Bergen County Foreclosures Blog and Listings

Week of November 29, 2010 Foreclosure Auction Sales

Tom — Mon, 6 Dec 2010 15:12:41 -0500

A number of properties were sold last week at Sheriff Sale foreclosure auctions. All of them well below the judgment price.

31 B South Maple Ave, Park Ridge NJ - had a winning bid of $57,600, much less than the $184,874.05 judgment awarded to Wachovia Bank. The 1,449 sq ft condo last sold in 2008 for $345,000.

104 Munn Ave, Teaneck, NJ - received a winning bid of $193,000. The 1,146 sq ft home sits on a 4,000 sq ft lot. It was last sold in 2005 for $350,000. Zillow estimates the value at around $277k. The foreclosure judgment was for $314,210.60.

81-83 Brook St, Bergenfield NJ - received a winning bid of $226,000. About half of the $459,462.56 foreclosure judgment awarded to IndyMac. This 1810 sq ft two-family home sits on a 4560 sq ft lot at the end of a dead end street and was last sold for $425k in 2004.

130 Wallace St, Red Bank NJ - received a winning bid of $242,000, about 58% of the $418,935.81 foreclosure judgment awarded to CitiMortgage. The 1,652 sq ft home built in 1925 sits on a 18k sq ft log and was last sold in 2007 for $427k.

What is Quantitative Easing :

Tom — Sat, 13 Nov 2010 11:34:03 -0500

Somehow hearing Quantitative Easing explained by cute cuddly cartoon characters doesn't seem so bad.

Very good work by malekanoms regarding QE and related issues.

See the video below.

River Vale Buys a Foreclosed Country Club

Tom — Wed, 10 Nov 2010 22:07:21 -0500

Did you see the foreclosure listing for 660 Rivervale Rd, River Vale, NJ and think to yourself "hey! I have $6.6 million laying around I think I'll pick myself up a country club at the Sheriff Auction!"

Well if you did, you're too late. The township of River Vale purchased the River Vale Country Club yesterday for $17.5 million in municipal bonds.

Last July the deal almost closed for $16.95 million but the owner, Kwang Ho Keh backed out of the deal. Then in September River Vale filed papers to claim the property under eminent domain.

Keh's company Chemitek 2006 LLC purchased the property in 2006 for $22 million planning to build housing on parts of the country club but that never happened due to permit disputes and lack of financing.

From NorthJersey.com:

“I really believe this is a watershed moment,” said River Vale Mayor Joseph Blundo. The township hopes to eventually turn a profit from the club while also protecting the course from further development.
A management company that the receiver hired to run the club will remain in place until at least January, when the township will conduct a competitive bidding process to hire a new management firm that will hire and fire employees, keep track of membership roles, and maintain the 99-acre club’s greens.
Now that the golf course will be municipally-owned, the town will forfeit more than $400,000 yearly in property taxes, but township officials say that that money will be more than made up in revenues from the course. The township will also be paying an untold amount yearly in bond payments related to the sale’s financing.

The township will now target an adjacent lot, known as the Mesker site, for a small-scale development, leaving the course, built in 1939, intact.

Consequences for Using Robo Signers May Be Coming

Tom — Tue, 9 Nov 2010 09:00:44 -0500

The Ohio Attorney General and a Cleveland Judge are taking a stand against robo signers. The issue started when James Renfro's home was being foreclosed by Ally Financial Inc.'s GMAC Mortgage unit. Two affidavits submitted in Renfro's foreclosure case were signed by "Jeffery Stephan a GMAC employee who said in sworn depositions in Florida and Maine that he hadn't read thousands of affidavits he'd signed."

Ohio AG Richard Cordray asked Cuyahoga County Court of Common Pleas Judge Nancy Russo to not let GMAC off easy by allowing them to simply submit new documents without consequences. Cordray also indicated "This is just the first".

The judge in Cleveland set an accelerated schedule on Monday for evidence-gathering in the case, leading up to a Feb. 17 hearing on the integrity of the loan documents. Cordray's office plans to file a motion today asking to take part in the case and participate in so-called discovery.

Perjury by False Affidavit is a crime. A felony in fact. All these robo signers and the lenders and attorneys that knew what they were doing were committing a crime.

Perjury in civil cases seems to rarely be enforced but there are instances where it has. The local District Attorney would have to choose to prosecute.

I wonder if the Judge can also issue a contempt of court order? Knowingly submitting thousands of false affidavits seems like an attempt to impede the court's duties to this non legal expert.

The effect of this action in Ohio could have broad implications. Yesterday I posted how State Bank Regulators were denied help from the Office of the Comptroller of Currency when they wanted to look into the foreclosure operations of some of the largest banks. The State's inquiries could have exposed robo signer's three years ago.

State regulators and the OCC, which regulates national banks, frequently butt heads over jurisdiction. Unfortunately the OCC has prevailed when the States have tried to intervened. If the OCC didn't intervene on behalf of the banks back in the early part of the century we might not have a predatory lending or subprime problems in NJ.

