One of today's big stories is the jump in July foreclosures, as measured by the Irvine-based firm RealtyTrac. It's important to mention where the numbers are coming from because RealtyTrac's data has been under fire for being, well, exaggerated. Just what we need in these overheated times - an overheated report on foreclosures. As noted a few months back, the government does not track any aspect of the foreclosure process, so several private firms are left to post their own numbers, based on their own methodologies. And they're all over the map. RealtyTracís numbers have been higher than anybody else's because it counted every step in the foreclosure process separately, which means that the same property could be listed as three, four or even more times.
Faced with such criticism, they've revised the formula this month - and still the numbers are high. California foreclosure filings totaled 39,013 in July, up 289 percent from a year earlier. The state led the nation in foreclosures for the seventh consecutive month. (Nevada documented the nationís highest state foreclosure rate for the seventh month in a row, one foreclosure filing for every 199 households.) Six California metro areas reported foreclosure rates among the nation's top 10: Stockton; Merced; Modesto; Vallejo-Fairfield; Riverside-San Bernardino and Sacramento. (Here's the press release.)Clearly, foreclosures are way up - it's just how way up they are. The distinction is important at a time when investors are chomping on whatever bits of data they can get their hands on. From Bloomberg:
"We are estimating that we will see about 2 million foreclosure filings [nationwide] this year,'' said Rick Sharga, RealtyTrac's executive vice president for marketing. ``We honestly don't see it getting much better before it gets a little bit worse.'' RealtyTrac's report includes properties in all three phases of foreclosure. The process begins when a borrower defaults on loan payments and the lender files a public default notice, called a notice of default or lis pendens. If the borrower doesn't make monthly payments after that time, the property goes to auction. The third phase begins when the lender takes ownership of the house, also called REO, or ``real estate owned.''