Heath Greathouse, representing Riverside Trustees in Martinsburg, reads the notice of sale of a Dunbar home. In 2007, 357 properties were sold on the Kanawha Courthouse steps, compared with 220 in 2000.
CHARLESTON, W.Va. -- Five times more West Virginia homes and businesses were sold in foreclosure in 2007 than the nation's most popular foreclosure statistics reported, a Gazette-Mail analysis found.
According to a 55-courthouse canvas of foreclosure records, at least 2,550 West Virginia mortgages ended in foreclosure sale in 2007. RealtyTrac Inc. reported only 473.
RealtyTrac, the nation's most reported source of foreclosure statistics, routinely does not count a significant part of West Virginia foreclosures, a RealtyTrac executive confirmed.
RealtyTrac, a California-based Internet company that also helps people buy foreclosed properties, generates the statistics most often reported by The Associated Press, CNN, the Wall Street Journal, and other national media.
The company routinely ranks West Virginia third lowest in foreclosures in the nation. That ranking is widely cited by state officials.
Lobbyists have used it at the Legislature to help kill anti-predatory mortgage proposals, arguing that it proves West Virginia has no foreclosure problem. Federal dollars for housing relief are increasingly keyed to foreclosure rate.
Reached at his Irvine, Calif., office, Rick Sharga, RealtyTrac vice president of Marketing, told the Gazette-Mail, with no hesitation, that RealtyTrac's West Virginia numbers are faulty, based on an incomplete count, and cannot be accurately compared with numbers of other states.
"West Virginia is one of the states where we need to do a better job," he said. "We know we're underreporting in West Virginia."
RealtyTrac does not count some West Virginia counties at all and counts only part of others, Sharga said. In RealtyTrac's most recent state-by-state report, issued Sept. 12, only 14 of West Virginia's 55 counties are counted.
"This is flabbergasting," said Delegate Carrie Webster, D-Kanawha. Webster is chairwoman of the House of Delegates Judiciary Committee. "Decisions have been made on the basis of those numbers that affect people's lives," she said. "Bad numbers don't make good policy."
Sharga said that, if anyone had called him, he would have told them RealtyTrac's West Virginia numbers should not be used for policy decisions. "It's always a little disconcerting to hear about somebody using the numbers without talking to us first," he said. "We don't want our numbers to be misused or misinterpreted or misapplied."
West Virginia - and other sparsely populated rural states - are low priority in RealtyTrac's national count, Sharga explained, because "we start with the highest population density areas and work our way out."
RealtyTrac counts 2,200 of the nation's 3,140 counties that contain 90 percent of the nation's households, Sharga said. West Virginia has more than its share of the 940 uncounted counties, he said.
"If I were running the business as a West Virginia-focused business," he said, "what we're talking about would be thoroughly unacceptable. But if you talk about the laws of large numbers, if I miss a county in California, I miss more in a month than I'd miss in West Virginia in a year. So you go first to the areas with the highest volume."
Bob Lamont, West Virginia Division of Banking attorney, has two questions: "How many other rural states are undercounted?" and "If their numbers aren't accurate, why do they put out numbers for those rural states?"
"We have no intention of misleading anybody," Sharga said. "We do the best we can, given the imperfect nature of public record data and don't knowingly mislead anybody with this information.
"We concentrate on areas of 25,000 people or more," he said. "From a national perspective, if we flat-out missed half of the foreclosures in West Virginia, it wouldn't make a difference in the national numbers."
This summer, the Sunday Gazette-Mail organized a 55-courthouse count of 2007 foreclosure sales to find out how many foreclosures took place in West Virginia last year and to compare it to the percentage RealtyTrac is counting. In 49 counties, county clerk staff counted records of sale. Gazette-Mail staff counted the rest.
According to courthouse records, at least 2,550 West Virginia homes and businesses were sold in foreclosure in 2007.
In 51 out of 55 counties, foreclosures were substantially higher than RealtyTrac reported.
RealtyTrac reported only 473 West Virginia properties in foreclosure during 2007. Based on that number, RealtyTrac assigned West Virginia the third-lowest foreclosure rank.