If the State regulators work with their respective AG's or DA's, it's possible they can regain some control over what banks are allowed to do in their States by prosecuting lenders and other parties for the crimes they committed. The OCC can't overrule AG's and DA's.

This type of pressure can persuade mortgage servicers to work on modifying loans instead of pushing them to go to foreclosure. Servicers are just the middlemen between borrowers and investors. Because the housing bubble finally burst and house values decreased significantly it's often better for the investors if the borrower makes lower payments rather than foreclosing. From More on the Mortgage Mess:

Take, for example, underwater borrowers — the millions of Americans who owe more on their loans than their homes are worth. For them, the best modification is often to reduce the loan’s principal balance, lowering the monthly payment and restoring some equity. That could be best for investors too, because even reduced payments are often better than a foreclosure sale. A bank’s servicing fee is based on the principal balances of the loan — a strong incentive not to reduce a troubled borrower’s balance.

Thanks to Mike Konczal's post which helped me find that article.

Should State Regulators Have More Power Over Banks

Tom — Mon, 8 Nov 2010 10:02:26 -0500

Could this whole housing bubble including the nationwide foreclosure mess have been avoided or at least been arrested before things got so out of hand?

According to the article Regulators flawed in foreclosure oversight published in The Washing Post this morning, three years ago some state bank regulators were concerned that some of their residents were losing their homes unnecessarily and "asked the biggest national banks for details about their foreclosure operations."

Two banks, J.P. Morgan Chase and Wells Fargo refused to cooperate and the state regulators asked The Office of the Comptroller of Currency to intervene. John Dugan, the comptroller at the time, refused because they were planning on collecting their own foreclosure information and thought that the states' inquiries risked "confusing matters". The Office of the Comptroller of Currency then "chose itself not to scrutinize the foreclosure operations of the largest national banks, forgoing any examination of their procedures and paperwork. Instead, the agency relied on the banks' in-house assessments. These provided no hint of the problems to come until they had tripped the nation's housing market, agency officials later acknowledged."

Why are robo signers suddenly big news?

For some reason robo signers have become big news back in October of this year. I personally don't understand why this is big news all of a sudden. Lenders rubber stamped loans without proper review causing the bubble, why would anyone expect them to behave differently when foreclosing?

The way mortgages were split up and securitized and the poor records keeping of the lending industry made it difficult in some instances for the lenders to prove they still owned the mortgages and had the right to foreclose.

Before going to court lenders are supposed to verify certain information about the property and mortgage. You know, simple things like they property location, owner, that the borrower is actually in default and oh yeah, that they actually own the note and have a right to foreclose.

But lenders were lax with their reviews and for years attorneys used this to help stay a foreclosure and gain leverage in negotiating a way to clear the complaint.

Back in 2008 Enrie Harpster in Florida was able to delay his foreclosure for nearly a year by forcing his lender to prove their case.

"About 80 percent of foreclosure lawsuits don't contain the original mortgage note - the proof that the lender has a right to foreclose, lawyers said. This is because mortgages often were sold in bundles to investors during the housing boom. The notes were sometimes misplaced."

There were numerous instances even before this including a class action suit in Boston. Why is this news all of a sudden?

"Based on what we were seeing and what we were concerned about, it felt like a chronic underreaction at the federal level," said John Ryan, a senior official with the Conference of State Bank Supervisors
Even when the mortgage industry itself identified possible flaws in foreclosure paperwork, the agency was slow to act. In September, Ally Financial suspended foreclosures after discovering problems with tens of thousands of cases. But even then, the OCC did not begin to examine the operations of other major banks. Instead, the agency asked them to undertake internal reviews and told them it would conduct its own examination later, an OCC official said.

If the states were allowed to inspect the lender's foreclosure processes would it be possible that robo signers wouldn't be a hot topic?

Even worse, was John Dugan (a former bank lobbyist) and the Office of the Comptroller of Currency conspiring with the banking industry because they all knew that there were problems with the bank's foreclosures and didn't want to hold up bank ability to repossess property or was he just negligent in his duties?

This isn't the first time the OCC has intervened on behalf of banks when states tried to stem their local foreclosure problems.

Back in Aug '08 I wrote an article about how states tried to stem predatory lending as early as 2002. New Jersey was one of the states that tried to prevent the sub-prime mortgage crisis when it enacted the New Jersey Home Ownership Security Act of 2002.

Abusive mortgage lending has become an increasing problem in this State, exacerbating the loss of equity in homes and causing an increase in the number of foreclosures in recent years. One of the most common forms of abusive lending is the making of loans that are equity-based, rather than income-based. The financing of points and fees in these loans provides immediate income to the originator and encourages the repeated refinancing of home loans. The lender's ability to sell loans reduces the incentive to ensure that the homeowner can afford the payments of the loan. As long as there is sufficient equity in the home, an abusive lender benefits even if the borrower is unable to make the payments and is forced to refinance. In addition, the financing of high points and fees causes the loss of precious equity in each refinancing and often leads to foreclosure.

