffering major losses.

Today he clings to his own home — a four-bedroom, three-bath north Vegas bungalow with a pool and spa — and a single rental. He’s not making payments on either.

“And so here we are today. I guess we’re all in the same boat now, aren’t we?”

To deter thieves from making off with appliances from vacant properties, banks now attach GPS-based homing devices to stoves and fridges.

That’s why realtor Spinogatti sends drivers out every morning at 6 to case the condition of the homes he’ll be bidding on that day, to ensure they haven’t been stripped overnight.

Fahrny says the thieves are often the displaced owners, “out for a little revenge.”

“We had one the other day, they took the kitchen cabinets and light fixtures.

“Last year we pulled up to another place — there weren’t even any doors on it.”

In February, President Barack Obama engineered a government-backed $26-billion deal with five of the nation’s biggest banks to help out current and former homeowners.

Modest debt reduction and the chance to refinance are supposed to ease the pain.

But people in Vegas never bought the February fix.

“It’s a drop in the bucket,” says Fahrny.

There is wisdom in his words. There are $800 billion worth of mortgages currently in arrears in America.

A report last month from The Federal Reserve Bank of Cleveland estimates that of 500,000 vacant homes in America today, one-quarter are so badly damaged they will have to be bulldozed.

“People are devastated,” says Fahrny. “There are some out here who are 65 or 70 years old, and they’re starting over.

“This country is never going to turn around until we solve this housing crisis. It’s not going away.”