Want to bid on a delinquent loan? Wednesday, $35,000 did the trick.

That's what happened in a rather unusual Plainview auction. A $985,000 debt in Lawrence, and another one in Brooklyn -- not the properties themselves -- were among the usual foreclosures and bankruptcy assets on the block.

"It was a private lender who needed to clean up their books, and this was the most efficient way to do it," said auctioneer Rich Maltz of the family's Maltz Auctions in Plainview.

A few bids back and forth and contractor John Haran of Long Beach found himself the new holder of the $985,000 debt on a Lawrence house, which is filled with garbage. Nobody seems to live there, and if Haran has his way, he'll have paid a small price on a property with an estimated deflated worth now of more than $300,000.

"I just have to foreclose if I can't do a deal with them," he said of the borrowers, who bought the home in 2006.

The buying and selling of individual mortgage notes is quickly becoming the hottest, "secret" investment for people in the know, said those in mortgage circles.

As financial firms and lenders pursue liquidity by quickly unloading loans in default, websites and related services have cropped up as a sort of broker, showing loans by state, price and more.

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For the public this has opened up an investment arena long out of reach because lenders were selling hundreds of millions of dollars of mortgages at a time, too rich for the mom and pop investor.

At the 18-month-old LoanMarket.net, founder Jeff Freud said about 200 loans sell per month, and 20 percent of buyers are small investors. "You're getting a Bernie Madoff yield where you get to do all the due diligence and pick it out yourself," Freud said. "People want to take control of their retirement and their personal assets."

Loan notes for sale aren't all in default, and supporters of this emerging market said the yield is often at least 7 percent.

At several online businesses, buyers register and put money in escrow. The listings show debt, appraisals and sometimes the borrower's situations.

As on eBay, lenders can keep a loan listed until they see a price they like. After loan note buyers get deals, they can foreclose on the borrower or modify the loan more easily than banks, which have racked up legal fees and are limited by rules.

But several Maltz auction attendees said there were too many risks and questions, from servicing the loan to evicting people. If the lender couldn't collect, retiree David King of Brooklyn said, a general buyer would have it "twice as hard."

At Orange, Calif.-based Kondaur Capital Corp., where 99 percent of buyers are small investors, founder Jon Daurio expects these kinds of individual sales to increase in New York State, where the foreclosure process can take more than two years.

Some firms can't afford to put aside the required reserve capital for every foreclosure, so selling loan notes can be appealing, he said.