With the latest third-quarter figures still in the news, now is a good time for some further scrutinization. Strategically and purposefully, it seems that foreclosure listings companies offer their statistics in varying forms as not to draw any obvious attention to the disparities afflicting the data.

The most recent reports do just that.  An article published on October 10, 2008 in the South Florida Business Journal, uses ForeclosureS.com reported numbers for Florida during the period of September, 2008. The article, titled, “Florida ranks No. 3 for foreclosures,” stated there were 64.2 foreclosure filings per 1,000 households. We agree that Florida does rank high compared to most states, but this figure seems too high relative to other reports in the media.

According to the U.S. Census figures, there are 6,337,929 total households in Florida, which would equal 406,895 filings in the state of Florida. While this may be the number that ForeclosureS.com found, the numbers over at Realty Trac are profoundly different.

In a press release available on the Realty Trac website, the foreclosure listing company reported only 47,956 foreclosure filings in Florida for the month September.

This is a difference of over 350,000 filings from the ForeclosureS.com report! Whether it is access to wrong household data, wrong foreclosure figures or just bad calculations, there seems to be an evident problem.

There was a similar reporting error in a ForeclosureS.com press release dated October 9, 2008 on Market Watch. The release reported that “7.8 of every 1,000 households nationwide faced pre-foreclosure.” The article continues by stating the figure equaled 561,467 homeowners who received a foreclosure filing.

Again, referring back to the U.S. Census bureau (which ForeclosureS.com is using in their calculations), there are 105,480,101 total, nationwide households. However, 7.8 out of every 1,000 households would equal 822,744 foreclosure filings not 561,467. If there were in fact 561,467 foreclosure filings then the statistical representation should be about 5.3 of every 1,000 households received a foreclosure fling nationwide.

While the difference between 5 and 7 is minimal, the difference of over 250,000 is a gross misrepresentation as it relates to total foreclosures nationwide. Readers should be wary when reading foreclosure statistics as they may come in different (or wrong) packages.

Third quarter numbers have been released to the press with yet again many articles offering more conflicting numbers. Depending on the source of the foreclosure data, most likely readers will see a variety of figures reflecting the current state of the foreclosure market.

The first of these articles comes from CNNMoney.com titled, “81,312 homes lost to foreclosure in September.” The article published on October 23, 2008 by Catherine Clifford offers figures from Realty Trac, an Irvine, CA based listing company.

As stated in the headline, there were 81,312 foreclosures during the month of September. The article continues by stating that according to their information, foreclosures actually decreased 12% from August to September. While this figure may have been even more newsworthy for a headline than total month foreclosures, it was not given the attention it deserved and shuffled into the bulk of the article.

However, an even larger number that surprisingly was not utilized in the headline, was that pre-foreclosures, or foreclosure filings, totaled 765,558 for the entire third quarter of 2008.

On the other end of the media spectrum, there are a whole slew of similar foreclosure articles with a wide disparity in figures. One of these articles comes from Market Watch in a press release titled, “U.S. Foreclosures Index Shows More Than 107,500 Homes Lost in September.” The article written by Sofia Gutierrez provides figures from ForeclosureS.com, a competing foreclosure listing service.

The titles alone show a difference in foreclosure figures for the previous month. Contrary to the first article, ForeclosureS.com reported 107,500 foreclosures for the month of September. Continuing through the article, the decrease from August to September is also different. While Realty Trac reported a decrease of 12%, ForeclosureS.com reported a decrease of only 2.4%, both numbers reflecting foreclosure filings for the same period of time. Total foreclosure filings for the third quarter are also different. ForeclosureS.com reported a total of 561,467 filings, a difference of 204,091 total filings!

The difference in total foreclosures for the month of September is also disconcerting. The difference between total foreclosures from both foreclosure listing companies is a whopping 26,000 foreclosures! A difference of 26,000 owners losing their homes is almost as large as the amount of total foreclosures for the entire state of Florida for the entire month of September.

In statistics, a variance of nearly 25% would make the findings inconclusive. However, while the difference in foreclosure flings and total foreclosures were both 25% between companies, readers could simply use the 25% figure as a permanent margin of error when reading foreclosure reports from the usual suspects.

Foreclosure statistics have again sprung up across all media outlets. However, unlike recent trends, the headlines for California are claiming dramatic foreclosure declines. Imagine, in a time with economic strain taking precedence in the media, comes an article with a slight glimmer of hope? But is it based on fact?

According to reports from Foreclosure Radar, California foreclosure notices in September dropped significantly compared to rates in August. The statistic comes from one of several articles on the subject, this one titled, “State foreclosures fall dramatically.” The article quotes the company as stating, “Notices of default, which indicate the start of the foreclosure process, fell 61.8 percent in California compared with August.”

