Realtystore.com recently issued a press release for notices of trustee sale (NTS) in Oregon for January 2010. This particular press release was peculiar as Realtystore.com issues very few if any press releases. Adding to the peculiarity was that the press release was for the state of Oregon, which has a relatively low foreclosure rate.

According to the press release, RealtyStore.com reported 1,413 notices of trustee sale for the month of January. This is up 42% from the previous year.

Now that RealtyStore is seemingly willing to partake in the foreclosure reporting media madness, it was up to Foreclosure Research to compare those figures to other, more notable listings services.

The task to find RealtyTrac’s notice of trustee sale listings was fairly easy as they categorize and display their distressed property notices. According to RealtyTrac’s monthly foreclosure analysis there were 3,336 notices of trustee sales issued for Oregon in January 2010.

This is a difference of 136% between RealtyStore.com’s figures and those of RealtyTrac’s

To get a better idea of both companies’ purported figures, Foreclosure Research requested a custom report from competitor foreclosure.com.

According to the custom foreclosure report by foreclosure.com there were 2,679 unique properties, and a total of 3,794 overlapping properties (duplicate data). While the company had the duplicate listings recorded, these were easily filtered out when it came to a statistical report and analysis.

Perhaps it may not be necessary to point out how close RealtyTrac’s figures are to foreclosure.com’s overlapping property results.

Below is the summary:

While perusing through Yahoo! Real Estate one particular property stood out. A 3/2 home on a 5-acre property in Fort Myers, FL for a steal of $100,000. The property was a preforeclosure listed by RealtyTrac.com, but a buyer would have to read the description to see that the home was in fact a Lis Pendens notice and not a typical foreclosure. What stood out front and center in this particular listing was the price, as shown in the image above. This raised a red flag for a couple of reasons. One, many preforeclosures do not have prices because technically they are not for sale. Two, the priced seemed quite low even for a distressed home.

Upon further research I found the property listed for sale on the Gulf Coast Associates Realtors Web site. According to the Web site, the property was listed on the MLS for $365,000 as a short sale. In a short sale, the price listed is usually significantly lower than the amount owed on the loan. That is at least a $265,000 difference in price between the two listings. See image below for the listing details.

The listing on Yahoo! is a little deceiving seeing as they have listed what seems to be only one mortgage amount as the price. In order to compare I checked rival foreclosure.com to see if they list the preforeclosures in a similar fashion.

The same preforeclosure property was in fact listed on Foreclosure.com. The first thing I noticed on the search results for preforeclosures in any given county was that none of the properties list a price (as opposed to RealtyTrac search results which do list prices). As mentioned previously, that is actually more of an accurate way to display the properties as to not lead to the confusion found on the Neal Road property. Once on the property details page, under “loan information” users will see specifically a 1st mortgage amount for $100,000 (refer to image below). This information is helpful because the user knows that there is at least one mortgage and the site does not list that 1st mortgage amount as the price.

According to a recent article published in the Los Angeles Times, an assistant economics professor identified a mysterious charge that stemmed from the foreclosure listings site, RealtyTrac. UCLA Assistant Professor Maria Casanova discovered a $44.95 charge eight months after she canceled her RealtyTrac subscription.

Only through further investigation involving her bank did Casanova discover the charge stemmed from the RealtyTrac registration, where she unwittingly hit an orange “continue” button. According to a RealtyTrac representative the continue button was for an additional product for a completely separate company, Real Estate Promoter.

The article discusses the deceptive nature of the button, where it explains that a button stating ‘continue’ would be easily construed as the way to continue registering for the original service.

The article continues, “Unless you read the fine print, which consists of gray letters on a gray background, you won’t know that clicking continue will in fact sign you up for Real Estate Promoter’s service at a recurring cost of $44.95 a month.”

Undoubtedly this was the case with Casanova’s experience as she is quoted in the article as stating, “I was completely unaware that I was signing up for this other company,” she continues, “I thought the whole sign-up process was for RealtyTrac.”

As for the extraneous charge, Casanova contacted Real Estate Promoter to inquire about what it was she had in fact purchased. According to the article the company “had set up a house-hunting website on Casanova’s behalf and was billing her monthly for its use.”

Casanova, still confounded by the whole situation, explains that the company had failed to even send her information regarding this service and that she “wouldn’t even know where to find this website.”

It looks like Casanova is not alone. According to the article, a Google search for Real Estate Promoter lists numerous, similar complaints, “in virtually all cases, as a result of signing up for RealtyTrac.” If you also google RealtyTrac Ripoff Report you can also see 257 returned results, many of them are related to these types of issues.

While this may be an all too common practice among some online retailers, this should serve as a caveat as buyers should keep a sharp eye out for any covert, orange continue buttons.

The property on Zillow was a Foreclosure.com property listed at $39,900. See picture below.

With further investigation, the property, located at 145 Stoneybrook Road in Pacolet South Carolina 29373 was in fact listed on both Foreclosure.com and RealtyTrac.com priced at $39,900 and $2,500 respectively.

See RealtyTrac below

See Foreclosure.com below

In order to find out which service was correct, Foreclosure Research contacted the agent, D. Fowler, who verified the correct price at $39,900.

In conclusion, the property listed on foreclosure.com contained the more accurate information of the two.

One of the main complaints within the foreclosure listing arena is a lack of accurate data. It’s good to see that at least one company offers accurate information.

