Monthly foreclosure statistics reported by RealtyTrac Inc., a California-based research company, during 2006 had put Colorado atop a list of all states, based on the number of foreclosures per household. While the latest RealtyTrac report, issued Feb. 12, puts Nevada in the top spot nationally, Colorado had ranked No. 1 for nine of the past 13 months.
But the state's top housing official said RealtyTrac could be triple-counting many of the same properties as they move through various stages of the foreclosure process.
"We have had a hard time understanding this disparity between their numbers and ours," said Kathi Williams, director of the Colorado Division of Housing. A careful comparison of RealtyTrac's numbers with those Williams and her staff gathered from public trustees in each of the state's 64 counties led to "this great epiphany," as she described it - a finding that the data service was repeatedly counting the same properties.
Colorado's unique status as the only state in which foreclosures are handled by public trustees means public records are much more freely available than in other states, where complex mixes of private trustees and civil courts steer the foreclosure process.
Because of the transparency of Colorado's process, and the ease of retrieving records, RealtyTrac often flags multiple records on a single foreclosure case. Here is how it happens:
- A RealtyTrac researcher will record a notice of election and demand, the first step in the foreclosure process initiated by a lender against a delinquent homeowner.
- The public trustee's office will generate another record, listing properties that have not been "cured," or resolved, in the months-long foreclosure process, that may contain the same home.
- RealtyTrac often has a third look at the same property, as it enters the redemption period, and notes that record, as well, in its statistics, Williams said.
During a Feb. 7 conference call with RealtyTrac's vice president for marketing, Williams and two staff members worked to resolve differences between RealtyTrac's foreclosure count and the one that is emerging during the division's exhaustive analysis of public trustee records.
"My sense is that their methodology has changed," Ryan McMaken, the state agency's community relations director, said after the conference. "They indicated that they do an aggregate of these numbers."
RealtyTrac marketing vice president Rick Sharga acknowledged the double- or even triple-counting, but said the company used the same data-mining techniques nationwide.
"Does Colorado either execute foreclosures, or report them, in a way that's more efficient than other states? Maybe so," Sharga told the Business Report. "On an apples-to-apples basis, we don't do anything differently in Colorado than elsewhere. It's a matter of getting more records, and more efficiency in delivering them, in Colorado."
The result is that "one loan will appear as multiple data points in our records," he said.
Read more of this story in the Feb. 16 print edition of the Northern Colorado Business Report, which will be available online at www.ncbr.com Tuesday, Feb. 22.
