The Detroit News had an interesting article this morning about the much-quoted foreclosure stats published by Realtytrac. Here’s an excerpt.
“Two years ago, when RealtyTrac Inc. started releasing monthly foreclosure numbers, it filled an information void and became the self-appointed record keeper for the nation’s ugly spike in mortgage defaults.
Those numbers have been widely reported by the national news media and have been cited during congressional hearings on ending mortgage abuse.
Doug Duncan, chief economist for the Mortgage Bankers Association, said the RealtyTrac data is wrong.
“They were triple counting. What they were doing is they were recording each action on an individual property,” Duncan said. “They are damaging the industry from a public policy standpoint.”
For example, RealtyTrac reported July 11 that Wayne County foreclosure activity in June was up 17% over May. That indicates that one of every 161 households in the county were in foreclosure, compared with one of every 420 households in Michigan and one of every 704 nationwide.
In comparison, Bargain Network’s data indicated in June that one in every 877 households nationwide were in foreclosure. It counted 5,283 foreclosures in Michigan for June, compared with the 10,092 reported by RealtyTrac last month.
In Colorado, the state’s housing division started tracking its own foreclosure figures because it had problems with RealtyTrac’s count.
“RealtyTrac’s numbers are ridiculous and irresponsible,” Kathi Williams, director of the housing division, told the Rocky Mountain News in May.”
Pretty interesting. If state regulators, here and in Detroit, are right then we may not be one of the nation’s foreclosure capitals after all. It’s clear that we have a problem-but if differing methods of gathering and crunching numbers give rise to radically different results, then policymakers, bankers, elected officials, and the housing industry itself are in something of a quandary.
You can’t solve a problem unless you know what the problem is-and it looks as if foreclosure statistics are so opaque that the most basic question-how many?-can’t be anwered with certainty.