It basically says lenders were flipping mortgages to earn fees and since they could easily sell mortgages to the secondary market it didn't matter to them if the borrower could pay or not because the bank gets paid with fees and from selling the loan, not when the borrower makes monthly payments.

In response to these regulations the rating agencies implemented policies that made it difficult to pool loans that originated in these states. This is bad for the secondary mortgage market but it's good for the housing market because it would force lenders to be more selective of who they lent money too since they couldn't sell any piece of paper to the secondary market.

Unfortunately all the State's actions were nullified when the Office of the Comptroller of Currency issued regulations in 2004. There was a press release issued by the OCC where then Comptroller of the OCC John D. Hawk Jr. indicated in a speech at a lunch hosted by the Federalist Society on July 24, 2003 that the OCC would overrule the State laws but that press release is now missing from the OCC site.

A portion of that speech is available on Mike Konczal's blog post CFPA I, Preeption, or What A Bad CFPA Would Look Like.

The OCC will, of course, continue to defend the right of national banks to be free from state efforts to regulate their business…

The GFLA [Georgia Fair Lending Act] imposes severe restrictions on so-called “high-cost” mortgage loans, requiring lenders who offer them to comply with a range of substantive and procedural requirements. The practices proscribed under the Georgia law include the financing of credit insurance, debt cancellation or suspension coverage, limitations on late fees and payoff statement fees, pre-payment penalties, negative amortization, increases in interest rates after default, and balloon payments. Certain categories of loans are restricted as to the number of times they could be refinanced and the circumstances under which a refinancing could occur.

I thought the OCC was supposed to regulate banks, not stand up for them? They haven't been doing a very good job even when addressed with concerns from State regulators.

The States are the ones most affected by foreclosures. They have to deal with the impact to their local economy as well as the cost to handle all these foreclosure cases and auctions. Shouldn't the states have more authority especially considering what a poor job the OCC has done?

Week of October 25 Auction Results

Tom — Mon, 1 Nov 2010 13:10:25 -0400

It's been a while since I've posted an auction results report, ever since I added the functionality to view previous auctions on the site but it's been a while since I blogged anything so here are 4 properties that sold at Sheriff Sales last week.

Many of the properties auctioned recently have been going for less than the judgment amount awarded to the forclosing bank. Sometimes well below as the case of one of the properties in Wayne below.

After reading about these properties you can visit the rest of the site to view properties that haven't been auctioned yet.

222 Coolidge Ave, Hasbrouck Hights, NJ (Bergen County)

This 1,240 sq ft home sits on a 5,000 sq ft lot. It had a judgment of $327,613.51 and received a winning bid of $253,000 from Nahum Meir. That's 77% of the judgment awarded to Flagstar Bank, FSB. Comparable homes in the area have sold for just under $300,000.

7 Risa Benjamin Way, Freehold, NJ (Monmouth County)

This 6 year old home is 5,542 sq ft and sits on a 2.3 acre (over 100k sq ft) lot surrounded by other recently built large homes on large lots. At it's peak the valuation on this property was $1.7 Million. The winning bid at the Monmouth County Sheriff's Sale was far less. Only $478k, 72% less than the $664k judgment.

The property's value took a big dive after the housing bubble burst and hit a low of around $450k in 2008 but has rebounded a bit to around $840k.

61 MacDonald Drive, Wayne, NJ (Passaic County)

This 3,089 sq ft home sits on a half acre lot. In 2006 it sold for $950k. In the past few months it's been on the market listed between $499k-$600k. Last week the winning bid by Value Realty was only $395,100, 46% of the $867k judgment. That's about what the house sold for in 2001.

180 Oldham Road, Wayne, NJ (Passaic County)

This 1,404 sq ft ranch home sits on a 0.439 acre property. It received a winning bid of $151,000. The judgment was only $43,208.38. Similar homes in the area have been selling for $400k and up.

Centuria Project Up For Auction?

Tom — Sat, 7 Feb 2009 00:01:43 -0500

I've been busy improving the site and I can't believe I missed this listing yesterday. A notice of sale was issued for a property in Fort Lee, NJ with a judgment of $31,342,684.70. The address of the property is a fairly non descript "Vacant Land Along Lemoine Ave."

I won't be able to verify it until Monday, but the only property I can think of that it could possibly be is the 16 acre plot of land near the George Washington Bridge on Lemoine Ave in Fort Lee that was supposed to be the future home of the Centuria Project.

Update: It is indeed the Centuria Project that is being foreclosed. The plaintiff in the case is TDC Fort Lee, LCC which I believe is a company set up by Tucker Development Corp to invest in the project. Tucker Development corporation is a commercial real estate firm from Chicago, IL that was going to invest up to $1.5 billion in the Centuria Project. In May 2008, they put out a press release that they purchased a $29 million loan from an affiliate of Principal Financial that was secured by a portion of the development. That's probably the loan in question that is being foreclosed on. The property came up again this time with a $60 million dollar judgment. There was a winning bid of $1,000,100 by Fort Lee Lemoine Avenue Acquisitions, LLC.

