Social networking site, Twitter has been receiving quite a bit of media coverage over the last couple of months. Most notably with the Iranian presidential conflict where Twitter was the only means to deliver the latest news in the area. Now it seems Twitter is here to stay, with ubiquitous ‘tweets’ filtering into our daily lives.

This being said, Foreclosure Research has decided to jump on board. Recently we added the twitter icon and link to the navigation bar on the Web site. You don’t have to be a member of Twitter to check out our page, but being a member makes it a little more interesting. Our Twitter link is: http://twitter.com/frclsrResearch We had to shorten our name because ForeclosureResearch was too long.

Foreclosure Research tweets will be good for those readers that want to catch the latest foreclosure and media news in a somewhat extreme, cliff note’s version. Tweets can only contain 140 characters a piece, leaving them jam-packed with juicy, news-worthy information.

It seems all industries and all types of individuals have infiltrated Twitter, leaving no category unturned. In our industry- real estate, media and journalism there are reporters, newspapers, realtors and brokers all offering the latest industry news or self-promotional tid-bits. As for breaking news, those that are on Twitter are most likely to hear it first, as newspapers and TV news stations still have to make a concerted effort.

Here are some tweets from the Foreclosure Research network:

realestatefeeds: The second foreclosure wave and what it may mean: [link] RealtyTrac’s latest report shows evidence of declining foreclosures…
abc7: Lawmaker says “cash for clunkers” car sales will be honored Friday; beyond that is uncertain
nyc_realestate: RENOVATED 2BR + ALCOVE…Open House SUN 8/2 12-1pm ((OWNER MUST SELL)) (Upper East Side)
RealEstateTL: Daily Show: Tim Geithner Can’t Sell His House
WSJ: GDP Declined 1% in Second Quarter
InmanNews: News Story: Tenant uses job loss to break lease
realestatefeeds: Grant program announced for foreclosure help: Florida Attorney General Bill McCollum and the Florida Bar Foundation

According to the most recent foreclosure news articles foreclosure have once again reached record highs- now said to be in the millions. RealtyTrac’s semiannual report was recently released titled, “1.9 Million foreclosure filings reported on more than 1.5 million U.S. Properties in first half of 2009.” At least the foreclosure listing company correctly assessed the records as foreclosure filings rather than simply ‘foreclosures’ as many reporters incorrectly state.

RealtyTrac also provides some additional information in the headline, which makes our job much easier, which is specifying 1.5 million homes received a foreclosure filing rather than 1.9. In other words, for once the company was being transparent in the fact that there were roughly 400,000 duplicate foreclosure filings in the last six month.

According to the article, Florida is said to have the second highest foreclosure rate in the country. In order to gain a better understanding of the actual foreclosure or REO market it’s imperative to gather additional information such as the number of actual bank repossessions rather than simply default notices.

The RealtyTrac report states that over the last six months there have been 268,064 foreclosure filings in Florida which account for 1 in 33 homeowners receiving a notice. In order to gather bank repossessions for the last six months (which is not available in the latest report) Foreclosure Research calculated these figures from prior month’s reports. The following is a breakdown of those figures.

Florida REOs
January 5,594
February 5,972
March 4,322
April 6,114
May 6,045
June 7,367
Total: 35,414
Housing Units: 8,718,385

Based on past months’ figures, there were 35,414 foreclosures or bank repossessions in Florida. Factoring in U.S. Census housing data, this would account for 1 in 246 bank repossessions rather than 1 in 33.

One could then deduce that foreclosures account for only 13% of the foreclosure filings or 0.4% of Florida housing units. This estimate may be the reason the report does not mention REO data as the total foreclosure filings are an undeniably larger number at 268,064, presumably meant to instill shock in the readership base.

Today, July 17, 2009, marks one year since the genesis of Foreclosure Research. Our goal has been to provide informative reporting and serve as a checks and balances to the foreclosure reporting industry. Our one year anniversary further exemplifies our commitment to uncovering the truth behind foreclosure data.

Here are a few of the year’s highlights:

July 2008

• ForeclosureS.com reports a 5% increase in foreclosures while RealtyTrac reports a 3% decrease, an 8% disparity.

August 2008

• New Jersey court systems reports double the foreclosures as RealtyTrac for the same period.
• ForeclosureS.com falsely states they list over 5 million properties.

September 2008

• ForeclosureS.com and RealtyTrac report a 20% difference in August foreclosures figures.
• RealtyTrac underreports West Virginia foreclosure rates by 227%.

