Homes toll uncertain

The Baltimore Sun

Gov. Martin O'Malley's foreclosure task force used a sobering statistic in its new report: The number of foreclosure events in Maryland, it said, is up 344 percent from last year.

Maryland's auctioneers say that's nowhere near what they're seeing.

Alex Cooper Auctioneers Inc., Harvey West Auctioneers LLC and Express Real Estate Auctions, which handle the vast majority of foreclosure sales in the state, provided numbers to The Sun that show they together had 48 percent more foreclosure auctions scheduled in the spring than a year earlier, the same time period noted in the task force's report last week.

The increase reported by the task force - which relied on data from widely cited RealtyTrac Inc. - was exaggerated by sharply underestimated numbers for last year, the auctioneers say.

In fact, no one seems to know precisely how many homes are being lost to foreclosure in Maryland's counties. No numbers are at once completely reliable, regularly collected and publicly available.

That makes it hard to understand the true scale of a problem that can depress property values, the health of neighborhoods, even tax collections, and prolong the housing slump by adding to the glut of unsold homes.

Researchers say important questions - such as which counties are seeing the biggest increases, which lenders are most aggressively taking back properties and how many homeowners save their houses only to lose them later - are going unanswered.

The vacuum of information is especially troublesome at a time when political leaders and advocates are proposing various remedies. The General Assembly is expected to take up the issue of foreclosure reform when it convenes next month - prompted in part by RealtyTrac's numbers.

RealtyTrac, a California-based provider of foreclosure information, concedes that the increase in Maryland foreclosures probably isn't as steep as reported. Spokesman Rick Sharga says Maryland "is one of the more difficult states" for foreclosure data collection.

"Data collection is a problem," said Robert Strupp, who chairs the enforcement committee of the Baltimore Homeownership Preservation Coalition. The group secured funding from several major nonprofit groups for local foreclosure research, a preview of which will come at a forum in Annapolis today.

"We're all struggling with this," agreed Steve Silverman, chief of the Consumer Protection Division for the Maryland attorney general. "I'm not aware that anybody is suggesting that we don't have a present and growing foreclosure problem in Maryland. ... It's just, getting the hard numbers is an issue."

The federal government, which issues reports on everything from inflation to job creation, doesn't track foreclosure activity. The closest you can get to the source is calling the auctioneers - or visiting every county's circuit court, where lenders file to start foreclosure proceedings.

Even the scheduled-auction numbers aren't a good measure for how many people are losing homes. In Alex Cooper's case, seven out of 10 this past spring were canceled before the sale.

The task force, chaired by the state secretaries for housing and for lending regulation, is not the only state body to rely on RealtyTrac. Maryland's lending regulators and housing officials have also turned to the company's data in the past.

RealtyTrac statistics have been quoted by media outlets across the country, including The Sun. But the company's data collection and methodology have come under more scrutiny this year after Colorado housing officials complained that some properties were counted more than once, inflating the total. Colorado now does its own count every three months.

In Maryland, auctioneers say they're seeing the opposite: "They're underreporting considerably," particularly last year, said Paul R. Cooper, vice president at Towson-based Alex Cooper Auctioneers. He said he is frustrated that a task force report with recommendations about legal reform was based on what he termed "bogus statistics."

The report itself noted - in the appendix - that the Maryland Bankers Association questioned the RealtyTrac numbers showing a 344 percent increase in the April-June quarter over the comparable period last year. The group cited numbers from the Mortgage Bankers Association, which point to a 64 percent increase in the foreclosure rate. The bankers track homes in the foreclosure process, not those foreclosed upon.

Massoud Ahmadi, director of research for the state Department of Housing and Community Development, who analyzed the RealtyTrac data for the report, said he could not comment on the auctioneers' numbers because he was not familiar with their data. But he added that he feels comfortable with RealtyTrac's numbers.

Sharga, the RealtyTrac spokesman, said the company warned Maryland officials when it began providing free information to them that there could be issues with the numbers.

RealtyTrac improved its coverage of Maryland bank repossessions this year, which means some of the reported increase in foreclosures is probably because of undercounting last year, he said. On top of that, he said, it's hard to get an accurate tally of court filings here.

To Ahmadi's knowledge, there are only two free and regularly released sources of foreclosure data: RealtyTrac and the Mortgage Bankers Association. The bankers' numbers aren't available at a county level, as RealtyTrac's are.

Ahmadi said the state is trying to close information gaps - such as how many homeowners are behind on their payments - by negotiating for loan data from Denver-based McDash Analytics LLC.

Silverman is hopeful that new options for information-gathering will come out of the push to get foreclosure laws changed when the General Assembly convenes next month.

Without better data, developing policy is "a little more of a challenge," he said.

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