In Response to the FR article, “2008 Reports Just In”
Foreclosure Research received a comment on a recent article stating that Realty Trac had posted two separate numbers for 2008 foreclosure filings. One number was total filings (3.16 million) the other number, which was not mention in the article, was the number of properties that received a foreclosure filing (2.3 million).
The fact of the matter is why would RealtyTrac have even released a figure that contained duplicate figures? Readers should ask themselves, what is the point of knowing that one home received two foreclosure flings versus just one?
This information is obsolete and should not even be reported. The two numbers and more so, just the duplicate filings number was reported in several media outlets throughout the past month.
Let’s take a look at some of the articles utilizing both figures including the higher figure reported first:
Kansas City Business Journal dated January 15, 2009, “KC ranks No. 49 for 2008 foreclosures.”
Morganton News Herald dated January 15, 2009, “Foreclosures increasing in Burke County.”
Articles that do not mention the actual foreclosure filings number:
Investors.com dated January 15, 2009, “Economic Downturn Eases A Bit in Jan., But Direction Remains Sharply Negative,” does not mention the actual amount of 2.3.
SchaeffersReasearch.com dated January 15, 2009: “Midday Market Update,” also does not mention the amount of properties, only the duplicate filings number.
MarketWatch dated January 15, 2009: “U.S. Foreclosure filings in 2008 rose 81% from 2007.”
MarketWatch dated January 15, 2009: “Gold dips, ending lower for fourth day on dollar, oil.”
More articles reported the duplicate foreclosure filing number of 3.16 million, perhaps for a couple of reasons. One, it is not clearly stated in the preliminary report that these are duplicate filings, or multiple filings for a single property; or two, the larger, 3.16 million number creates a little more drama and buzz.
In addition, Foreclosure Research would like to stand corrected, in light of the duplicate filings figure, that ForeclosureS.com and ReatlyTrac.com reported a difference of a quarter of a million foreclosure filings for 2008. While the disparity is less, it is still vast to say the least.
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“what is the point of knowing that one home received two foreclosure flings versus just one” This information can tell us a lot. Namely how many homewoners out there defaulted on not one but two (or more) loans associated with their homes, giving us an indication on how many homeowners took out second (or third) mortgages. If you are looking to buy a foreclosure, you will definitely want to know if the home has more than one mortgage. I beleive the fault lies not on RealtyTrac for reporting both numbers, but rather the researcher for not taking the time to understand what he’s reading.
Hi Dennis,
Thanks for the comment, but the filings are not two separate defaults as you mention. It is the same default, on the same loan, on the same home, by the same owner.
For example. One homeowner defaults on their mortgage. The default notice, is counted (1). Then when the home gets a second notice for the trustee sale (2) and then one more time in case we missed the previous two notices when the home is finally repossessed with the lender (3). Three total filings. One loan. One owner. One home. Counted 3 times.
But you are correct. It would be useful to know how many loans- and essentially how many defaults are coming from individual homeowners. However, it becomes a problem when they use these duplicate filings to extrapolate a statistic utilizing the population as a whole.
For example. Say a homeowner defaults on two loans, both having at least two filings. That would equal 4 filings for any given home.
Then, considering those four filings, many reports will then conclude for a population of 20, that 1 in 5 homeowners have received a foreclosure filing, when it should be 1 in 20. Thus making the situation look more dire than need be.
Thanks again for your observation!
Estella.
Estella-
I’ve heard conflicting information regarding the reporting of these two numbers. Can you point me to a source that clarifies this so I can put this confusion to rest? It seems from the beginning of the above article that RealtyTrac admits to this duplicate-reporting.
Thanks,
Dennis
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