The Mortgage Bankers Association reported eight times more West Virginia properties in foreclosure than RealtyTrac did. By their count, 3,199 started into foreclosure in 2007, and 1,297 were there as the year began, for a total of 4,496.
The courthouse count does not include homes lost to bankruptcy, homes sold or given back to the bank to avoid bankruptcy, mortgages tied up in court proceedings or, for the most part, mobile homes.
The Mortgage Bankers and RealtyTrac count properties in foreclosure, not properties sold. Since some owners avoid sale, their numbers would logically be higher than the courthouse count.
RealtyTrac numbers have been used as a tool to stop predatory mortgage legislation, Webster said. In January, banking lobbyists circulated an Associated Press map based on RealtyTrac ranking, arguing that the state has no problem.
"It was stopped flat, squashed, before it even got off the ground," Webster said. "Legislators have no shortage of things that need attention, and if people keep saying there's no problem, they turn their attention elsewhere."
The proposal would have required lenders to verify that a borrower can afford a loan and would have made it illegal to slap a borrower with a penalty if he pays off his mortgage early, among other things, Webster said.
Nowhere in RealtyTrac's monthly reports or on its Web site is it stated that the West Virginia data is incomplete or faulty, Sharga said. "If we're not covering 100 percent," he said, "we don't asterisk it and say 'Does not cover five outlying counties.'"
The Mortgage Bankers Association - which Sharga called "the gold standard" - generally places West Virginia in the middle third of states in percent of mortgages in foreclosure.
Edward Prescott, vice president of research for the Richmond Federal Reserve Bank, agrees. "West Virginia's foreclosure situation, while it's not terrible, is not as good as everybody has been claiming it to be," he said. "It's generally in the middle."
CHARLESTON, W.Va. -- Five times more West Virginia homes and businesses were sold in foreclosure in 2007 than the nation's most popular foreclosure statistics reported, a Gazette-Mail analysis found.
According to a 55-courthouse canvas of foreclosure records, at least 2,550 West Virginia mortgages ended in foreclosure sale in 2007. RealtyTrac Inc. reported only 473.
RealtyTrac, the nation's most reported source of foreclosure statistics, routinely does not count a significant part of West Virginia foreclosures, a RealtyTrac executive confirmed.
RealtyTrac, a California-based Internet company that also helps people buy foreclosed properties, generates the statistics most often reported by The Associated Press, CNN, the Wall Street Journal, and other national media.
The company routinely ranks West Virginia third lowest in foreclosures in the nation. That ranking is widely cited by state officials.
Lobbyists have used it at the Legislature to help kill anti-predatory mortgage proposals, arguing that it proves West Virginia has no foreclosure problem. Federal dollars for housing relief are increasingly keyed to foreclosure rate.
Reached at his Irvine, Calif., office, Rick Sharga, RealtyTrac vice president of Marketing, told the Gazette-Mail, with no hesitation, that RealtyTrac's West Virginia numbers are faulty, based on an incomplete count, and cannot be accurately compared with numbers of other states.
"West Virginia is one of the states where we need to do a better job," he said. "We know we're underreporting in West Virginia."
RealtyTrac does not count some West Virginia counties at all and counts only part of others, Sharga said. In RealtyTrac's most recent state-by-state report, issued Sept. 12, only 14 of West Virginia's 55 counties are counted.
"This is flabbergasting," said Delegate Carrie Webster, D-Kanawha. Webster is chairwoman of the House of Delegates Judiciary Committee. "Decisions have been made on the basis of those numbers that affect people's lives," she said. "Bad numbers don't make good policy."
Sharga said that, if anyone had called him, he would have told them RealtyTrac's West Virginia numbers should not be used for policy decisions. "It's always a little disconcerting to hear about somebody using the numbers without talking to us first," he said. "We don't want our numbers to be misused or misinterpreted or misapplied."
West Virginia - and other sparsely populated rural states - are low priority in RealtyTrac's national count, Sharga explained, because "we start with the highest population density areas and work our way out."
