A couple of years ago RealtyTrac was in some hot water for over-inflating foreclosure statistics for the state of Colorado. According to one Foreclosure Article in The Seattle Times, published online on June 16, 2007, “RealtyTrac reported 54,747 foreclosures last year — one of the highest in the nation. The state’s Division of Housing, however, said the actual number was 28,453 and publicly chastised the firm for inflating numbers.”

The article titled, “Numbers from foreclosure statistics company questioned,” continued by stating the company doubled, even triple-counted foreclosures for a single property.

The article was just one in a slew of articles that offered somewhat of a public outcry for more accurate figures. The main concern, that the figures being reported by non-governmental, for-profit companies were being used in governmental review, and eventually considered in proposed law to help curb the onslaught of foreclosures.

Now two years later, in response to these inaccuracies, Colorado has signed into law a new housing bill, aimed to collect and report its own statewide foreclosure statistics. A Colorado Springs blog reporting on the issue states, “concerns have been raised that foreclosure numbers for Colorado are inflated versus other states that have already implemented standardized reporting procedures. This can put Colorado at a disadvantage when national numbers are analyzed and compared.”

The new housing bill (HB 1196) will help regulate foreclosure reporting, at least for government and media use in the future.

Along the same vein as prior articles on responsible reporting in the media, there seems to be more awareness towards media outlets touting gloom and doom figures. The people are beginning to publicly question the backings of all these new reports.

The latest of these articles comes out of the editorial/opinion column in the Outlook, a local paper in Oregon. Published on April 8, 2009, local realtor Jon Hull voices his opinion in his letter, “Responsible reporting vs. doom and gloom.” In the letter, Hull describes how journalism has “helped to stymie consumer confidence across our nation,” and helped “to cause fear and alarm in our community without including any of the positive aspects, which offer balanced reporting.”

Hull states that one of the main causes of doom and gloom reporting comes directly from the companies reporting the information. In this case the “source of statistics is a foreclosure revenue-generated based Web site out of California,” Realty Trac. Hull states that according to RealtyTrac, Oregon is ranked 9th worst in foreclosures while various other companies state it is has some of the lowest foreclosure rates in the country.

Hull continues by stating, “Numbers can be made to look however you want, (isn’t that how we got in this mess) or can be pulled from sources, which in this case apparently support the doom and gloom article presented.”

As foreclosure Research has reported in the past… There are always two sides to every (foreclosure) story.

Throughout Foreclosure Research’s endeavor to find the truth behind foreclosure data, many different avenues have been explored to help demystify foreclosure statistics. Some of the more obvious causes of these untruths so to speak, came from the inaccuracies of several foreclosure listing providers, and from faulty reporting in the media.

However, the underlying truth behind the economy, foreclosures, and the housing market downturn are unarguably complex. Yet many factors are identifiable and some more pertinent than others.

One interesting perspective that has yet to be noted comes from Jay Brinkmann, a chief economist for the Mortgage Banker’s Association. In an article titled, “Looking at another side to a foreclosure report,” published on March 28, 2009 in the Houston Chronicle, Brinkmann had a separate take on the latest foreclosure figures. The figure in question was from an article on the Reuters wire titled, “One in 8 U.S. homeowners late paying or in foreclosure.”

The Chronicle article tries to explain the difference between a mortgage foreclosure and actual homeowners that are losing their homes. Here is an expert of Brinkmann’s observation:

“The ‘One in eight homeowners either in foreclosure or behind in their payments’ is wrong. For starters, it’s one in eight mortgages — not homeowners — and this distinction is very, very important. When you look at the number of mortgages out there, it includes lots of investment/rental properties.”

Brinkmann continues to explain that while there are “x” amount of mortgage foreclosures, doesn’t necessarily correlate to families being kicked out of their homes. He used an example of a New Jersey grad student who bought 3 condominiums in Florida, with over-leveraged mortgages. Or an attorney in Phoenix who purchased 30 homes, both investors stating the homes were each “owner occupied.”

These pseudo-investors gambled with the market and lost. They now comprise a large percentage of “homeowners” walking away from their mortgages and ultimately contributing to the grim statistics in the media. They are not to be confused with those who have in deed suffered economic hardship, but are rather failed speculators.