The slug on one of today’s Associated Press stories is “Foreclosure Mess,” which is an apt and pithy description of the documentation and paperwork foul-up that is making a dire residential real estate market even worse for buyers, sellers, investors, creditors and virtually anyone else with a stake in the housing situation.
Figuring out how to localize the story – how to slice it so your readers’ concerns are addressed coherently and in detail – is rather a messy business in itself.
Keep in mind your constituents include not only distressed borrowers but those indirectly affected by gridlock in the real estate market. This azcentral.com article from Oct. 20 does a good job of addressing the latter’s concerns; it’s a detailed explainer on the process (note the paragraph pinpointing how many homeowners likely have received a reprieve since the Oct. 8 announcement) that segues into a forecast of how the glitch might drag out the inventory of unsold foreclosed properties and affect pricing for all sellers. (The only thing that would’ve improved this story would be a few dollar amounts, if analysts were willing to estimate the ding to prospective sellers.)
The effect on prices is likely of greatest interest to audiences, and the hardest to pin down. This recent paper by the Federal Reserve Bank of Cleveland on the effect of foreclosures on nearby homes is excellent background and will help you formulate interview questions for local experts.
Also, this MyBankTracker.com advice column for people in the midst of a foreclosure purchase is a great take on the current crisis; localize it based on procedures and regulations in your state.
Check with housing agencies at the state and county level, and likely attorneys in your community, about the likelihood of any wrongful eviction claims arising from the paperwork debacle.
One way to educate yourself and readers at the same time is to follow regulatory actions. Rick Rothacker, banking reporter for The Charlotte Observer, said during a SABEW teletraining call on Wednesday that he’s been in touch with his state’s attorney general and banking commissioner, for example. Find out who tracks foreclosures in your area.
Another area to check is the local courts, which were already backlogged with foreclosures in many areas, according to this Wall Street Journal story, even before legal issues were raised about robo-signing.
Another great tip from Rothacker for gathering background data: You can ask banks to provide you with a CD containing their Home Mortgage Disclosure Act data. Do this each March. The data includes demographic information as well as information about loan pricing. You can also look up stats on your area at this Home Mortgage Disclosure Act (HMDA) site. Investigative Reporters and Editors also has the entire database for the nation available for 2009 for $50 to $125.
Don’t overlook trade journals for insight and story ideas: This Mortgage News Daily article , for example, acknowledges robo-signing as an industry problem but also highlights two other potential issues relating to recordkeeping: the Mortgage Electronic Registration System (MERS) and an “in blank” form of endorsing mortgage notes that could muddy ownership waters. Obviously as journalists we’re not experts on these back-office systems, but it’s worth asking your local bankers for their thoughts on the implications — and worth keeping an eye on trade publications.
One last tidbit: I overheard a snippet of news broadcast that mentioned foster homes affected by foreclosure, and that got me to thinking about a category of ownership we haven’t read much about: nonprofit ownership of residential properties. Think foster homes, adult group-care homes, domestic abuse shelters and other residences apt to be owned by cash-strapped organizations and apt to be home to vulnerable and possibly low-income residents. What happens when the bank representative or sheriff shows up with an eviction order?