An important question is being discussed in the media lately:
"When you say a home is in foreclosure, what does that mean?" Minnesota Public Radio has been exploring this question.
MPR recently reported that there seems to be a discrepancy between the foreclosure data that RealtyTrac produces and reports that are released by HousingLink and the
MN Home Ownership Center.
RealtyTrac has stated that foreclosures in Minnesota were up nearly 50% in 2009 while HousingLink and the MN Home Ownership Center claim that foreclosures took a slight decline in 2009, rather than a huge increase.
Where's the difference?
The discrepancies comes down to what you actually count as a "foreclosure". At HousingLink, we believe the most accurate way to calculate foreclosures is to look at sheriff's sales--the point at which a homeowner loses their home to the lender or third party real estate organization. RealtyTrac tally's up all the properties that are anywhere in the foreclosure process--from the first pre-foreclosure notice a homeowner receives to the actual sheriff's sale. Given that there are numerous ways for people to avoid a sheriff's sale along the path to foreclosure, we feel that calculating actual sheriff's sales give the most accurate picture of homes that have been foreclosed on. RealtyTrac feels otherwise.
This debate will continue into the future. What do you think? Which method of calculating foreclosures seems to make the most sense to you?