Foreclosure filings excite media outlets
Just as it has been in recent history, low foreclosure filing numbers have traditional media outlets and misled bloggers to proclaim a sunny spot in the real estate sector.
Looking at a chart of foreclosures just for the past year, the first half of the year looks pretty healthy as the number of filings have dropped dramatically. Headlines today praised the massive drop and Twitter lit up with agents desperately trying to pass along the good news to their client followers.
Alas, the data is not a talking point or sound bite that should be painted as positive, it is an outlook that is misguided at best.
Some analysts are finally echoing our original assertion that the falling foreclosure filings are related almost exclusively with the slow down in the foreclosure process as the time to process has nearly doubled in the last year.
Same stuff, different day
We said last month when traditional outlets took the same stance and made fluff headlines, “These numbers look good, but don’t take into account why this process has slowed down. We’ll give you a hint- it isn’t because employment is any better or because consumer confidence is up. No, it’s because the big banks have kinked the hose of the flow of foreclosures in light of the robosigning debacle (where banks didn’t manually review documents before foreclosure leading to illegal foreclosures on wrong addresses, homes paid in full and various other mistakes) as many states attorneys general and federal agencies are investigating the banks’ processes, putting a hamper on how quickly papers are/were being processed.”
Yet again, outlets point to filings dropping 29% over the last year as a sign of recovery based on RealtyTrac numbers. But this year alone, 1.2 million homeowners have received a foreclosure filing with delinquencies on the rise.
Outrage at these soundbites
The reason we are outraged at the soundbites that are being regurgitated on tv, in print and online is that if you look at the chart of recent foreclosure filings and delinquencies, just compare 2011 to 2005 and you’ll see how dramatically high foreclosures are:
Toward a brighter future
Prices are falling, sales are falling, politicians are pulling each others’ hair out arguing over whether or not to require 20% be put down on all mortgages and shadow inventories loom over a crippled real estate economy. When possible to present good news, we do it proudly, but when we see bad news spun as good, we find it to be unacceptable. Thinking critically in down times helps forge the way toward a healthy future, but collectively burying our heads in the sand will most certainly stall a recovery.