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.

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?

Third quarter numbers have been released to the press with yet again many articles offering more conflicting numbers. Depending on the source of the foreclosure data, most likely readers will see a variety of figures reflecting the current state of the foreclosure market.

The first of these articles comes from CNNMoney.com titled, “81,312 homes lost to foreclosure in September.” The article published on October 23, 2008 by Catherine Clifford offers figures from Realty Trac, an Irvine, CA based listing company.

As stated in the headline, there were 81,312 foreclosures during the month of September. The article continues by stating that according to their information, foreclosures actually decreased 12% from August to September. While this figure may have been even more newsworthy for a headline than total month foreclosures, it was not given the attention it deserved and shuffled into the bulk of the article.

However, an even larger number that surprisingly was not utilized in the headline, was that pre-foreclosures, or foreclosure filings, totaled 765,558 for the entire third quarter of 2008.

On the other end of the media spectrum, there are a whole slew of similar foreclosure articles with a wide disparity in figures. One of these articles comes from Market Watch in a press release titled, “U.S. Foreclosures Index Shows More Than 107,500 Homes Lost in September.” The article written by Sofia Gutierrez provides figures from ForeclosureS.com, a competing foreclosure listing service.

The titles alone show a difference in foreclosure figures for the previous month. Contrary to the first article, ForeclosureS.com reported 107,500 foreclosures for the month of September. Continuing through the article, the decrease from August to September is also different. While Realty Trac reported a decrease of 12%, ForeclosureS.com reported a decrease of only 2.4%, both numbers reflecting foreclosure filings for the same period of time. Total foreclosure filings for the third quarter are also different. ForeclosureS.com reported a total of 561,467 filings, a difference of 204,091 total filings!

The difference in total foreclosures for the month of September is also disconcerting. The difference between total foreclosures from both foreclosure listing companies is a whopping 26,000 foreclosures! A difference of 26,000 owners losing their homes is almost as large as the amount of total foreclosures for the entire state of Florida for the entire month of September.

In statistics, a variance of nearly 25% would make the findings inconclusive. However, while the difference in foreclosure flings and total foreclosures were both 25% between companies, readers could simply use the 25% figure as a permanent margin of error when reading foreclosure reports from the usual suspects.