RealtyTrac counts 2,200 of the nation's 3,140 counties that contain 90 percent of the nation's households, Sharga said. West Virginia has more than its share of the 940 uncounted counties, he said.
"If I were running the business as a West Virginia-focused business," he said, "what we're talking about would be thoroughly unacceptable. But if you talk about the laws of large numbers, if I miss a county in California, I miss more in a month than I'd miss in West Virginia in a year. So you go first to the areas with the highest volume."
Bob Lamont, West Virginia Division of Banking attorney, has two questions: "How many other rural states are undercounted?" and "If their numbers aren't accurate, why do they put out numbers for those rural states?"
"We have no intention of misleading anybody," Sharga said. "We do the best we can, given the imperfect nature of public record data and don't knowingly mislead anybody with this information.
"We concentrate on areas of 25,000 people or more," he said. "From a national perspective, if we flat-out missed half of the foreclosures in West Virginia, it wouldn't make a difference in the national numbers."
This summer, the Sunday Gazette-Mail organized a 55-courthouse count of 2007 foreclosure sales to find out how many foreclosures took place in West Virginia last year and to compare it to the percentage RealtyTrac is counting. In 49 counties, county clerk staff counted records of sale. Gazette-Mail staff counted the rest.
According to courthouse records, at least 2,550 West Virginia homes and businesses were sold in foreclosure in 2007.
In 51 out of 55 counties, foreclosures were substantially higher than RealtyTrac reported.
RealtyTrac reported only 473 West Virginia properties in foreclosure during 2007. Based on that number, RealtyTrac assigned West Virginia the third-lowest foreclosure rank.
The Mortgage Bankers Association reported eight times more West Virginia properties in foreclosure than RealtyTrac did. By their count, 3,199 started into foreclosure in 2007, and 1,297 were there as the year began, for a total of 4,496.
The courthouse count does not include homes lost to bankruptcy, homes sold or given back to the bank to avoid bankruptcy, mortgages tied up in court proceedings or, for the most part, mobile homes.
The Mortgage Bankers and RealtyTrac count properties in foreclosure, not properties sold. Since some owners avoid sale, their numbers would logically be higher than the courthouse count.
RealtyTrac numbers have been used as a tool to stop predatory mortgage legislation, Webster said. In January, banking lobbyists circulated an Associated Press map based on RealtyTrac ranking, arguing that the state has no problem.
"It was stopped flat, squashed, before it even got off the ground," Webster said. "Legislators have no shortage of things that need attention, and if people keep saying there's no problem, they turn their attention elsewhere."
The proposal would have required lenders to verify that a borrower can afford a loan and would have made it illegal to slap a borrower with a penalty if he pays off his mortgage early, among other things, Webster said.
Nowhere in RealtyTrac's monthly reports or on its Web site is it stated that the West Virginia data is incomplete or faulty, Sharga said. "If we're not covering 100 percent," he said, "we don't asterisk it and say 'Does not cover five outlying counties.'"
The Mortgage Bankers Association - which Sharga called "the gold standard" - generally places West Virginia in the middle third of states in percent of mortgages in foreclosure.
Edward Prescott, vice president of research for the Richmond Federal Reserve Bank, agrees. "West Virginia's foreclosure situation, while it's not terrible, is not as good as everybody has been claiming it to be," he said. "It's generally in the middle."
Where do these
umbers come from?
Sharga voluntarily pointed out another apples-and-oranges issue. West Virginia is a state where mortgage defaults are not public record. "Notices of default are mailed to the owners," he said.
RealtyTrac counts notices of default for its statistics. So they compare West Virginia numbers with no defaults to other state numbers that include defaults, sometimes tens of thousands of them.
"Since we're not picking up defaults in West Virginia, it could be creating an illusion that there aren't as many foreclosure-related activities as there really are," Sharga said.
To pick up on West Virginia's foreclosure-related activities, RealtyTrac contracts with one person. She is supposed to get data for West Virginia properties in foreclosure and send her information to California each month. RealtyTrac does not try to verify them. "Sitting here, I have no way to do that. I'm 3,000 miles away," he said. "We do rely on them [contractors] pretty heavily."
