Businessman faults foreclosure statistics

Brad Geisen, founder and president of Internet-based Foreclosure.com, hosted a conference call with journalists to slam the methods by which most of his competitors tally mortgage defaults.

Most interesting were the statistics from the South, which includes Florida. Geisen said genuine foreclosures, which he defines as homes confiscated by the bank, are down 19 percent year over year.

(Preforeclosures, a category that usually counts homes at least 3 months behind on their mortgages, are still up considerably the past year).

Geisen reminded journalists that the alarmist foreclosure statistics published in most newspapers exaggerate by counting as a separate "foreclosures" every lien against a single property.

He cited a March 6 Mortgage Bankers Association report that said 2.04 percent of all loans are in foreclosure. Is that bad? Not for Geisen. He said banks hold an emergency reserve to cover them if 5 percent of loans fail.

Geisen was a bit more optimistic than I would be.  He assumes we've reached market bottom and that most of the good real estate deals will be gone by the November general election.

Keep in mind he was speaking mostly about the national real estate market, although he did cite Florida a couple of times. 

Comments

Wow. Did he not mention that banks were losing their collective rears on short-sale losses? Obviously, many actual "forclosures" (as he defines) are averted by that method. A short sale should be considered a failed loan with a prorated value with regard to the overall "failed" stat.

[Florida - Paradise Lost]

He's got issues? I've got issues with his arguments:

1. He is out of his mind if he thinks real estate is going to level off by the end of the year. Just take a look at what happened in Japan - their real estate bubble popped in 1990, and they've still yet to recover. The same cause (overextension of credit for speculator-driven asset prices) will have a similar effect.

2. As mentioned by James, it's difficult to paint the picture with one brush. While the rest of the country did not experience a tremendous increase in prices since 2002, the 4 "Bubblicious" states (AZ, CA, NV, FL) that did are going to feel much more pain and will take a great deal longer to end the decline. Within that subset, recovery will be even worse for CA and FL due to the first-time buyer's penalties for taxation. Finally, FL and NV also have it worse, because the 2nd leading employer in both states is CONSTRUCTION. The pyramid effect of job creation fueled by people moving to each of these states has now crumbled under their own excess.

Cheers!

[Fuzzy Bear]

The best way is to search records for Liz pendez at the court house for each local area.

That will tell you the true numbers.