The Centuria Project was supposed to be a mixed use development that would build over 1.7 million square feet of residential, retail, office and hotel space in downtown Fort Lee. For over 35 years, the property has been vacant and the project was an important part of Fort Lee's redevelopment plans.

Since 2003, the only thing that ever developed on the site was a fence and a sales office. Town & Country ran into problems early on with contaminated soil from a previous dry cleaning business on the site. Before the foundation could even be dug, the tigtening credit markets made find financing for such a project difficult, if not impossible.

Driving through Fort Lee, you see many signs for vacant storefronts and office space. The slowing residential market and current abbundance of luxury highrises probably made the project seem unviable.

Back in May 2008, Town & Country Developers announced they had engaged the services of Cushman & Wakefield's Metropolitan Area Capital Markets Group to sell the project for $1 billion. According to the various news articles on the project, Town & Country had secured around $80 million in financing for the project. If this foreclosure takes precedent over the other loans secured by the property, it could be a great deal for the next developer but bad news for the other lenders.

In June 2008, Town & Country was stripped of it's rights to develop the property it bought for $45 million in 2003, because it was behind $878,000 in taxes and fees. Town & Country seemed to also have another agreement with the Borough of Fort Lee to be the approved redeveloper for the Borough, and that status was also going to be revoked. At the same time, one of Town & Country's lenders began foreclosure proceedings in which the Borough of Fort Lee was also a named defendant. That's likely the loan associated with this notice of sale.

The property has quite a history. It used to have one and two family homes that were built after World War I and some stores and a movie theater along Lemoine Ave. Most development proposals since included a movie theater. With Fort Lee's rich history in film making, it's very strange for the Borough not to have a movie theater.

Investors Funding Corporation started buying up and demolishing all the properties in the 70's. They ran into problems when serveral officers of Investors Funding were convicted of attempting to bribe the Mayor of Fort Lee in order to obtain the approvals necessary to build the proposed project.

In 1980, Harry B. Helmsley started looking to acquire the property and after purchasing it proposed a mixed residential/office project in 1985 which was never built. By 1990, Helmsley had received approval from the town, but not from the county.

Quite a troubled history for a project considered to be one of the prime commercial real estate plots in the north east.

Monmouth County and Morris County Foreclosures

Tom — Thu, 5 Feb 2009 15:38:20 -0500

This week, 2 additional NJ Counties were added to the site. You can now find Morris County foreclosures and Monmouth County foreclosures on this site.

Adding more counties has been the most frequent request I've received so I'll do what I can to in that regard. To access other counties, use the drop down menu in the header of the site. Put your mouse over the white county box and it will drop down to show a list of counties. Click on the county you are interested in. The following screen shot illustrates how to do this. (currently this menu is not on the blog so click the logo to get to the home page)

Once you select a county, you will go to the county page, which shows overview information and statistics about the foreclosure auctions in that county. There are charts that show the top 10 cities by foreclosure auction activity in that county, number of foreclosures and average foreclosure judgment for the past few months as well as average winning bids and the average judgment of homes sold at foreclosure auction. You'll also see number of current foreclosure auctions scheduled and when the next foreclosure auction is scheduled.

To see foreclosure listings, select the municipality (city) from the Municipality drop down list. Only municipalites for that county will be displayed. Or you can use the link at the bottom of the page.

The interface for viewing foreclosure home listings is the same interface you know and (hopefully?) love from viewing Bergen County foreclosures on this site.

There were some other enhancements to the site that should improve performance. Some of you were having a problem where the table of foreclosure listings was not being populated unless you reloaded the page. That should now be fixed as well.

If you have any feedback on the changes or thoughts please leave a comment on this blog post or use the Contact form on the top menu.

If you're looking for other NJ foreclosures use the page for US Foreclosures & REOs. The listings are provided by a third party. To get detailed listing information you need to sign up but they have a free trial period.

January 23, 2009 Sheriff Auction Sales

Tom — Mon, 26 Jan 2009 12:06:16 -0500

Click here for current Bergen County Sheriff Sale listings as well as sheriff listings for other counties such as Monmouth, Middlesex, and Passaic.

Twelve properties had been scheduled for last Friday's foreclosure auction in Bergen County. Of the 8 that seemed to be auctioned off, only 2 were sold. Both were sold to an investor that also had the winning bid on 2 foreclosures in the previous auction.

8 Orchard Ct, Lodi, NJ - had a winning bid of $337,500 by John Gloria, which was 25.73% below the foreclosure judgment of $454,428.03. The home was last sold in December 2005 for $515,000. The winning bid was 34% less than the bubble price. From 2004 to 2005, this house was sold 3 times for $424k, $467k and finally $515k. Not sure if people were going crazy flipping this house of if there were issues because of the odd shaped lot that backs up to an apartment building and a commercial business.