Sharga declined to name the contractor. But he sent the Sunday Gazette-Mail the West Virginia county-by-county figures RealtyTrac used to produce their 2007 yearly report.
RealtyTrac reported only 108 properties in foreclosure in 2007 in Kanawha County. The clerk's office recorded 357 foreclosure sales. "If they'd called me, I could have told them," record room supervisor Sam Drucker said.
RealtyTrac's Fayette County number was 13. There are 71 foreclosure sale records in the Fayetteville courthouse. "They obviously didn't look in our book," said Fayette County Clerk Kelvin Holliday.
Mercer County deputy clerk Debby Blankenship reported 88 foreclosure sales, compared to RealtyTrac's 28. "I've got it here in black and white. Eighty-eight people lost their homes," she said.
Neither state nor federal government tracks foreclosure records.
"Amazingly enough, there's no such thing as a national foreclosure database that combines all courthouse records from around the country to say, 'This is the number of foreclosures that have been filed,'" said Kathleen Keest, attorney for the national Center for Responsible Lending.
Congress has voted billions in bailouts, and foreclosure sales derailed the stock market and pushed the country into recession, Keest said, yet nobody knows how many homes have been lost to foreclosure.
If the national media wants monthly numbers, they have no choice but to use unvetted, privately generated numbers. "None are fully accurate," Keest said, "but they're reported as if they were."
Even the "gold standard" Mortgage Bankers numbers miss 15 percent nationally. The MBA collects data from servicers of 85 percent of mortgages, but up to 30 percent could be missing from a rural state, former MBA head economist Doug Duncan said.
The press reports Mortgage Bankers numbers less often. They come out every three months, are not pre-ranked, are not on the Web, have no county-by-county breakdowns.
Each month, RealtyTrac posts one pre-ranked state-by-state chart on the Internet. Reporters can get county figures and sometimes city figures. "There is no other national resource for this," Sharga said.
The cost of underreporting
RealtyTrac's third-lowest rating is so well-known, people repeat it as fact, without attribution. That fact makes it harder to remedy real foreclosure problems, Kim Stitzinger said.
Stitzinger is lead attorney in the fraud lawsuit the West Virginia attorney general filed in August against Countrywide, one of the nation's biggest mortgage lenders. "I got calls from reporters who said, 'Why are you filing this lawsuit when West Virginia has one of the lowest foreclosure rates?' Our response is, 'We get calls practically every week from people who are losing their homes, and the statistics say the problem is growing.'"
What is RealtyTrac?
RealtyTrac became a major foreclosure statistics player by default, Sharga said. The company was created in 1996 to help people buy foreclosed properties, not to provide statistics to the media. "We like to think of ourselves as an online foreclosure marketplace," he said.
Banners on the RealtyTrac Web site say things like "FORECLOSURES ARE HOT!" And "FORECLOSURE INVESTING ... MAKE YOUR FORTUNE!"
For a fee of $49.95 a month, anybody can peruse RealtyTrac's listings of properties in foreclosure. People who cruise the RealtyTrac site can choose from products like Shark Bait software and books on foreclosure investing.
When the subprime crisis hit the headlines, national reporters discovered the government had no statistics. "RealtyTrac got a lot of calls," Sharga said.
The company rose to the occasion, Sharga said, and started producing monthly statistics in 2005. "We have tried to help," he said. "Nobody else was doing it."
Three years later, the company has "strategic alliances" with MSN Real Estate, Yahoo and the Wall Street Journal's Real Estate section, among others, to supply Web updates and other services. They publish blogs, tip sheets and analyses.
RealtyTrac's Web site gets more than 3 million hits a month. The company was named one of the nation's 500 fastest-growing companies by Inc. Magazine in 2006.
Its foreclosure statistics are "a work in progress," Sharga said. "In nine out of 10 places, people tell us we are very close. But I would not begin to tell anybody that it is perfect data.