The report specifically describes concerns over RealtyTrac figures. Here is a snippet of the report:

RealtyTrac presents data for approximately 2,200 counties across the United States. This excludes roughly 900 counties, most of which are predominately rural. RealtyTrac does not openly disclose its methodology for data collection; however, company representatives indicated that they generally do not collect data for a county if it has less than 10,000 housing units (RealtyTrac 2008a). The company has reportedly improved its quality control measures; however, duplicate and multiple counting of foreclosure entries is a particular concern when citing RealtyTrac data (Galvin 2007). Limitations related to over representation in some areas (namely urban), and under-representation in others (primarily rural), indicate substantial concern when trying to derive rural foreclosure estimates from RealtyTrac data.

Report References:
Realty Trac -a. Telephone discussion with ReatlyTrac representative, Mike Smith. July 25, 2008.

Galvin, Andrew. “Tracking the Truth on Foreclosures,” The Orange County Register. November 18, 2007.

It looks like the foreclosure giant RealtyTrac has laid off a considerable number of employees within the last month. According to Inman News “RealtyTrac has trimmed its workforce by nearly 30 employees and is moving away from some media partnerships.” The layoffs comprise roughly a quarter of its current workforce.

According to Hitwise, an online metrics company, the company has exhibited a steady decrease in traffic over the last few months. The company also moved down in the rankings to 18 from 10 for overall online real estate popularity.

In the article Senior Vice President Rick Sharga explains, “We’ve been in some media deals that weren’t profitable.” He continues, “They were delivering traffic, but not profitable traffic.”

Considering these “media deals” it is no wonder why the media relied heavily on their figures in many of their articles. Certainly being a deep-pocket sponsor for the media outlet had some pull with reporting content as well.

Now that these media deals have proven unsuccessful, perhaps the media will become more diversified in the figures it reports. Or better yet, RealtyTrac will now focus more on accurate data collection methods- the basics of a foreclosure listing company, rather than over-leveraging the brand.

According to a revealing article in the Hartford Courant, RealtyTrac “radically” revised its total Connecticut foreclosure filings for the month of June. The article published on August 15, 2009, written by Kenneth R. Gosselin, states that the company first reported an 80 percent decrease in foreclosure filings when actually there was an increase of 31.5 percent.

The original numbers were revised due to further investigation by Courant reporters following the surprisingly low level of filings originally reported by the foreclosure data company.

RealtyTrac first reported only 56 foreclosure filings while the revision claimed 991. That’s a head-turning difference of 1,670 percent.

In the article Darren Blomquist, a RealtyTrac spokesperson, admitted that the subscription-based company was having trouble with data collection in Connecticut. Yet it seems the company still continues to issue formal reports on Connecticut and other coverage-lacking areas.

In the past RealtyTrac has admitted to inaccurate data in some rural areas, specifically counties with less than 25,000 in population, but according to the US Census, all of Connecticut’s counties have well over 100,000 in population.

Which begs the question, “is it really just rural areas? Or perhaps smaller, less-important states are also denied the accurate reporting they deserve?

There really is only one solution, and that is to have some governmental control over foreclosure statistics in the media. If this were the case, at least the government grasps the concept of equal representation among the fifty states of America. In addition, the government would be less concerned about selling subscriptions in heavily foreclosed areas, which is obviously the main focus of the foreclosure listing company in question.

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.

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.

Foreclosure Research was one of the first online publications to report that RealtyTrac numbers had yet to show much improvement from previous years’ allegations of inaccuracy.

There have been a whole slew of news articles pin-pointing current data discrepancies from the listing provider. The first of these coming from the Atlanta Journal-Constitution published on June 21, 2009, titled “Foreclosure numbers don’t add up.” Author Carrie Teegardin assessed that RealtyTrac actually under reported foreclosure notices for the month of April by almost 4,000 filings, a disparity of nearly 100 percent.

The AJC concluded the difference following an analysis of newspaper records for five metro Atlanta counties. Because Georgia is a non-judicial state for foreclosures, there are no court records on the proceedings.

The article offered an excerpt from a local foreclosure expert, who described Realty Trac’s method as “not scientifically rigorous.”

Another issue that has been noted by Foreclosure Research in the past is the lack of coverage in rural areas. Teegardin notes that in Georgia, Realty Trac “reported that April’s foreclosure tally represented a 21 percent increase over the previous year. But the company made no adjustment for the fact that it collected foreclosure data in about 100 of Georgia’s 159 counties last year but expanded to statewide coverage this year.”

Daren Blomquist responded by stating, “We don’t believe it makes any significant difference in the percentage change,” regarding the tallying of additional counties.

If this were the case, let’s do some quick calculations under this supposition.

According to the most recent report 1 out of 377 homeowners in Georgia received at least 1 foreclosure notice in May. You could then apply this figure to the areas that are not counted or at least were not counted last year.

Sample average for rural populations in Georgia*: 13,557. 35 foreclosures per county times 59 counties not counted, equal an additional 2,121 foreclosure filings per month.

April 2008
7,136 Notice of trustee sales plus 2,050 REOs, plus an additional, estimated 2,121 = 11,307 total.

April 2009
7,809 Notice of trustee sales plus 3,712 REOs equals a total of 11,521

Considering this information, Georgia foreclosures only increased 1 percent from April 2008 to April 2009, not 21 percent. If you ask me, this is a very ’significant change’ and perhaps this article can serve as a lesson on how the company can improve upon its scientific rigor in the future.

*Sampling average taken from counties with less than 25,000 in population.