While Foreclosure Radar rarely issues foreclosure statistics statements to the media, it is interesting to see once reporting a rather drastic change (whether it be an increase or decrease) the company is suddenly the sole source for foreclosure data and trends. Also, it was rare to see no articles utilizing Realty Trac statistics for California for that specific time period; as most likely they would have been different or worst yet, would not have been as dramatic. Over the last few months of foreclosure investigating, Foreclosure Research has come to find out the more drastic the change the more media coverage.

However, there was one foreclosure listings company that did report a similar statistic. In a press release published on October 9, 2008, Foreclosures.com reported that California foreclosure flings did in fact decline, however, they declined by just 38 percent. The decline issued by Foreclosures.com is almost half of what was reported by Foreclosure Radar. The figure issued by ForeclosureS.com, a company who is more frequently quoted in the media, was not found anywhere in traditional media outlets. Only the more dramatic change by Foreclosure Radar was used.

While California most likely did reflect a decline in foreclosure flings, it is up to the media to report not only correct figures, but not play favorites to those figures that would be easier to sensationalize.

Over the last few months Foreclosure Research has provided several articles pointing out the discrepancies in reporting for different foreclosure companies. The discrepancies are most likely due to the fact that foreclosure information is spread out across all platforms and is truly illusive in nature.

The reality is, foreclosures are so hard to track that some foreclosure listing companies are even using their competitor’s data for uses in press release articles. Take REOSphere for example. REOSphere is based in Minnesota and provides REO listings for the St. Paul and Minneapolis area.

According to a recent press release published on September 23, 2008, the company reported the exact same percent increase (down to the tenth of a decimal) as Realty Trac when providing statistics for Minnesota.

The press release by REOSphere stated that foreclosures in Minnesota increased 119.7 percent from the second quarter of 2007 to the second quarter of 2008. According to Realty Trac’s quarterly report, foreclosures increase by that exact percentage, for that exact period of time.

Based on past Foreclosure Research articles and investigations, the chances of two foreclosure listings companies having the exact same figures for a certain time period, for an entire state, are slim to none. This is especially rare for a time period as long as a year.

Yet, it does not stop at one statistic, which could be a coincidence; the release is full of Realty Trac figures. According to the press release, Minnesota ranked 27th in the country, exactly the same rank as Realty Trac gave the state. While there is no reference to Real Trac, REOSphere wouldn’t even have the resources available to rank the entire state as it only has information for the capital city.

Considering this, REOSphere continued to use Realty Trac’s information even on the areas of REOSphere expertise- the Minneapolis/St. Paul area- with Realty Trac ranking Minneapolis, St. Paul as 59 in the top 100 metro areas.

While using a competitor’s data without a reference may be one issue in itself, another issue is that fact that there is no control over whether or not that data is true. According to last week’s foreclosure research article, “Rural Areas Don’t Count,” Realty Trac gave testament to the fact that they do not focus on rural areas or areas with less than 25,000 in population.

Based on information by the U.S. Census Bureau, Minnesota has at least 49 counties with less than 25,000 in population. So, to add insult to injury, not only is the company using a competitor’s data, but that data is also most likely inaccurate.

With the recent revelation coming from Realty Trac’s reporting process, Foreclosure Research has come across some interesting findings.

Referring back to the article, “How many foreclosures? ‘We know we’re underreporting West Virginia,’” Rick Sharga provided the following insight, “West Virginia is one of the states where we need to do a better job.”  He continued by stating, “We know we’re under reporting in West Virginia,” and that, “we concentrate on areas of 25,000 people or more.”

The article also touched upon the fact that Realty Trac stated West Virginia had a very low foreclosure rate, which proved to be false.  Taking this information into consideration, there also were several other states with extremely low foreclosure rates according to Realty Trac’s quarterly reports. This then brings up the question; Could these other low foreclosure rate states also have sparsely populated areas similar to that of West Virginia? The answer is, yes.

According to the U.S. Census Bureau at least 6 states with extremely low foreclosure rates had a majority of metro areas and counties with less than 25,000 in their respective populations.

One of these states is Alabama.  According to the U.S Census, at least 24 counties have a population of less than 25,000.   A far lower foreclosure rate was reported for Mississippi, where more than half of the total counties were below 25,000 in population.

Alaska, a state with extremely low foreclosure rate, exhibits populations of lower than 25,000 in 22 of the total 27 counties.

While Maine has relatively large counties, two of the top three metro areas have as little as 35,000 in their populations.

The state of Iowa has 75 of 99 total counties with less than 25,000 in population. Similarly, Vermont showed almost half of its counties have populations of 30,000 and lower.

These states were just a sample of the many states with a majority of sparsely populated areas. In fact, the majority of the country is filled with rural areas. For that, one must wonder how a foreclosure listing company that only focuses on populations of 25,000 or more can have an accurate take on nation-wide foreclosure rates.