Ok, not really, but the headlines covering 2009 foreclosures may as well have purported such a figure. CNNMoney.com offered an article titled, “Record 3 million households hit with foreclosure in 2009.” The article written by Les Christie and published on January 14, 2010 seemingly reports three million foreclosures last year or at least that’s what the headline reads.

Let’s hope visitors to the site at least read through the first paragraph which states, “Almost 3 million homeowners received at least one foreclosure filing during 2009.”

Even more so, let’s hope that these visitors read through the fourth paragraph which offers even more insight. The article states that while foreclosures FILINGS were at record highs, that actual bank repossessions, or what people in the industry like to call ‘foreclosures’ only increased 1% from 2008 figures. According to RealtyTrac and other foreclosure listing companies the average total remained under a million foreclosures.

In other words a more accurate headline would have read, “2009 foreclosures less than 1 million.”

Call me crazy, but the information provided in the fourth paragraph seems much more considerable than the headline and subsequent introductory paragraph. As ForeclosureResearch has disseminated in the past foreclosure filings should not be utilized to give an accurate interpretation of foreclosures or bank repossessions on a per household basis. Many times a single homeowner will receive up to 3 notices or filings. Also, many investors defaulting on a number of houses each receiving up to 3 notices a piece does not accurately depict the average homeowner.

States across the country should take an initiative similar to Colorado and gain control of their foreclosure statistics. In the meantime someone please send a memo to Christie containing the definition of foreclosure.

Despite the fact that most foreclosure listing companies reported a nationwide decrease in foreclosures and default filings, the media offered headlines donned with the usual negative perspective.

RealtyTrac seems to be the only major listing company that offered statistics for August. The foreclosure listing company reported a 1 percent decrease in filings with a 13 percent decrease in repossessions. ForeclosureS.com didn’t offer a report for the month presumably because they found an increase in fillings, as they have historically reported larger number of properties in foreclosure.

Here are some of this week’s headlines:

From the Washington Post: “Foreclosure Filings Were Flat in August.”
The Post chose to use the lower valued decrease (1 percent) of filings as opposed to actual repossessions.

From CNNMoney.com: “Foreclosures: The struggle continues.” While the article states the decrease in the 4th paragraph, the major premise was that pre-foreclosures, although also having exhibited a decrease, may continue to creep back.

Los Angeles Business Journal reports: “RealtyTrac: California ranks 3rd in August Foreclosures.” This ranking down from second which should have been stated in the headline as the more important statement.

From the Columbus Business First BizJournal: “Ohio’s August foreclosures nudge up.” This nudge refers to the 3 percent increase from July. July happened to show a 15 percent decrease. In other words a 12 percent decrease since June.

Boston.com reports: “Foreclosures still high, even as economy brightens.” The article does not even mention the 13 percent decrease.

From the Financial Times: “US foreclosure flings remain near record high.” This article also has no mention of the 13 percent decrease in repossessions, only that “foreclosure activity among US properties slipped last month for the first time since May.”

Within the first 15 articles on a Google News search only one article mentions the national decrease. This comes from the Philadelphia Inquirer, “Foreclosures dip from July number.” However, you won’t find the larger decrease of 13 percent until the 9th paragraph.

In order to boost morale the media outlets should put a little more consideration on highlighting the upside of the economic situation.

The first half of 2009 foreclosure reports continues to trickle in. Coming as no surprise to readers of Foreclosure Research, the reports have their variances in outcomes- some of these variances greater than others.

The latest report is comprised of figures from ForeclosureS.com who is no stranger to the media spotlight. The report was published in the Orlando Business Journal on July 9, 2009 titled, “Fla. Ranks No. 2 in foreclosures.”

According to the article, ForeclosureS.com reported 256,133 filings between January 2009 and June 2009. As for bank repossessions, ForeclosureS.com reported 53,548.

Meanwhile, according to the recent Foreclosure Research post, http://foreclosureresearch.com/2009/07/florida-foreclosures-the-real-breakdown/ “Florida Foreclosures: The Real Breakdown,” RealtyTrac reported a much different figure. According to their first-half of 2009 report, there were 268,064 filings and only 35,414 bank repossessions, or actual foreclosures. The difference? A whopping 18,134 homes, or a 51% deviation. A breakdown of the figures can be seen below.

Florida: January- June

Repossessions
RealtyTrac: 35,414
Foreclosures.com: 53,548

Difference: 18,134
51% deviation

Foreclosure Filings
RealtyTrac: 268,064
ForeclosureS.com: 256,133

You be the judge of what is going on here. Are they pulling these numbers out of their hats for the press in order to drive people to their websites? It looks like that way to us at Foreclosure Research.

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

Looking back on the last six months of 2009, foreclosures have seen their share of increases, decreases and record highs- or at least depending on who you ask. This inconsistency leaving the country to wonder what lies ahead for the economy. Many economists and real estate experts predict foreclosures will increase to highs greater than seen in years prior, while others predict a softening.

