What you weren't told about November's foreclosure numbers

"Figures don’t lie, but liars sure can figure."

This quote by Mark Twain has never been more relevant than in our day. With contradictory statistics bombarding us daily, a thinking person has to wonder what’s real and what is a lie.

Let’s do a real life example. In November there were 29,597 Notices of Default filed in the state of California. In October there were 36,531. Now suppose you see a news report that reads “Foreclosure filings drop 19% in November, another sign that the recovery is well under way.” Is that true?

Well the first thing is that the article writer has an obvious agenda, that of convincing you that a recovery is well under way. News reporting should be objective, meaning that reporters should not draw far-reaching conclusions from one data point. The second thing is that the statistic itself is a lie.

Do the math and you will see that there were 6934 less Notices of Defaults filed in November than October, and then divide that by 36,531 to see that the number is indeed 19% less. So how is it a lie?

Well here’s what you weren’t told - there were only 18 recording days in November versus 22 in October! The lower total in November was due to the difference in the number of days documents could be recorded and NOT fewer filings each day. 36531/22=1660 per day for October and 29597/18=1644 per day in November, a difference of only 1%.

So please be very skeptical about what you see in the news. To get the facts today you have to avoid the slanted reporting and do your own research. One source that I use is Foreclosure Radar (www.foreclosureradar.com). According to their December newsletter, “The simple reality is that homeowners are continuing to enter foreclosure faster than they are coming out. This will likely continue until we see meaningful progress on loan modifications, or the often predicted “foreclosure wave” finally occurs.”

The banks' solution to the mortgage crisis these days is to "amend, extend and pretend." This video talks about "shadow inventory", "strategic default", and from the street predictions about 2010.