At this past Friday's auction something interesting happened that hasn't happened for many months. A property that was being actively bid on wound up going back to a bank. It was bid above the judgment awarded, but Bank of America couldn't let it go. 

The property was 62 Roosevelt Street, Cresskill, NJ. The foreclosure judgement of $184,643.38 awarded to Woori America Bank, Successor by Merger to Hanvit America BankWoori America Bank, Successor by Merger to Hanvit America Bank. The winning bid at auction was $215,000 made by Bank of America N.A. Foreclosure Dept. NCA-105-02-63. That's about 16% above the judgment. The house was last sold in February, 1995 for $162,000, or 32% less than the winning bid.

Bank of America was one of the defendants in the lawsuit, as was the State of NJ. That indicates that Bank of America also held a lien on the property that was subordinate to the Worri America mortgage. The State of NJ could have been named for a variety of money owed to the state. Had Bank of America not bid for the property, the winning bid would have to have exceeded Woori America Bank's judgement, and possibly the amount owed to the state, by enough to cover what they would be willing to accept for the loan.

This is a case where the property was purchased more than 10 years ago, before the bubble, so the amount of the primary judgment was well below current market value. So that gives the junior lein holder an opportunity to recoup some or all of their money. It's the same situation that makes investors more likely to bid on a property. Other lien holders have a bigger incentive though. An investor at a foreclosure auction doesn't lose anything tangible if they fail to win the auction. All they lose is the potential to make money from the deal. A junior lien holder stands to lose the balance still owed on their loan. So they might bid more aggressively. They aren't necessarily bidding to win the property but they have to counter bid to where there are enough surplus funds (amount of winning bid over judgment) to satisfy some or all of the money owed on their loan.

One thing a junior lien holder can also do is purchase the superior lien before the auction. This might be a good situation to do something like that. Before the auction, they could buy the line for at or below the judgment from Woori. That way they hold both liens, and possibly got the first at a discount so even if they don't win the auction, they still are in a better shape. By the way, you can do the same thing yourself if you have the money to do so. I'll give some more details about how this works in another post and I'll provide a link here.

OK, off to the summary.

There were 18 properties scheduled for auction but only 7 were up for bid. One was sold to an investor and the other we discussed above.

81 Chestnut Street, Garfield, NJ 07026 had a winning bid of $228,000 by 81 Chestnut Land Trust , c/o Carolyn Blosio as Trustee. The judgment awarded to U.S. Bank National Association, as Trustee for Credit Suisse First Boston CSFB 2006-1 was $380,398.72 and the home last sold in 1994 for $116,000. The winning bid was 40% below the judgment. The Zestimate range as of today is $321,950 - $452,100.

Today, 19 properties were scheduled for auction and 11 appear to have been auctioned off. Two of which were sold.

94 Forest Place, Rochelle Park, NJ had a winning bid of $239,000 by ' 94 FOREST PLACE LLC, C/O CALVARY ASSET MANAGEMENT LLC'. The foreclosure judgment awarded to 'U.S. Bank National Association as Trustee for Credit Suisse First Boston CSFB 2006-1' was $376,954.99 and the house last sold in 2003 for $361,000. The winning bid was 36.60% below the judgment and 33.80% below the 2003 price.

414 Park Avenue, Leonia, NJ had a winning bid of $294,000 by PREMIER DEVELOPERS LLC. The winning bid was 172% more than the judgment. The home was last sold in 1998 for $211,000. The winning bid was 39.34% more than the 2001 price.

There were 25 properties scheduled for today's auction. Only 13 were auctioned off and only one was sold.

196 North 6th. St., Saddle Brook, NJ had a winning bid of $241,000 by 196 NORTH 6TH LAND TRUST, CAROLYN BLOISO TRUSTEE. The judgment was $318,713.49 and the property was last sold in October 2006 for $370,000. The winning bid was 24.38% below the foreclosure judgment and 34.86% below the 2006 bubble price.

A few months ago this property was listed for sale. The last price reduction was $319,000 but it didn't sell.

12 other properties went back to the lender. Two went to Fannie Mae 6 South Stoughton Place, Bergenfield, NJ and 52 Walton Avenue, Oakland, NJ.

Last Friday, 24 properties were scheduled for auction. Of which 7 didn't make it to auction, 13 went back to the banks and 4 were sold. All but one were sold below judgment.

