Overstated Home Sales Data & Mortgage Fraud

The Market Ticker
Verbatim Post

Oh what do we have here....

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

Oh I see. Remember, this first came up in February and I wrote about it at the time. Let's ask a simple question: How do you miscount an actual sale? A sale is a sale is a sale, right? NAR gets its data from the various MLS systems and of course we the general public should trust the professionals and their data, yes?

In point of fact I was called all sorts of names by some of those professionals when I ran down a report sent to me in the fall of 2010 claiming that the MLS data was incorrect on sold price -- a key element used when performing market analysis for clients who are interested in both buying and selling. At the time I made the audacious recommendation that nobody should trust Realtor data and should instead insist on a pull of the public records at the County level before performing any real estate transaction.

There was plenty of controversy at the time over the original claim and I spent a lot of time running down the facts, including calls to county tax authorities -- and later posted a follow-up later to the original Ticker.

This issue of bad counts of sold homes is, in my opinion, much-more serious, as it's damn hard to claim this is a result of misunderstanding between an industry professional and a naive client.

Let's face reality here folks: Counting how many things sold is pretty simple if there's any sort of verification and integrity in the process, especially when ownership changes are filed with county authorities in public records and thus a spot check should catch any material error almost instantly!

So I must ask -- why now, some eight months after Corelogic first raised the issue? Did it really take eight months to actually.... well..... count? How many fingers do these people have again?

And again I have to ask - why is it that it always seems these errors in important economic statistics are in the same direction?

Cue rabid defenses from the industry (despite the fact that it might have led people to overpay, perhaps materially so) in 5......4......

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Via The California Tree of Liberty

“The FBI Estimates That 80 Percent Of All Mortgage Fraud Involves Collaboration Or Collusion By Industry Insiders”

Fraud By The Big Banks – More Than Anything Done By The Little Guy – Caused The Financial Crisis

The U.S. Treasury’s Office of Thrift Supervision noted last year (page 7):

The FBI estimates that 80 percent of all mortgage fraud involves collaboration
or collusion by industry insiders.

This confirms what one of the country’s top fraud experts has said for years: that it was fraud by the big banks – more than anything done by the little guy – which caused the financial crisis:

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