804 Grand Ave, Leonia, NJ - had a winning bid of $174,000 also by John Gloria. The winning bid was 65.94% below the foreclosure judgment of $510,854,59. The house changed hands twice during the bubble. Selling for $370k in 2004 and $580k in 2006. The winning bid was 70% below the 2006 price. I think that's the biggest drop we've seen in Bergen County.

Deutsche Bank had 3 properties at auction that didn't sell, one property appears to have gone back to the cond association and one went to HUD.

January 16, 2009 Sheriff Auction Sales

Tom — Tue, 20 Jan 2009 17:04:05 -0500

28 properties were scheduled for last Friday's foreclosure auction, 3 were sold out of the 10 that were put on auction. Two were sold below the awarded foreclosure judgment.

67 Willow Ave, Hackensack, NJ - had a winning bid of $235,00 from John Gloria. The house was last sold in 2006 for $455,000. The winning bid was 39% less than the foreclosure judgment of $384,445.57 and over 50% below the 2006 bubble price. It looks like the home was picked up by an investor in 2005 for $285,000 and flipped a a few months later for 60% more than paid for it.

68 Cresskill Ave, Dumont, NJ - had a winning bid of $260,000, also from John Gloria. The house was last sold in 2005 for $364,500. The winning bid was 19% below the foreclosure judgement of $320,037.94 and about 29% below the bubble price.

549 Howard St, Washington Twp, NJ - took a while to get to auction. The foreclosure judgment on the property was awarded almost a full year ago. The winning bid of $355,00 by East Coast Acquisitions, LLC was 53% above the foreclosure judgment of $231,752.59 awarded to US Bank NA in January 2008. This house was last purchased before the bubble for a price of $284,900 back in November 1993.

January 9, 2009 Sheriff Auction Sales

Tom — Fri, 16 Jan 2009 05:11:12 -0500

The first auction of the year had 42 properties scheduled, 22 weren't auctioned off, 18 didn't receive bids and 2 were sold.

555 Kipp St., Teaneck, NJ - had a winning bid of $239,000 by Eric Van Auken. The property was last sold in September 2006 for $420,000. That's a 43% discount compared to the bubble price. The judgment awarded was $381,124.65 and the winning bid was about 15% less than that.

2 Valley Lane, Upper Saddle River, NJ - had a winning bid of $510,100 by James Vercelli. That's about 28% off the foreclosure judgment of $712,596.15 awrded to Avelo Mortgage, LLC. The home was also last sold in September 2006 for $$1,160,000. That's 56% below the bubble price.

The strange thing about the Upper Saddle River property is that it was previously auctioned off before and I mentioned it in the November 7 auction report. Back then it had a winning bid of $504,000 by Matthew LLC.

One Million Homes Lost To Foreclosure Last Year

Tom — Thu, 15 Jan 2009 09:21:48 -0500

BusinessWeek is reporting that foreclosure.com released data that 1 million homes were lost through foreclosure in 2008. Up 63% compared to 2007.

President of Foreclosures.com, Alexis McGee, believes that the worst is behind us. I'm not sure that this is the case. While home prices have fallen a bit, and interest rates are low, house prices are still overpriced compared to incomes and many Americans are dealing with losing their jobs or seeing their income decline.

While the bailout has helped some banks cover their loses, it hasn't opened up lending much. Especially for those looking to refianance out of problem mortgages.

So far, the programs aimed to help homeowners in foreclosure haven't had much success.

RealtyTrac, another company that tracks nationwide foreclosure information, reported slightly different numbers.

U.S. foreclosure activity jumped 81 percent in 2008, with one in every 54 households getting at least one filing notice, suggesting various state laws and private programs to slow the process have been ineffective, RealtyTrac reported on Thursday.

Nearly 3.2 million foreclosure filings on 2.3 million properties were made last year, the Irvine, California-based research firm said. Filings include notice of default, auction sale or bank repossession.

While foreclosure activity did slow in the 4th quarter, it was still up 40% from the 4th quarter of 2007. If other parts of the country are similar to what happened here in Bergen County, many foreclosures were likely postponed due to the holidays. Hundreds of foreclosures that were scheduled to be auctioned off in November and December were pushed back to January 2009.

Incorporating your Foreclosure Investments and DIY Real Estate Forms

Tom — Mon, 12 Jan 2009 07:24:09 -0500

You can save a lot of money by selling your home yourself (for sale by owner) or buying a home without the aid of a real estate agent. Here in NJ, real estate agent commissions are usually negotiated to around 4-6%. If you're selling a house priced at $450,000 that's $22,500 which is not an insignificant amount of money, especially considering the current housing market might have left you in a position where you might actually take a loss on selling your home.

The housing boom drew a lot of people into the real estate market, including many real estate agents that distorted the facts or didn't have much experience or knowledge, but were able to be successful because houses were so easy to sell. These days, selling houses is tough business. Even if you have a really good agent, you're still going to have to do a lot of work yourself. Why not do a little more, if you can, and save a lot of money?

With so many distressed sellers, foreclosures and high inventory, buyers know they can find deals. This is one way you can present a more attractive price to buyers without sacrificing your profits.

