The Gorgas Sold Their Home; Is Joe Gorga Broke and Facing Bankruptcy?; Does He Really Pay His Bills?; Joe Gorga Has a Negative Net Worth of $1.5 Million (Updated 9/3/2013)
October 9, 2012 277 Comments
UPDATE August 20, 2013: RadarOnline reported that the Gorgas sold their home for the asking price of $3.8 million; however, the tabloid consistently misreports, so the information is questionable. In fact, they reported that the Gorgas only paid $950,000 for the mansion, but that’s what they paid for the lot in 2007 (they paid cash, per Melissa) – they took out a $2,250,000 construction loan in 2008 to build the mansion, and later converted it to a regular mortgage loan in the amount of $2,185,199. In October 2012, they extracted $500,000 in equity in a cash-out refinance, probably to pay off their shore house, which was tied to the mortgage loan on their mansion. Us Weekly, aligned with Bravo to promote the Gorgas, also reported on the sale.
“Bad week for Melissa Gorga. Out of $. Home being foreclosed. Forced into (nice) rental & news that she cheated on Joe while married.” – Enty Lawyer (@entylawyerm), February 2, 2013, Twitter
“Why don’t you pay your bills… you have to borrow money every week from people.” – Joe Giudice to Joe Gorga during part 3 of the season 4 reunion special
It is estimated that Joe Gorga’s net worth is a negative $1.5 million because of the depressed value of his real estate holdings (they are mortgaged to the hilt and the loan amounts are more than the properties are worth).
Melissa’s desire for fame started way before Bravo ever came to NJ. She was interested in the HW shows all the way back to the original OC. When Teresa was cast in the NJ series in 2008 [Bravo first approached her in 2007], let me tell you that the explosion should have been heard around the world. From that day, even before filming began, Melissa and Joe did all they could to tell everyone that Bravo chose the wrong NJ HW. I couldn’t believe the things they said about Teresa — how could a brother stoop so low?They are broke. The house was built as a ‘spec’ house and was NOT their real home. As soon as their campaign to get Mel on the show worked, they moved to the spec house and conveniently never told the bank. I tried to tell people not to trust Melissa, but everyone has to find out for themselves I guess. – Regan, May 6, 2012, RealityTea.com
Joe and Melissa Gorga’s mansion, which they built in 2008-2009, is officially for sale…AGAIN — trying to sell your home in a housing slump is a good indicator that you are in over your head.
During season 3, Melissa claimed that Joe surprised her on Christmas with house plans and built the mansion for her as her ‘dream house.’ This was a lie. It was built as a spec home to sell for profit, but the market crashed and they weren’t able to sell it for what Joe was asking… they were living in it while it was officially under construction (construction loan v. mortgage loan) to give the appearance of wealth so that Bravo would cast them.
The Gorga’s put their 16-room, 13,500-SF, 6 bedroom, 6 1/2 bath mansion with 4-car garage on 2.24 acres back on the market in May 2012, this time listing it for $3.8 million (it was listed for $4.1 million in 2010 but was pulled off the market when the Gorgas signed their Bravo contract in September 2010). [The construction loan was $2.2 million — they are hoping to sell it for $3.8 million in a depressed market.]
They are also had their 3 bedroom, 2 bath ‘shore house’ in Toms River, NJ (which they purchased in 2005 for $450,000), on the market for $520,000, but removed it from the MLS on September 15, 2012.
On May 12, 2012, Melissa told RealityAired that they put their shore house on the market every winter — they want the viewers to believe that they been trying to sell it every winter for six years, yet it was spring, going on summer, and it was still on the market through August 2012, so that story doesn’t add up. Plus, according to Zillow, the shore house has not been for sale every winter; it’s only been for sale once, starting August 2011 (summer, not winter).
They purchased their shore home on May 5, 2005, near the peak of the real estate bubble, for $450,000.
Melissa Gorga stated on WWHL, on July 8, 2012, that she and Joe removed their shore house from the market even though they just received a full price offer on it the past weekend. However, as of July 31, 2012, it was still listed as “active” on Realtor.com, so she lied, again (it was removed from the market on September 15, 2012). Plus, she indirectly admitted that she lied during season 3 when she said Joe surprised her on Christmas Eve with plans for her dream house (their primary residence that they’ve been trying to sell since it was built), saying on WWHL that the house is a ‘flip.’