20 Hazelton Street, Ridgefield Park, NJ had a winning bid of $256,000 by 20 HAZELTON LAND TRUST CAROLYN BLOISO. The foreclosure judgment awarded to Option One Mortgage Corporation was $409,064.52 and the last sale price on 6/29/2006 was $470,000. The winning bid was 45.53% below the bubble price and 37.42% below the judgment.

1265 15th Street 9c, Fort Lee, NJ, a 2 bedroom condominium in The Chartlon building had a winning bid of $360,000 by Samuel Farro. The foreclosure judgment awarded was $542,471.43. The property was last sold in 2000 for $275,000. Seems like there was quite a bit of equity withdrawal considering the appraised value was only $346,000. The winning bid was 33.64% less than the judgment and 30% more than the 2000 price. Also, about 4% more than the tax assessed value.

271 Lafayette Ave., Lyndhurst, NJ had a winning bid of $215,000 by 271 LAFAYETTE LAND TRUST ERIC VAN AUKEN. The plaintiff was 'HSBC Bank USA, National Association, As Trustee For The Asset-Backed Pass-Through Certificates Equity Loan Trust, Series 2006-FM2' and they were awarded a judgment of $190,840.51 on 6/20/2008. This wasn't purchased during the bubble and it doesn't appear like the owner cashed out his equity in the home. Unfortunately they might have had some other financial difficulties. The winning bid was 12.66% above the judgment. The tax assessed value is $370,100 and the winning bid was 41.91% below that.

2410 6th Street, Fort Lee, NJ a two family home had a winning bid of $631,000 by Felix Gorohovsky. The judgment on the property of $739,235.05 was awarded to 'Bank of New York As Trustee For The Certificateholders CWALT, Inc. Alternative Loan Trust 2005-27 Mortgage Pass-Through Certificates Series 2005-27' on 6/26/2008. The property was last sold in May of 2005 for $986,390.00. The winning bid was 14.64% below the judgment and 36.03% below the 2005 bubble price.

The trend continues where properties are going for a substantial discount in relation to judgments affected by the bubble.

Of the 30 properties listed for auction 20 went under the gavel and 3 were sold. The previous week, September 19th, 7 of the 14 properties scheduled for auction went back to the lender. No properties were succesfully won by a third party.

36 Yesler Way, Hillsdale - This property was won by RAUL MI`ER & RAU`L MI`ER with a bid of $218,000. The judgment amount was $321,267.05 and the 2005 sale price was $382,000. The winning bid represents 32% below the foreclosure judgment and 43% off the 2005 bubble price. The for U.S. Bank National Association As Trustee For Securitized Asset Backed Receivables LLC Trust 2006-WM1

6 Moore Place, North Arlington - This property was won by '6 MOORE PLACE LAND TRUST, CAROLYN BLOISO, AS TRUSTEE' for $204,000. The judgment was $286,262.18 and the hose was last sold in January, 2007 for $335,000. The winning bid represents 16% off the judgment and 39% off the 2007 price.

418 Main St Unit # A4, Fort Lee - This condo went to A. FOX AND COMPANY INC. with a winning bid of $175,000. The winning bid was about 12% over the judgment of $156,742.64 but 11% under the 2004 sale price of $197,500.

Of the 13 properties scheduled for auction at last Friday's Bergen County Sheriff's foreclosure auction, 8 properties were auctioned off, one of which was sold well below judgment and last sale price.

 40 14th Avenue, Elmwood Park, NJ - This property's winning bid was for $259,000 by Acadia Enterprises, LLC. Back in May Accadia Enterprises won another property in Teaneck at the sheriff's auction for almost 34% off the foreclosure judgment. The Elmwood Park property had a foreclosure judgment of $394,535.26 according to the Sheriff's website (see below) and was last sold on 10/13/2005 for $460,000. The winning bid was 34.35% below the foreclosure judgment and 43.69% below the 2005 price.

This property was originally scheduled for auction on July 18th. There were 2 judgments against this property. The strange thing is that second judgment was entered against Kenneth T. Majka. Et Al, who is not identified as the owner of the property according to the tax records I saw. This appears to be the superior lien as the plaintiff, Deutsche Bank National Trust Company As Trustee Under The Pooling and Servicing Agreement Series Rast 2006-A8, indicates they have an indemnification letter for two previous judgments, DJ-025862-1992 and DJ-263617-2003.

This judgment was in the amount of $702,026.57. If this was the judgment the winning bid was against it would be 63.1% below the foreclosure judgment. Or the winning bidder purchased a junior lien and may not be able to take possession of the property. It's hard to say with the information I have access to.