If, like many of this site's visitors, you're interested in foreclosure investing, you know it requires you to do a lot of work on your own. You don't have or need a a real estate agent in many cases and the following recommendations can help make things easier for you.

If you can do the work to research and purchase foreclosures, you know enough to handle most types of real estate transactions yourself. You may still want to use a real estate agent if you have a lot of properties or if you need exposure when you try and rent or sell a property. It's up to you, but you never know when someone might hear that you have a good deal and it's good to be prepared.

A real estate attorney is probably more important when buying and selling, but most of what they do is create boilerplate legal forms. If you have a bit of knowledge and experience you can use stock real estate forms that you can purchase online for most transactions.

This isn't for everyone, but the pace of the real estate market has slowed down. You may decide to still go with an agent or attorney but you have an opportunity to take the time to investigate other options and see if you're comfortable with them. The information contained in some of the kits will also help you choose agents and attorneys as well as educate you so that you understand what's going on better.

If you're starting a foreclosure investing business, you'll likely also want to set up a an LLC or S-Corporation to protect your personal assets in case your run into any issues with your real estate business. Even if you're purchasing just a single property as your residence, you may want to incorporate to limit liabilities. There are many things that can go wrong with buying foreclosures that you should consider protecting yourself. You can hire an attorney or CPA to do this for you, you can use an online service or you can register your business yourself.

In this post I'll cover different options for forming your business entity and links to resources that provide forms you can use in your real estate transactions, including real estate purchases, sales and leases.

Form an LLC or S-Corp

Incorporating your business provides you with some liability protection to guard your personal assets. You can create one business entity for your entire business or form a separate one for each property. You might have noticed in the foreclosure sales results that some of the buyers are LLC's with the address of the property in the name of the LLC.

By creating a new corporation for each property, you can also insulate liabilities from one property affecting others. This may also be necessary in some instances. Some foreclosure investors don't do it all themselves. They have financial backers/partners that may change with each property. Since one property may have different investors than the next, it makes sense to have different corporations.

Filing the paperwork is pretty simple and in NJ you can form your business online. You'll also need to register your business with the IRS and in some case you may need a Federal Employer Identification Number (FEIN). All of these are relatively cheap and easy to get. The hard part is creating the documents you need to file along with your application, such as your articles of incorporation. Using an online service or a kit, will help speed things up by creating these documents for you. They will even file some or all of them on your behalf. At the very least, I would recommend you pick up the Incorporation/LLC Kit from Socrates Media. It will provide you with information on choosing and setting up the right entity as well as the forms and instructions. You pay a bit for the service but it saves you a lot of time and it is cheaper than going with a lawyer or CPA.

The first thing you'll want to do is set up a legal business entity. Either an Type-S Corporation or an LLC. An LLC is easier to manage but an S-Corp does have it's own advantages. Both will provide liability protection for your private assets. Which one is right for your business will need to be determined and you might want to consult a CPA for advice if you don't feel comfortable doing it yourself. Though the information in the resources provided below can also help answer many questions you might have.

The biggest advantage to an S-Corporation is in the treatment of taxes. With an LLC you pay self-employment taxes on your total net income while with an S-Corp you only pay the 15.3% employment tax on salaries that were actually distributed.

For example. Your business has net income of $100,000. If you were an LLC you would pay $15,300 in employment tax. If you were an S-Corp and you decided to only pay yourself a salary of $50,000 and keep the rest in the business, you would only pay employment tax on the $50,000 which would be $7,650.

S-Corporations are more complicated to set up and you are required to file more documentation to maintain them. This can be too much for some, but if you're dealing in real estate you're likely dealing with large amounts of money and at some point you might want to hire a CPA to help you manage it after you get things running along with taking care of your taxes.

An LLC is easier to maintain and cheaper to set-up. An owner of an LLC pays his corporate taxes by submitting the same 1040 Schedule C form he would if he was just a sole-proprietor. Running as a sole-proprietor tough doesn't give you the protections of an LLC though.

Separate Your Business and Personal Funds

As with any business, you should have a clear distinction between your personal funds and your business funds.

To accomplish this, Set up at least a business checking account in the name of your business. Keep detailed records of any money you transfer between your personal and business accounts and label them appropriately if they're salaries, bonuses, loans, etc.

If you are doing you're own accounting, a good software accounting program can help make this easier for you. Quicken Home & Business provides enough for most personal and business accounts. You may also want to look into Quicken Online Edition which is available for free. At some point you might need a little more power in your bookkeeping software and you should consider QuickBooks Premier Edition , especially if you start hiring employees.

You'll likely also want to secure lines of credit or credit cards under the business name to make it easier to track business expenses. Since your personal credit can affect your business credit, I recommend you check your Fico Scores/Credit Reports.

Real Estate Forms

A lot of the legal forms concerning real estate are fairly standard. It's nice to have an attorney review and prepare documents, but it's not always necessary. Most attorneys will reuse the same forms for their transactions. You can do the same by using forms that were prepared by attorneys that take local laws into account.

