Comments on: In Response to the FR article, “2008 Reports Just In”

By: Dennis Horn

Dennis Horn — Tue, 04 Aug 2009 20:37:45 +0000

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

By: EstellaB

EstellaB — Tue, 04 Aug 2009 19:05:07 +0000

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.

By: EstellaB

EstellaB — Tue, 04 Aug 2009 18:49:00 +0000

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.

By: Dennis Horn

Dennis Horn — Tue, 04 Aug 2009 18:05:31 +0000

“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.