The Gorgas had a $2.25 million balloon payment due in July 2012; however, they refinanced their home in 2011, which converted the balloon payment into a regular mortgage payment of approximately $12,000 a month.
“I honestly believe most of them go on this franchise because they’re in serious debt and will air their dirt for the money in hopes it leads to more wealth. I’ll bite that Joe and Melissa might be upgrading to their dream McMansion in Franklin Lakes. BUT why would they sell the shore house that Melissa loves so much and allows her to be closer to her family? IMO, the Gorgas are trying to prevent a PR fire because Joey has allowed his mouth to write a check his bank account can’t cash. Juicy will have the last laugh and be proven right about his opinion of JoGo’s business acumen.” [Judith, May 13, 2012, Reality Tea]
“Why does she feel the need to explain away EVERYTHING?? A blog could write “Melissa Gorga Farts in Sherri Shepard’s Face”, and Melissa would deny it and go to the lengths of getting a signed statement from her doctor about when she farts. (Okay I’m being dramatic, but you get my drift.) I know she wants to prove they’re not really broke and what not, but was it really necessary to provide a BLOG with documentation (no offense Reality Tea; you’re awesome)?? Almost every housewife, from every franchise has something falsely written about them. That doesn’t mean they have to dig for all types of documentation and proof for people that they really don’t have anything to prove to. They let the truth speak for itself. I think that’s why Melissa is so determined to dispel certain rumors. People who have nothing to hide feel they have nothing to prove. I’m just sayin’.” [Sicily, May 15, 2012, Reality Tea]
“I think they are broke. They have to defend it because they have said so muc sh*t about Teresa living beyond her means. They don’t want it to come out that they do the same. I see her always having to show ‘proof’ as a dead give away. People who have things written about them – that isn’t true – laugh it off.” (Plus, they frequently do club appearances for cash and charge their fans for CD signings and meet and greets). [Hanky, May 15, 2012, Reality Tea]
“The reason it is suspicious is you don’t move from your dream home (especially if you have a large family) if there’s not a significant reason. If you have a starter-home, then you move up. Normally this would be nobody’s business, but when you go on these reality shows, you build your own character — and so many of these Housewives portray themselves as far richer than they actually are. So they’re building a false character and not being authentic — and not being (or seeming) authentic on a reality show will ultimately backfire. If you’re just honest and say that you’re overextended on a mansion then I think the public will appreciate that. Teresa finally owned up to (mega) mistakes and I think that went a long way with the public. Coverups never work (see John Edwards).” [Jen, May 15, 2012Reality Tea]
The Gorgas will have to sell the mansion at a loss — they claim they are going to build a new home in Franklin Lakes (a whole 15 miles away).
On May 9, 2012, Us Magazine reported:
“I’m a builder. I custom-built the houses we have lived in and will do the same with our next one,” Joe tells Us Weekly exclusively. “We tried Montville, but it just wasn’t for us. We want to go back to Franklin Lakes, which is closer to where I work, and we’re looking at a couple of properties now.”
Adds “On Display” singer Melissa:
“I absolutely love our current house and will be sad to leave, but Joe is an incredible builder, so I have no doubt that I’ll love the next house just as much. Although this is the last time he is getting me to pack-up!”
Melissa — mom to Joey, 2, Gino, 4, and Antonia, 6 — tells Us their children are approaching the ages “where all of them will be in school and now is the time to try to make the move and be in a place where we are going to stay in the long run.
Joe is eager to move his family into their new home.
“Wait till you see the next house I build,” he tells Us.
On May 12, 2012, Melissa told Reality Aired:
“We gave Montville a try and want to move back to Franklin Lakes before the kids reach an age where they will all be in school. When we sell our house in Montville, we will move into a rental while Joe custom builds our next house. Joe is a builder and a businessman. He will sell pretty much any property for the right price and build again bigger and better.”
They are trying to sell Melissa’s ‘dream house’ just two years after moving into it, and just one year after building her a recording studio in the basement. And now they are implying that they are going to build a bigger and better home, and then sell that one too for the right price.
The Gorgas sold the Franklin Lakes home that Joe built (in 2003) on the lot he bought in 2001, which was before the real estate bubble (he built the home after he met Melissa in March 2003; they started dating in October 2003, she moved in with him in December 2003 and they married in August 2004 — per Teresa, season 3 episode 6, which Melissa later confirmed); he sold the home in 2006 for a profit well over $1 million, which is how he was able to buy the lot and build the mansion in Montville.
