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WisBusiness: State site finds itself at center of foreclosure boom

By Brian E. Clark

When real estate investor Robert Jansen began gathering data on pre-auction home foreclosures five years ago, he had no idea it would become a growth industry.

He was collecting the information for himself in an effort to buy houses at bargain-rate prices. Even before foreclosures began to climb, Jansen and two partners turned the data they collected into a company serving others with the same interests.

The result is ForeclosuresWI.com, a subscription-based service that tracks aggregate repossession data for all of Wisconsin, plus detailed listings of homes in southeast Wisconsin that are in the process of being repossessed by lenders.

Information subscribers receive includes the foreclosure filing, property address, assessed value, tax information, year built, square footage and number of bathrooms and bedrooms.

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He recently added Dane County to the offerings. The charge to subscribe is $19.95 for the first county and $99.95 for all nine counties. The foreclosure data is gathered by contractors and through proprietary data collection methods.  

“When we started, we were looking at foreclosures as investments,” explained Jansen, who said he quickly became frustrated with national Web sites that he said had outdated, inaccurate or incomplete information.

“We said, ‘Hey, there might be a real niche for this and a need.' So we decided to do our own research and dig in,” said Jansen, 30. His remaining partner, Steve Schmidt, is also 30 and a developer. They bought out co-founder Joel Behrens, 28.  

“Once we did that we decided to make that information available online,” added Jansen, who said ForeclosuresWI.com became profitable in its second year.

Though repossessions in Wisconsin have not risen to levels seen in California, Nevada or Florida, data from ForeclosuresWI.com shows they have more than doubled since 2005.

Wisconsin added nearly 2,000 new repossessions in May, bringing year-to-date foreclosures up to 10,644 and more than 38 percent higher than the first five months of 2007, according to a recent report from the site.

Jansen, a former accountant, said he had no inkling repossessions would rise so dramatically.

“We had no idea they would reach record levels ... we didn’t foresee a mortgage crisis,” he said.

The market several years ago had attractive investments, but there are certainly more now, he said.

“The fact that the foreclosures have taken off since then has only been coincidental,” he said.

Jansen said the model for ForeclsosuresWI.com is the same as that used by national companies, only his site is focused on Wisconsin.

“It’s pretty simple,” he said. “But we are a local company, so our data is better and more timely, meaning it is updated more frequently.”

At this point, he said he is growing the business in Wisconsin to add more counties. Expanding to other states may be down the road, he added.

Jansen said questionable subprime mortgage loans have contributed to the high rate of foreclosures. However, he said he believes many people are losing their homes because of job loss, divorce and health care crises -- just as in recent decades.

“There is always that base of foreclosures, but what is really driving this now are some of the lending practices where people got in over their heads with variable rate mortgages and didn’t realize ... that their rates had the potential to increase so significantly,” he said.

Jansen said he can’t forecast when the housing market will turn around, but he predicted foreclosures will remain high at least through the end of this year and perhaps into next year.

He said realtors looking for motivated sellers, bankruptcy attorneys, mortgage bankers, real estate investors and consumers looking for bargain rates on houses are the primary customers of ForeclosuresWI.com.

Jansen said he does not track the prices that houses listed by his service eventually bring.  

“We put the information out there and then people do their own thing,” he said. “But the feedback I’ve gotten from the market is that it really depends on what shape the property is in and whether it has been neglected or not.”

But Jansen said not all repossessed homes are “fixer-uppers” and that sometimes well-tended houses in nice neighborhoods face foreclosure.

Though Jansen has no contact with the people who are losing their homes, he said he has some mixed feelings about profiting from their misery.

“But we see our role as a critical link between someone who is undergoing foreclosure and someone who can help them, be it an investor who wants to buy it or someone who can help them refinance. We are intermediaries,” he said.

Jansen said some of his subscribers will contact the homeowner directly to negotiate what he called a “win-win deal” in which homeowners can recoup some of their equity, while the buyer also gets a discount.

“And both are better off for doing so, as opposed to the house going to a public auction, where the homeowner is no longer really involved and they see no equity,” he added.

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