Foreclosure Numbers Often Mislead

It is being reported that more than one reliable company tracking foreclosures is going off the tracks. The numbers are all wrong. In one such instance 2,000 properties in Georgia were counted twice. It is true that Georgia does face acute foreclosure problems but the numbers have been overestimated. The company admitted that instead of it being a 14% rise they had miscalculated a 75% increase! Other tracking agencies are also admitting to wrong methodology but adding at the same time that although not perfect they are trying to make it so in future. Investigations are on to find out whether it is the same story in other states.

The problem seems to be connected with a new data provider. Even once before the method of calculations have been questioned. Nevertheless one of the online trackers is the main source for reference and even the Congress quotes their foreclosure figures. This is because there are none others in the fray who hunts up local details. Few have taken on this onerous task. Even the Federal Reserve, the Federal Deposit Insurance Corporation and FBI depend on their foreclosure quotes. In this jumbo size mess up everybody is groping in the dark for specific facts and figures.

No government agency collects national foreclosure statistics. The Mortgage Bankers Association reports only 80% of the mortgages and does not give separate break ups about state figures. Some surveyors rely on credit files and lender surveys to draw conclusions. This has led many to question the viability of the media and lawmakers relying too much on one online company. The overestimation is bound to lead to over-reaction says Mortgage Bankers Association’s spokesperson. Another economist is of the strong view that the government should have its own tracking gear without which sound policies just cannot be formulated to tackle the foreclosure virus. Lawmakers should not rest with straight tally records – they should know what types of loans are failing and who are the borrowers connected with these loans.

The online tracking company defends itself that massive foreclosure data is being collected from thousands and thousands of courthouses and publication reports. It is a challenging work and might very well have shortcomings. 50 different states are being dealt with. Each has different foreclosure laws. The point is that foreclosure is not a mere event but an ongoing process with many steps.

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