In her Bravo blog on May 14, 2012, Melissa claimed that they moved into their mansion in 2008: this would mean that they were living in it while it was under construction (it wasn’t completed until 2009, according to tax records). So she inadvertently admitted that they were living in it without an occupancy permit (at the time, they had an interest-only construction loan, not a mortgage). She also claimed they were approached by producers while living there in 2010; however, the real story is that Melissa’s campaign to get on the show began in 2008, and Bravo finally agreed to cast her when they promised to bring family drama and to ‘expose’ and ‘destroy’ Teresa (their audition tape). They officially removed their mansion from the market when they signed their Bravo contract in September 2010; however, they never stopped looking for a buyer because they were in over their heads with the mortgage and taxes, which totaled $20,000 per month before refinancing in 2011, which lowered their housing payment to $16,000 per month.
“Bravo was interviewing and filming for RHONJ beginning in 2007. Looking back at the other loan documents dated toward the end of 2007, we can see that the Gorga’s decided to plan to move on and up right around that time… They worked their tails off getting an obscene construction loan and bought the Montville property in 2007, but then didn’t finish building until 2009 and perhaps didn’t start living there until 2010… coincidentally around the time that S3 would start filming… it [one of the mortgage documents] says: “The Borrower (aka the Gorgas) also did execute and deliver to Lender a Construction Loan Agreement and other loan documents pertaining to the Loan, as well as mortgages encumbering additional collateral located at 11 Mermaid Rd, Toms River, NJ and 489 Summer St, Paterson, NJ, all dated of even date with the Note and Mortgage.” This tells me that not only was the 11 Mermaid home used as collateral but so was this 489 Summer property also used jointly as collateral. It also tells me that the $2.25 million mortgage was executed at the same time that a “Construction Loan Agreement” was executed, which probably means they are one and the same. These documents would include the document in the first screen that talk about the initial mortgage. So, the other properties were already being used as collateral and were continuing to be used as collateral in the modified loan… So, the initial loan in 2007 was for $2,250,000 with interest rate of 9% and was obtained by putting TWO properties up as collateral and was a Construction Loan… Under the modification they request to be able to change the interest rate (from 9% to 5%) and the repayment schedule (now pay $11,829.40 per month) and they request to extend the maturity date (from May 16, 2008 to April 1, 2041). All of these requests get agreed to and so, as far as I can tell, this is the agreement they currently have that ties up three properties together. [Kate, June 8, 2012, What's That Smell]
Joe bought the Montville lot in November 2007 (the year Teresa was cast on RHONJ, which is not a coincidence) and began building the mansion on it in 2008 (the same year they filmed season 1, which is not a coincidence). They moved into the mansion in 2009, when it was still officially ‘under construction,’ hoping to attract Bravo producers with their illusion of wealth. They completed construction in 2009, but they were living in it while it was under construction (and before they converted from the builder’s loan to a mortgage loan in 2011). They were added to the RHONJ cast in September 2010; the mansion was on the market, but they removed it from the market after they were cast on the show.
“Melissa, you were on WWHL making a complete @ss out of yourself. You had the nerve to laugh when they brought up your favorite subject Teresa’s bankruptcy. Your husband was also laughting about his sister’s misfortune. When the call came in about your own MONEY PROBLEMS it wiped the smile off your face. Honey you tried to act as if it did not bother you but because your such a terrible actress you looked like a DEER CAUGHT IN HEADLIGHTS. You were looking back at your husband like HELP. Mike Tyson read you really good. When he made that jokie joke it was on YOU and your HUSBAND. I seen you trying to kiss @ss but it did not stop Iron Mike. LOL. So you lied to the viewers. It turns out your house is a FLIP. REALLY!! Is that your story this season because last season you were telling a different story. What happened to the “HE LOVES ME SO MUCH HE BUILT ME MY DREAMHOUSE” B.S. Story you told us last season. It was Christmas Eve and Joey surprised me with the plans for this house my dream house. Pretty soon you and your husband will be filling bankruptcy too. I can almost smell it. You and your hubby are living above your means. Well you know the old saying EVERY DOG HAS ITS DAY. Yours is quickly approaching just because you laughed at your SIL misfortune. I’m pretty sure someone out there will be digging up some dirt on you with proof. Let’s see if you will laugh then. Mike Tyson got your number. Like he said it’s your because you still have possession of the house even if your in foreclosure. After the way you have talked about your SIL and Joe it would be shameful if you ended up with MONEY PROBLEMS TOO. Remember, God don’t like UGLY AND YOU HAVE BEEN VERY, VERY, VERY UGLY.” – purplepower2012, July 10, 2012, Melissa’s Bravo Blog
