TEXT OF STORY
Kai Ryssdal: There was an interesting development in the foreclosure paperwork story. Tom Miller, the Iowa Attorney General who's been leading the charge against big banks and their robo-signers, said he's set to launch a criminal investigation. "We will put people in jail" was the direct quote.
In the meantime, the latest foreclosure numbers are going to come out tomorrow from a company called RealtyTrac. There'll be headlines about how many more homes might wind up being bank-owned. Lots of discussion about what that might mean for the economy. But foreclosures aren't all that easy to get a handle on.
Marketplace's Alisa Roth has more.
Alisa Roth: When the numbers come out tomorrow, we'll find out how many hundreds of thousands of homes got foreclosure notices in November and how that compares to other months and years.
The question is how accurate those figures are. Depending on the source, anywhere from five to eight million properties are in some stage of foreclosure. Even if everybody agreed on the number, it's hard to interpret exactly how dire the situation really is. For starters, foreclosure isn't an event. It's a process.
Alan White is a law professor at Valparaiso University.
Alan White: Foreclosures take awhile. You have states where the whole process is over and done with in a month and a half. And in other states where it takes a year and a half.
The robo-signing mess means banks have frozen some foreclosures. And White says even before that, some banks were holding off on foreclosures. All of which means that many distressed properties haven't been counted yet.
But there's another more basic problem. Unlike, say, unemployment or Gross Domestic Product, there is no official foreclosure figure. The Mortgage Bankers Association keeps some stats. So do government housing agencies Fannie Mae and Freddie Mac, but probably the one we hear the most from is an outfit called RealtyTrac. RealtyTrac is mainly a website that lists foreclosed properties for sale. But it also releases data that includes everything from the first warning a home owner is behind on payments to the notice the bank has repossessed the property, which is sometimes called an REO.
Rick Sharga is a vice president at RealtyTrac.
Rick Sharga: So in the RealtyTrac database, we have the initial notices of default, the notices of sale and the REOs. We collect those largely manually in county recorders offices, county courthouses, tax assessors offices in 2,200 counties across the country.
Sharga says RealtyTrac has the most up-to-date statistics around. But the company's been called out for overstating the foreclosure problem. Because it reports each step in the foreclosure process, RealtyTrac may overcount some homes in the short-term. On a single house, the notice of default could get counted in October, the notice of sale in November and the actual bank repossession in December. And each of those would appear on the corresponding monthly report.
Sharga says RealtyTrac has improved its analysis, so it strips out double- or triple-counts on the same property.
Sharga: So that over a set period of time, we only count the property once, no matter how many times it gets a foreclosure record or a foreclosure notice.
But there's still a time lag. So most of the duplication doesn't get fixed until RealtyTrac's quarterly reports -- which don't get nearly as much attention in the press as the monthly reports do.
Andrew McCulloch is an analyst at Green Street Advisors, it's a company that provides real estate research to investors. He says he uses data from RealtyTrac -- plus numbers from the Mortgage Bankers Association, Fannie Mae and Freddie Mac and other places, too.
Andrew McCulloch: We don't take any one of these single sources as gospel.
McCulloch: What we try to do is combine and interpret what they're all saying at any given time or over a certain time period.
Something to think about when you hear those foreclosure numbers tomorrow.
I'm Alisa Roth for Marketplace.