Below are some State Specific Forms that relate to Real Estate transactions as well as software and educational information.

Complete Forms Package

This is the complete package of Real Estate Forms. It has over 100 forms to handle every type of Real Estate transaction from buying, selling or renting properties. It comes as a software application you can download and then enter the appropriate information and it will generate the form. If you need multiple forms, this is the most economical package.

Below are a list of the forms that area provided in this package:

Contractor Agreement
Bill of Sale
Quitclaim Deed
Agreement to Sell Personal Property
Assignment of Lease
Assignment of Mortgage
Authorization to Release Credit Information
Escrow Agreement
General Agreement
General Power of Attorney
Offer to Purchase Real Estate
Promissory Note
Sublease
Tenant's Notice to Exercise Purchase Option
Waiver of Lien
Warranty Deed
Commercial Lease
Residential Lease
Extension of Lease
Final Notice Before Legal Action
Mortgage Bond
Mortgage Deed
Notice of Change in Rent
Release of Mortgage
Balloon Note
Federal Lead-Based Paint Hazard Disclosure Requirements
Protect Your Family from Lead-Based Paint in Your Home Booklet
Lessor Disclosure on Lead-Based Paint
Seller Disclosure on Lead-Based Paint
Spanish Version-Protect Your Family from Lead-Based Paint in Your Home Booklet
Spanish Version-Lessor Disclosure on Lead-Based Paint
Spanish Version-Seller Disclosure on Lead-Based Paint
Real Estate Dictionary
Affidavit of Completion and Agreement Regarding Liens
Agreement to Amend Real Estate Purchase Contract
Agreement to Sell Real Estate
Appliance Inspection/Replacement Schedule
Assignment of Lien
Cancellation and Mutual Release of Real Estate Purchase Contract
Closing Costs Worksheet
Condominium Owner's Association-Proxy Form
Contingency Addendum: Sale of Real Estate
Contingency Release and Notice
Counteroffer to Purchase Real Estate
Exclusive Agreement to Sell Real Estate
Home Maintenance Schedule
Homeowner's Association Disclosure
HVAC Inspection Form
Letter of Intent to Purchase Real Estate
Limited Power of Attorney
Monthly Budget Planner
Mortgage Shopping Worksheet
Notice to Exercise Purchase Option
Open Agreement to Sell Real Estate
Option to Purchase Real Estate
Personal Financial Statement
Preliminary Home Inspection Checklist
Real Estate Sales Disclosure
Seller's Acceptance of Purchase Offer
Special Warranty Deed
Special Warranty Deed Subject to Vendor's Lien
Subcontractor Agreement
Vacant Land Agreement for Sale and Purchase-No Broker
Vacant Land: Offer to Purchase Agreement
Cleaning Checklist
Credit Check and Screening Receipt
Demand for Compliance or Right to Possession Notice
Drive-By Rental Inspection Notice
Emergency and Nonemergency Maintenance Numbers
Garage-Parking Space Lease
Indemnity Agreement with Landlord
Key Release
Late Notice Letter
Lease with Purchase Option
Lock-Out Assistance Receipt
Marketing Letter to Broker
Marketing Letter to Local Business
Mobile Home Park Lot Lease
Mold Addendum
Monthly Rental Agreement
Notice of Intent to Enter
Notice of Termination of Lease
Notice That Eviction Will Be Filed in Court
Notice to Quit or Pay Rent
Notice to Terminate Tenancy
Pet Policy-Residential Lease Addendum-Pets
Pre-Lease-Post-Lease Inspection
Property Management Agreement
Property Viewing and Key Arrangement
Rental Credit Application
Renter's Insurance Referral
Residential Lease-Furnished
Returned Check Notice Letter
Roommate Agreement
Safety Inspection Letter
Satellite Dish-Antenna Addendum
Smoke-Carbon Monoxide Detector Inspection
Statement of Interest Earned on Security Deposit
Tenant Behavior Policy
Tenant Employment Verification
Waiver of Landlord's Claim to Annexed Fixtures
Waterbed Agreement-Addendum to Rental Agreement
Promissory Note
Authorization to Release Credit Information
Final Notice Before Legal Action

Real Estate Investing Guide and Forms

If you don't need the complete kit, they also have one for people looking to invest in real estate or Essential Real Estate Forms .The invest in real estate kit contains:

detailed, easy-to-follow user manual covering such topics as:
- real estate investor personality
- long- and short-term investing
- finding a property
- inspecting a property
- flipping a property
- landlording duties
CD-ROM
neighborhood/suburb analyzer
preliminary home inspection checklist
buyer’s walk-through inspection form
maintenance schedule
HVAC inspection form
appliance inspection/replacement schedule
broker appraisal form
mortgage loan evaluator form
hazardous materials inspection checklist
banking information sheet
appraisal request form
tenant forms

For Sale By Owner Kit

If you are just looking to sell your home, you might find the For Sale By Owner Kit useful. It contains information and forms for:

