Call this a textbook example of how some in the media cast things in the worst possible light.
On November 14, the three major network newscasts made their routine monthly downbeat foreclosure report, based on RealtyTrac foreclosure data. RealtyTrac has become the go-to source by the news media for foreclosure data.
But on that night, one network (ABC) interpreted the data differently from the others about Stockton, Calif., the city with the nation's highest foreclosure statistics. "NBC Nightly News" and "CBS Evening News" reported 1 in 31 homes were in foreclosure and ABC "World News with Charles Gibson" reported 1 in 49 homes were in foreclosure.
According to RealtyTrac's Rick Sharga both numbers were "technically" correct, but the ABC report used the number for "unique household" – making its report more accurate.
"The NBC number was based on the number of total foreclosure filings compared to the number of households," Sharga told the Business & Media Institute.
On the other hand: "The ABC number was based on our ‘unique households' count, which covers the number of properties which received at least one filing during the period. Since there are always more total filings (since some households get more than one during the period), but a static number of households, the foreclosure rate will vary depending on which count you use."
The distinction between unique homes in foreclosure and foreclosure filings was not stated in any of the three reports.
Sharga also told BMI the rankings are "remarkably similar" depending on if cities are ranked by "unique filings" or "foreclosure filings."
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But They Still Haven't Answered The Real Question
November 16, 2007 - 19:48 ET by Junk Science SkepticAs compared to what?
Ever absent from liberal canards, context makes all the difference.
Yes, the unique households count is the only accurate number, but how does the statistic of 1 in 49 compare to any other timeframe.
What was the rate during those economic glory days of the Carter administration? What was the rate when California was booming in 1999 after Gore invented the internet bubble?
Are we to assume that there were never any foreclosures at all before the evil Bush regime enabled more people to own homes than at any previous time in history?
When an unprecedented increase in home ownership occurs, an increase in foreclosures is unavoidable. The screening process isn't perfect, and marginal borrowers were a known risk.
The last I heard, nationally, less than one half of a percent of all mortgages were classified as problematic, say nothing of the much smaller number that are actually in foreclosure. If that number is still correct, that means that 99.5% of all U.S. mortgages are doing just fine. Heck, even Ivory Soap isn't that pure.
The statistic for Stockton was obviously cherry-picked to make a point, but when you look at the national numbers, anything in California is going to be an anomaly.
The 100-300% increase in California home values over the past few years was based on nothing but vapor and ignorance, by borrowers and by lenders. When reality sets in and a 3% APR mortgage on a property that's financed for twice what it's really worth adjusts up to a 6% APR (which is still historically low) mortgage, people are going to default.
Knowing the realities of the California real estate market, I'm shocked that the default rate is actually that low. The 1 in 49 statistic means that just over 2% of Stocton's homes are in foreclosure. Given the hot air in the California market, I wouldn't be surprised to see that number at 25-30%.
But again, without context, we've only heard propaganda, not news.
The MSM was unsuccessful at losing the war in Iraq, so now the best tool they have to throw the '08 election is the economy. Just as the MSM was key to creating the economic bubble in the late 90's, so too are they likely to succeed in talking the economy into a bust between now and the election.
Thompson/Giuliani 2008
Heap on the dire news.
November 17, 2007 - 02:26 ET by jdhawkHeap on the dire news. The more the better. This will encourage the Federal Reserve to continue to lower the Fed Funds rate in Dec.
Right now the chance of a rate cut is 50/50.
A 25 basis point cut will bring the rate down a full point since the Federal Reserve began cutting in September. This will help those on variable rate mortgage loans in that there will be less resets that drive up their costs. As mortgage loans in foreclosure decrease, the underlying assets that are a part of the asset base of finanical institutions will not have to continue to be written down like they have been in recent months. Thus, the while individual homeowners will be saved possible bankruptcy, financial institutions will also see their balance sheets recover and profitability and share price as well.