Here is an excerpt from her blog (notice that she never explained why they are selling the shore house they have owned for seven years, which was supposed to be the home away from home so she could be closer to HER family):
“Please don’t believe any of the rumors that we have a balloon payment due, that our interest rate exploded, or that we can’t pay our bills. Our mortgage history is all available in public records, so I would never say that if it wasn’t true. We have a 30-year fixed mortgage with an interest rate of 5% and have never once missed a mortgage payment in the whole eight years we’ve been married. It would make no sense that now we couldn’t afford this house. We own four buildings and have many other investments that would allow us to stay in this house forever if we wanted to. For the record, we sold our last house in Franklin Lakes for $2.45 million to LaVar Arrington (formerly of the Washington Red Skins and NY Giants) and bought in Montville so we could be closer to Teresa and the cousins. We moved into our current house in 2008 and didn’t sign on to the show until 2010. So obviously we did not just move into the house because we got on the show. We were approached by the producers two years after we were already living here. It does however kind of stink to be looped into the negativity surrounding everyone else’s problems, but I get, so that’s why I’m explaining it to you. Also, to all of you asking about my studio downstairs — it’s just a room, and all the equipment is coming with me! Yes there will be a new studio in my new house. Mind you, if we don’t sell this house, we aren’t moving anywhere. We will still be here! Sorry, it’s not juicier than that.”
Melissa contradicts herself in her April 30 and May 14 Bravo blogs:
In her April 30 Bravo blog she said that in 2008 they couldn’t afford diapers:
“There were times (like the one you heard me remind Joe of) that we couldn’t even buy diapers when Gino was first born. 2008 was definitely a hard year.”
In her May 14 Bravo blog she said that they moved into the mansion in 2008 after having just sold their last home (as the market was peaking), to an NFL player for $2.45 million (Joe bought the land for $345,000 in 2001, before the bubble years, and built the home, so his profit on the home was huge, probably about $1.5 million).
“For the record, we sold our last house in Franklin Lakes for $2.45 million to LaVar Arrington (formerly of the Washington Red Skins and NY Giants) and bought in Montville so we could be closer to Teresa and the cousins. We moved into our current house in 2008.”
Melissa said they moved into the mansion in 2008 (the same year that, according to her previous blog, they didn’t have money for diapers), but the tax records say building on it wasn’t complete until 2009, and the mortgage documents dated July 2009 list their address as their rental property in Kinnelon.
The loan documents prove that the mansion was an investment property: it didn’t sell so the construction loan was modified on July 1, 2009, for a three-year period at 6.25%, meaning the entire loan of $2.25 million would become due and payable in full on July 1, 2012 (the balloon payment that Melissa denies).
The Gorgas were cast and signed their Bravo contract in September 2010: the loan was again modified on April 12, 2011 (before the balloon payment came due) to their current 30-year fixed loan at 5% with a monthly payment of approximately $12,000. A loan modification is completely different from a refinance: normally you only get a loan modification if you can show financial difficulty in making the mortgage payments, and it is usually done to prevent foreclosure. Joe is a builder: it would be odd if he wasn’t struggling somewhat in this economy.
Their mortgage payment is $12,000 per month (it was $15,000 per month before they refinanced for the third time in April 2011). Public record shows their home was reassessed in 2012 for more than twice what it was in 2011 (because its finished value, or market value, was twice the amount it cost to build it). For tax year 2011 they paid over $52,000 per year ($4,400 per month) in residential property taxes. So their total house payment (mortgage plus property tax) is over $16,000 per month — that’s $200,000 per year to live in their ‘dream home.’ [Source] [Source] [Source]
To summarize: The Gorga’s initial loan in 2007 was for $2,250,000 with an interest rate of 9% and was obtained by putting TWO properties up as collateral and was a construction loan (for the lot, they paid $950,000 cash, which was profit from the 2006 sale of the first home Joe built). Under the Gorga’s loan modification request in March 2011, the interest rate was changed from 9% to 5% on a loan amount of $2,185,199, the repayment schedule was extended to April 1, 2041, and their new mortgage payment was lowered from $14,843 to $11,829 per month (not including property taxes of $4,400 per month).