"We work with an awful lot of governmental organizations, state, local and national," he said. "We provide them with free data, so they can do their own analysis."
Its dual role worries some. "We stay away from RealtyTrac data," said Heather Morton, analyst for the National Conference of State Legislatures. "They have a vested interest."
Last year, the Atlanta Journal-Constitution analyzed RealtyTrac's Georgia figures and found that RealtyTrac double-counted tens of thousands of urban mortgages, but undercounted in rural areas. The Colorado Division of Housing found the same, and its director told the Rocky Mountain News that RealtyTrac figures are "ridiculous and irresponsible."
Since then, RealtyTrac has developed a procedure that eliminates double-counting, Sharga said. Is the data accurate now? In urban areas, yes, Sharga said. In the most rural areas, no.
RealtyTrac's lowest-foreclosure list includes Mississippi, Louisiana, Alabama, Wyoming, North Dakota, South Dakota, Maine, Montana and Vermont.
"It's a work in progress," Sharga said. "We know we need to improve our data collection in West Virginia. And just because of the relatively low volume, compared with the rest of the country, it hasn't been the highest priority, but we're working on it."
Keep it clean. Comments that are obscene, sexually explicit, racist or offensive will be removed. If you wouldn�t say it to your mother, don�t post it here.
Be civil. Don�t threaten to hurt anyone. Personal attacks, insults or harassment of any kind are subject to removal.
Be truthful. Don�t lie about a situation or person.
Keep it brief. Keep your comment to one post. Redundant or multiple posts in a row aren�t allowed.
Stay on task. Stick to the topics relevant to the story and discussion.
Let us know about offensive comments. Click the �Report Abuse� button if you think a comment is against the rules.
Report a violation or offensive comment.
[X] Close
Posted By: Anonymous(8:33pm 09-23-2008)
Report Abuse
It's like un-employment compensation stats. The great American cover up. Once a person has run out of benefits it goes back to the books that that indivdual has stopped recieving them and shows he or she is back to work, whether or not you are. Same as housing market. If some company comes in at the last momment and offers you penny's on the dollar for your house before it goes to foreclosure it's considered a sale. Realitor's friend's, brother and cousins love it...Bush will give his last speech and spend 700 billion of our money and we will have his legacy to be proud of.......America is a bunch of Lemming's looking for the cliff to jump off of. Wake up.
Another tax payer
Posted By: Anonymous(12:57am 09-22-2008)
Report Abuse
The banking and mortgage industry should be ashamed of themselves for permitting predatory lending practices. Where is the honest businessman of yesterdays who looked out for the interests of his community and his business? Now it seems like the financial industry is more in the mode of "take the money and run."
Posted By: Anonymous(12:23am 09-22-2008)
Report Abuse
"to anonymous............please cite your statisitcs."
Everyone here is "anonymous," yourself included. If you're asking about the reference to houses in WV continuing to increase in value through the so-called mortgage crisis, I suggest you refer to the Office of Federal Housing Enterprise Oversight's house price indices.
Posted By: Anonymous(11:09am 09-22-2008)
Report Abuse
Thanks to wall street corruption and government collusion the US is now the most socialist country of all industrialized countries. Our nation looks nothing like it did 8 years ago. We are living through the biggest upheaval in the social structure since the 1930's. The results of all of this are only just now being felt by average citizens. The next 4 years will determine whether or not our grandkids will recognize anything of the nation we have grown up in.
Some of you better get your head out of the sand. You have bigger problems than "socialized" medicine.
Click here to listen to an interview with Rick Sharga, Vice-President of RealtyTrac, Inc.
View state foreclosures, county by county
Related: West Virginia foreclosure rate: Third lowest? In the middle? 
Post a comment
Another tax payer
Everyone here is "anonymous," yourself included. If you're asking about the reference to houses in WV continuing to increase in value through the so-called mortgage crisis, I suggest you refer to the Office of Federal Housing Enterprise Oversight's house price indices.
Some of you better get your head out of the sand. You have bigger problems than "socialized" medicine.