Hoping to profit from the rising tide of troubled mortgages, investors and would-be investors crowded into a seminar on foreclosures, sponsored by Bergen County Sheriff Leo P. McGuire.
But the speakers warned that foreclosures are not the key to easy money.
“You’re not going to pay $500 for a $1 million property. It’s just not going to happen,” said Undersheriff Sharon McDonald, who often runs the foreclosure auctions, in which properties are sold to satisfy unpaid mortgage debt.
“There’s a lot of hard work and a lot of knowledge going into it,” said foreclosure lawyer Lenny Zucker of Mountainside, N.J., one of the speakers.
As many homeowners who took out subprime and adjustable mortgages fall behind on payments, Bergen County appears headed toward a record number of foreclosure sales this year. (Only a small number of troubled mortgages actually end in foreclosures; many struggling homeowners sell their homes or settle with the lender.)
About 100 people attended the seminar, filling an auditorium at the Bergen County Jail in Hackensack.
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A number were prospective investors, including Vince Tallarida, a Ft. Lee accountant, who said he has been interested in real estate investing for a while.
“But this area is very high-priced, and it’s very difficult to find good investments,” he said. “I’m just exploring (foreclosure) as a possible way of investing. I have to find out the pitfalls.”
He heard about some of the pitfalls: For one thing, a buyer at a foreclosure auction must immediately come up with 20 percent of the purchase price in cash or certified checks, then pay the full amount within 30 days.
And it’s not easy for an amateur to bid against the professionals who attend the auctions. Lenders typically bid on the property, and often win the auction. Frequently, the amount owed on the property is equal to its market value.
Finally, buyers generally take properties sight unseen. Many houses that look fine on the outside are a mess inside.
Some of those at the seminar had a personal interest in foreclosures.
Bonnie O’Brien of Paramus, who owns a recruiting firm and a medical sales firm, said she wanted to buy a home for her son. “He just moved back home and I can’t take it,” she said.
Karl Thiedeitz of Hackensack, who is unemployed, said that he has been through a foreclosure and eviction.
“I want to see how I could have prevented it,” he said.
In fact, though it drew many investors, the seminar was largely designed to help people in danger of losing their homes. Zucker, who represents dozens of lenders, gave them this advice: Act early, as soon as you realize you’ll have trouble making a mortgage payment.
“Go to your lender and say, ‘I want a payment plan; I don’t want to lose my house,'” Zucker said.
Seek help from lawyers and housing counselors, he advised.
And watch out for scam artists who prey on homeowners in trouble, said lawyer Thomas Quirico, the sheriff’s counsel and mayor of Little Ferry.
For example, a con artist might obtain the homeowner’s deed in return for a small payment and promises of future help, then allow the house to go into foreclosure and take what’s left over after the mortgage lien is paid off. That money should rightfully go to the homeowner.
The Record, Hackensack N.J.