October 2008

• RealtyTrac states lack of coverage in rural areas with populations of 25,000 or less.

November 2008

• RealtyTrac reports 5% increase while ForeclosureS.com reports 7% decrease for the month of October.

December 2008

• Foreclosure listing company head honchos predict the 2009 housing market. Alexis McGee with ForeclosureS.com predicts a significant improvement in foreclosure rates for 2009 while Rick Sharga of RealtyTrac predicts record high foreclosure rates.

January 2009

• A reporter with the Bolivar Herald-Free Press incorrectly reports foreclosure statistic. The reporter stated 1 in 54 homeowners were foreclosed on; when in fact 1 in 54 homes received a default notice. Foreclosure Research has shown this to be a rather common reporter error.

February 2009

• ForeclosureWorld expose. Customer complaints flood Ripoff Report. Misleading foreclosure information, false pictures and various seedy practices uncovered throughout the extensive ForeclosureResearch investigation.

March 2009

• Summit County examines two foreclosure listing figures; one from RealtyTrac, another from ForeclosureFreeSearch.com. Based on official records from Summit County Recorder’s Office, figures from ForeclosureFreeSearch.com were a more accurate representation of the county rates.

April 2009

• Colorado establishes new housing bill (HB 1196) making it illegal to unitize commercial foreclosure statistics for use in public policy legislation.

June 2009

• More examples of default notices being confused for bank repossessions in the media.
• Atlanta Journal-Constitution publishes article proving RealtyTrac under reported Atlanta foreclosures rates by 100%.
• RealtyTrac representative states their reports should not be used to influence public policy while the company’s press releases tout public policy involvement.

July 2009

• ForeclosureResearch reports on a study which found 25% of foreclosures result in homeowners strategically defaulting on their mortgages despite the ability to pay.

A recent study has emerged profiling homeowners who have voluntarily defaulted on their mortgages. According to the study from Northwestern University and the University of Chicago, as many as 1 in 4 homeowners walked away from their homes, “despite the ability to make mortgage payments.”
The study titled, “Moral and Social Constraints to Strategic Defaults,” found that declining home values was a significant factor in increased defaults, surprisingly much more influential than that of job loss.
Another interesting finding was that as defaults increased, so did the likelihood that a homeowner would consider “walking away.” The study concluded this reaction was a result of a reduction in the social stigma associated with foreclosures.
It seems that foreclosures, ’strategic’ or involuntarily, are here to stay, and perhaps these homeowner profiles should be utilized more when reporting on the doom and gloom of the foreclosure crisis. Rarely do you find reports or editorials pointing out the flaws from an individual, internal perspective, and rather always see the effects due to external or economic factors.
The truth is that a majority of homeowners got into this mess without reading real estate 101. Or perhaps did not have an understanding of general market fluctuation. The number one rule in real estate is that it should be viewed as a long-term goal and not a short-term profit. This is where a number of homeowners went wrong.
Consider the study, 25% of homeowners despite being able to pay, simply did not want to make the long-term commitment. Now due to the “moral unconstraints” of flighty investors and homeowners the whole country must deal with an even larger dilemma- one where there is no easy scapegoat.

As a result of the onslaught of articles questioning RealtyTrac’s latest report, the company has offered insight into its data collection methods and its role in foreclosure data reporting. In the company’s defense, Rick Sharga, vice president of marketing, has been quoted as standing by the numbers.

RealtyTrac’s formal position regarding the Atlanta data exposé can be found in an Inman News article titled, “RealtyTrac numbers under fire in Atlanta,” published on June 23, 2009. According to the article written by Matt Carter, “RealtyTrac is standing behind the methods it uses to collect and report foreclosure-related filings, but says its reports should not be held to the same standards as statistics compiled by government agencies for the purpose of making public policy decisions.”

Interestingly enough, while the company states their data should not be used to the same standards as government agencies or for influencing public policy, the company has touted offering the data for that exact use.

In fact, a press release located directly on the RealtyTrac Web site states, “RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.”

It seems RealtyTrac has always been the first to proclaim their information is used for governmental agencies. In the very same article that initiated the latest accusatory whirlwind, a RealtyTrac spokesman, Daren Blomquist, even attested to the fact by stating that “both federal and state governments have asked RealtyTrac for its data.”

It seems that although the company knows their information is inaccurate, it still lauds the fact that the data is used by government agencies. A simple logical argument would conclude that RealtyTrac’s data should then not be used by government agencies.