One thing is certain. The media has made it quite apparent that the worst is yet to come, highlighting reports of heightening foreclosure filings, or notices of default. What hasn’t been reported is the fact that REOs, bank repossessions, foreclosures, fully-defaulted properties, and all other variations of the word have decreased over the last nine months.

This is a great sign. While it is unknown whether one factor is directly correlated to the decrease in actual foreclosures, most likely it is a combination of all efforts.

In homage to president Obama, let Foreclosure Research be the first to announce “there is change” coming to the real estate market.

More Q2 reports of apparent foreclosure records are hitting the media, with some of the most misguided reporting seen yet. Surprisingly, the particular article under scrutiny comes from Reuters, one of the most respected news wires in the world.

The article titled, “U.S. foreclosures jump to record high,” written by Lynn Adler, is a prefect example of the media’s tendency to report on “doom and gloom” or worse yet, give heed to more dramatic suppositions.

The headline, “U.S. foreclosures jump to record high” leaves out a rather important fact. According to the article the record comes from an increased amount of foreclosure filings- or default notices. As Foreclosure Research continues to point out, these filings should not be considered FORECLOSURES. The title makes a blatant error of this.

What is worse is the fact that four paragraphs down where the low-priority information is located, comes the most important observation of all; that “bank repossessions, know as real-estate owned or REOs, fell on a monthly and annual basis to the lowest level since March 2008.” So perhaps a more accurate, less polluted headline would have read, “Foreclosures (the proper use of the word) decreased to lowest levels since March 2008.”

Another interesting observation is how the statement expands on all the synonyms of REO except for its most pertinent one- FORECLOSURES.

The Plea:
A note to all reporters; given the state of the economy please be more accurate when reporting on foreclosures. Also, be sure to inform yourselves on the foreclosure process and the meanings of all its word associations. Most importantly, try using the good news in the headline for once.

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.

It looks like the December foreclosure figures were overshadowed by reports of an 81 percent increase in 2008. Just a quick analysis shows that those figures should have been given a little more priority by media outlets as many states reflected a decrease or very slight increases in filings for the month, a great sign in the midst of a bedraggled economy.

In fact, there was only a trickle of articles mentioning a decrease for the month of December, at least according to recent headlines. Most continued to report increases in their perspective city or sate.

According to reports, some of the states that showed a decrease or only slight increases in foreclosures filings include:

Colorado, Connecticut, DC, Florida, Georgia, Indiana, Kansas, Maine, Michigan, Mississippi, Montana, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Washington, Wyoming.

While many of the states mentioned normally have relatively low foreclosure rates, there are a couple states that are worth noting.

The first of these is Florida. According to a recent report published from a foreclosure listing company, Florida has a total of 7 cities listed in the top 100 U.S. metro foreclosure areas. All of these cities appear in the top 25. Given the recent December figure of only a 3 percent increase, one would assume that this would be newsworthy, but apparently this is not the case.

A couple more states that should have received some attention on the foreclosure front are Michigan and Ohio. These two states have 2 and 6 cities, respectively, on the top 100 U.S metro foreclosure list. Michigan foreclosure rates in December decreased by 7 percent. With some of its cities gaining national attention for its economic strain, this figure certainly should have made a more prominent appearance in the press.

As for Ohio, with its six cities in the top 35 of the list, it also reflected a decrease. Ohio foreclosures decreased over 12 percent in December from November. Again, there were no articles reporting the decrease.

With third quarter reports still trickling in, foreclosure research agencies continue to take varying approaches to how their foreclosure numbers are reported. One method is no less confusing that the next, especially when confounded with reporter bias.

Take the latest foreclosure statistics article published on December 5, 2008, from the website, CNNMoney.com. The article is titled, “Foreclosures soar 76% to record 1.35 million,” and is written by Tami Luhby. The article offers a totally different approach to presenting foreclosure statistics by providing the ‘default rate’. The ‘default rate’ is not to be confused with the rate at which foreclosures increase or decrease from one period to another, but rather the rate at which all borrowers have foreclosed or defaulted on their loans. This method is less popular throughout the media and may lead to confusion for readers (even experts!).

In addition to a confusing use of the rate of default, the article also confuses the process of foreclosure with actual foreclosed homes. For example, the article mentions that “1.35 million homes were in foreclosure in the third quarter.” The article continues by saying those figures drove “the foreclosure rate up to 2.97%.”

The problems lies in the fact that the article makes it sound as if there were 1.35 million pre-foreclosures “driving up the foreclosure rate,” when in fact these may be actual foreclosures- or is it pre-foreclosures? Who knows, readers may have already given up on the article by the first paragraph.

The only way a reader would know that the actual rate of loan defaults (not foreclosures) is if they continue reading to the next paragraph, which states that “the number of homeowners falling behind on their mortgages rose to a record 6.99%.” Again, this leads to more confusing figures. Recent articles show that foreclosures have decreased by 7% in the third quarter while this article states that pre-foreclosure rates have rose to 6.99%.

The article offers one last piece of confusing evidence. It states that the figures in the article are provided by the Mortgage Banker’s Association and the figures represent about 85% of all mortgages. Now, this is a problem on its own. Why even bother with a default rate of any kind if it is just a sample of data?