Because of the holidays, it seems that many foreclosure auctions in Bergen County were pushed back, with only a little more than 100 auctions scheduled for November and December 2008 combined.

About the same as the number of Sheriff Sales scheduled for October 2008 alone, which was the highest month for 2008.

But the homeowners facing foreclosure didn't get a Christmas miracle, their auction dates were just pushed back into 2009. As you can see from the current snapshot of scheduled foreclosure auctions, 2009 doesn't look good. There are currently over 300 foreclosure auctions scheduled for January.

This number is likely to decrease as auctions are rescheduled into later months for various reasons including postponements, cancellations and I wouldn't be surprised if the sheer volume might be too much to handle in one month.

 Higher priced neighborhoods aren't immune to foreclosures. Upper Saddle River has 8 properties scheduled for auction in the first 3 months of 2008 while it only had 3 for the last quarter of 2008.

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.

There were 28 properties scheduled for last Friday's Sheriff foreclosure auction, 11 went to auction and 4 were sold. Two for less than the judgement.

2 Valley Lane, Upper Saddle River, NJ had a winning bid of $504,000 by Matthew LLC. The foreclosure judgment awarded to Avelo Mortgage, LLC was $712,596.15 and the home was last sold in September 2006 for $1,160,000. The winning bid was 29.28% below the foreclosure judgment and 56.55% below the bubble price. It looks like the last assessment in Upper Saddle River was in 2002. The current tax assessors value of the property is $661,300 and the winning bid was 23.79% below the assessed value.

88 Woodcrest Drive, Woodcliff Lake, NJ had a winning bid of $650,000 by Daniel Silva. The foreclosure judgment awarded to CSB Realty Corp. was $413,520.04 and the home was last sold in 1990 for $510,000. The winning bid was 57% more than the foreclosure judgment and 27% more than the 1990 price. Not much appreciation for nearly 20 years compared to what was happening during the bubble.

60 Herzog Place, Englewood, NJ had a winning bid of $12,000 by 60 Herzog Land Trust, Carolyn Bloiso as Trustee. The judgment awarded to LT Asset Recovery LCC was $9,583.07 and the home was last sold in 1998 for $155,000. This doesn't seem to be a mortgage related judgment but some other debt that was being collected through a foreclosure proceeding. If that's the case, the other liens will need to be worked out and since the winning bidder has picked up foreclosures at auction in the past we can assume that she's done her homework and worked things out with the other lienholders in the event she won the auction.

554 Terrace Avenue, Hasbrouck Heights, NJ had a winning bid of $256,000 by 554 Land Trust, Carolyn Bloiso as Trustee. The judgment awarded to U.S. Bank National Association, as Trustee for Mastr Asset Backed Securities Trust 2005-AB1 was $351,441.24 and the home was last sold in August of 2005 for $425,000. The winning bid was 27.16% below the foreclosure judgment and 39.76% below the bubble price.

Sushil Cheema writes today on his WSJ blog how foreclosure auctions are "slow to unload inventory". A video of an auction is also included.

Few people placed bids at a recent auction run by the Sheriff’s office in New Jersey’s Bergen County. “If you want to go back a few years ago, it was standing room only,” said Don Pfleger, a real estate broker who said he has bought about a dozen properties at auction over the past several years. “Now it’s getting thinner as the weeks go on, as more and more properties are up for sale.” On this day at the end of September, only three of the 23 properties on the block went to a bidder. The remaining 20 went back to the banks. Eric Van Auken, a real estate broker who runs the Sheriff Sales Online site, has attended the auction in Bergen County weekly for the past 10 years. Up until the recent housing downturn began, he would personally buy properties at auction to fix up and would sell about one a month. But he’s purchasing foreclosed homes less frequently since the current real estate market downturn began because of the “ridiculous values” banks are demanding for them, Mr. Van Auken said. “We didn’t want to pay what they were willing to let them go for.”

According to Bergen County Sheriff Leo McGuire, commision revenues this year look to be about $1 million less than last year.

Of the past 370 properties listed for foreclosure auction, only about half made it to auction. Of those, only about 26 were sold and over 160 went back to the banks. Only 5 were sold at or above judgment. The median winning bid is 26% below judgment. A couple have gone for around 55% below judgment. Looking at totals, the winning bids total is about 30% below total judgments of sold properties.

There are probably a few reasons for fewer sales. People that purchase properties at foreclosure auctions are generally investors. They need to get a property at enough of a discount to be able to sell at a profit. With real estate values dropping and high inventory causing listings to stay on market longer, investors need to purchase properties low enough to account for declines as they try and sell. Couple this with the high loan to value ratios of bubble-era mortgages and lenders will need to let properties go for a lot less than they are willing to now.

Credit has also tightened. During the bubble, you didn't need to have the cash to purchase a property. People were able to get financing after putting the 20% winning bid deposit and get financing for the remainder within the 30 day window. Now, as it was in the past, cash is king.

Is it possible the bailout programs are looking so good that banks are willing to take posession of properties?

There is so much uncertainty in the real estate market and a lot of risks involved with purchasing a foreclosure but investors are still showing up, but not willing to pay what the banks want. 

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.