Choosing a real estate attorney
Preparing your home for sale
Pricing to your market
Advertising your home
Attracting qualified buyers
Handling offers and negotiations
Disclosures and inspections
Structuring seller financing
Handling the legal paperwork
Mortgage, tax and estate planning basics

Purchasing Real Estate Kit

If you're interested in purchasing real estate, or even arranging a lease to purchase contract, the Essential Real Estate Purchase Forms kit provides the forms you need forms for both sides of the transaction, sellers and buyers. The five forms included are:

Offer to Purchase Real Estate: make an initial offer on a property
Agreement to Sell Real Estate: set out the conditions for a purchase
Lease with Purchase Option: lease or rent property with an option to buy it later
Quitclaim Deed: finalize the transfer of property
General Power of Attorney: transfer control of real estate transactions to another party

Real Estate Forms

If you already have the knowledge and just need particular real estate forms you can choose from the following individual forms:

What our Deficit is Really Costing Us

Tom — Fri, 9 Jan 2009 00:59:23 -0500

It's a bit late but I wanted to post about something I just saw on CSPAN. Late night C-SPAN? Yeah sometimes I'm up late and bored. Senator Sheldon Whitehouse, a Democrat from Rhode Island made some points during today's meeting with Congressional Budget Office (CBO) representatives.

[An aside: Peter Orszag, Director of the CBO, gave a great assessment of the TARP program when Congress was considering voting on it. I was very impressed with his testimony but it was sort of like watching someone ask an economist whether they should burn or shred their money. The CBO doesn't make policy decisions, they just evaluate what the impact will be of those decisions. I was still very happy to hear that Orszag has been selected by President Elect Obama to be his Director of the Office of Management and Budget, even though he still doesn't make policies, but his input can now have more influence on selecting the right ones.]

Senator Whitehouse pointed out that last years budget included $260 billion dollars to pay the interest on the Federal deficit and that money could have been used for better purposes. I'm glad to hear our elected officials thinking in these terms. In a previous post I explored some other ways to spend $1 trillion, in response to the bailout money that was being handed out.

The difference between the actual deficit, and what the CBO projected when President Bush first took office is $7.7 trillion. That's a pretty big chunk of change considering President Clinton left office with a budget surplus. The video on the right is from March, 2008.

During the bubble our economy was growing very fast. That's kind of what a bubble is. But instead of saving that money and using it to pay down our debt, we increased it dramatically. Financial Planning 101, put money away during good times because good times don't always last.

What might have happened is that instead of saving, money had to keep flowing out to keep the ponzi scheme that was the housing market keep going. And if you look at the bottom of this next link, you'll see that housing was very unaffordable under the Bush Administration.

I don't have any political affiliation but it's hard not to point out the obvious. I do get a kick out of either hard core republicans or democrats that link to some of the political topics I've discussed and use it to back up their arguments. And I've had both, sometimes for the same blog post!

Let's take a look now at what Sen Whitehouse determined we could have done with that $260 billion last year.

Provide Universal Healthcare - This one doesn't need much explaining. Cost of healthcare has been growing and many Americans are in trouble. Sick or injured people can't work. People that don't work don't pay taxes and sometimes have to rely on public funds. Healthier citizens means a healthier country. Healthcare costs are also a leading cause for bankruptcy in this country yet 15.3% of Americans (45.7 million) had no health insurance in 2007. That's not counting the underinsured.
Double Pell Grants - The cost of higher education has also been rising and many families are finding it harder to send their kids to college. If we're going to compete in the Global Economy we need smart citizens since we've shipped a lot of jobs that don't require college educations overseas. In the 2005-2006 year "the maximum Pell grant covered one-third of the yearly cost of higher education at a public four-year institution; twenty years ago, it covered 60% of a student's cost of attendance." Doubling it will bring us back to where we were 20 years ago.
Double the Head Start Program - The Head Start Program was created in 1965 to address systematic poverty and provide education, health, nutrition, and parent involvement services to low-income children and their families. Here we are 43 years later and 12.5% of our population (37.3 million people) still live in poverty.
Fix 95% of the bridges that need repair - Our infrastructure needs repair. Bridges in particular and they have already shown they can be a real threat to human life. Improving our infrastructure also puts people to work.

According to Sen. Whitehouse, we could have done all of these four things with the $260 billion that went to pay the interest only on the deficit. How do we run such a big deficit when the economy is booming?

Now, with all the bailouts and proposed stimulus package, things will only get worse. A lot of people made a fortune during the bubble, and now our government will have to spend even more money to try and fix things. Money we don't have. Money we didn't save. Money we have to borrow.

During the housing bubble, many people who got in trouble with their mortgage kept refinancing to cash out some equity and try and get ahead. This would give them more debt but give them some money to try and sort things out. As long as house prices kept rising, they could do this indefinately. But house prices were not sustainable. It seems like our government handled their debts the same way.

2009 To Set New Foreclosure Auction Records

Tom — Mon, 5 Jan 2009 16:06:23 -0500

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.