Says who?

When the Congressional Joint Economic Committee issued a recent report on foreclosures in subprime lending, many of its findings rested not on data collected by government agencies, but RealtyTrac -- the Web-based company that collects and sells information on foreclosures to real estate investors.

The report cited RealtyTrac data in warning that there were 1.2 million foreclosures nationwide in 2006 -- a 45 percent increase from the year before -- a pace that would be matched or surpassed this year.

The Joint Economic Committee is chaired by Sen. Charles Schumer, a Democrat who's laid much of the blame for the housing downturn on subprime lenders, and its report called for new restrictions including a "suitability standard" requiring borrowers to demonstrate their ability to repay mortgage loans. The Mortgage Bankers Association, which has "grave concerns" about a suitability standard ("mortgage lenders are not analogous to financial analysts" the group says), attacked the report's reliance on RealtyTrac numbers, which it estimated overstate foreclosures by 30 percent.

But the report's authors did consult with the MBA, which puts out its own quarterly reports on delinquencies and foreclosures based on a survey of its members. The surveys cover 80 percent of first-lien mortgage loans, but not nonbank, "private-label" lenders who financed many subprime loans during the housing boom.

Critics of RealtyTrac's numbers say that it's in the company's interest to inflate the number of foreclosures, because it helps it market its services to investors. But it's also been said the Mortgage Bankers Association has an interest in downplaying the impact of foreclosures to keep regulators and lawmakers from going overboard in imposing new rules on the industry.

RealtyTrac now says it will provide a state-by-state breakdown of "unique homes" in the foreclosure process to counter accusations that it's inflated its numbers by counting more than one filing for the same property as it moves through the foreclosure process (see Inman News story).

What's amazing, given the importance of mortgage lending and housing markets to the overall economy, is that there doesn't seem to be a single, comprehensive, source of information that everybody agrees is objective. Apparently, nobody wants to spend taxpayer dollars to do what the folks at RealtyTrac -- and competitors like Foreclosure.com and ForeclosureS.com -- do on a for-profit basis: compile data on foreclosures from hundreds of counties and distribute it in a timely fashion.

You could say the same thing about the secondary mortgage market, where conflicting numbers come from many sources. When Federal Reserve Chairman Ben Bernanke delivered the Fed's biannual monetary policy report to Congress, details on the issuance of mortgage-backed securities backed by subprime and Alt-A loans were compiled not by regulators, but from the trade publication Inside MBS & ABS.

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