Explroation of some of the consumer debt, loans, mortgages and foreclosures

1. Loan Problems,
Fannie Mae, et al
Is the worst over?
August 24, 2011
Mark R. Madsen
http://ThirdNature.net
Twitter: @markmadsen

2. Is the worst over?
Some say it is.
Did they look at the normal deviations in the time
series or just say “it’s lower than it was”? Oh, yeah.

3. What is the composition of what people owe?

4. Some context:
February 27, 2007: The Federal Home Loan
Mortgage Corporation (Freddie Mac) announces
that it will no longer buy the most risky subprime
mortgages and mortgage-related securities.
April 2, 2007: New Century Financial
Corporation, a leading subprime mortgage
lender, files for Chapter 11 bankruptcy
protection.
June 1, 2007: Standard and Poor’s and Moody’s
Investor Services downgrade over 100 bonds
backed by second-lien subprime mortgages.
And so it goes…

5. Improvements in badness ≠ things getting better

6. Did you catch the data viz no‐no in that last slide?
Always start your charts at the origin or the
relative amounts are exaggerated.
Naughty federal reserve. You should be spanked.

7. % in foreclosure: Q3 2011, year to year change

8. % serious delinquencies: Q# 2011, year to year change

9. Year over year change demonstrates past to
current performance, but it isn’t an indicator of
future performance.
If it was, all those big banks would still be around
and we wouldn’t be talking about this.

10. Foreclosure %: What’s happening now? (Q311)

11. That was another data viz test
Showing percentages of homes in foreclosure by
county with a color scale on a map like that makes
no sense. There’s no way to determine much
that’s meaningful other than the darker counties
being worse.
And the color scale is broken: Florida peaks at
14.5% while Nevada peaks at 6.8%

12. Foreclosures by quarter: a little good news

13. Bankruptcies might help see what’s coming

14. Combined might show a worrisome trend

15. Problem is, who’s declaring bankruptcy? Do they
have home loans? Are they already reflected in
the “serious delinquencies” data? Does this have
any relationship to the foreclosure data?
That takes more digging into details than there is
data available.
But there are other, similar things we could look
at, limited by data availability.

16. The pattern of unemployment in 2008

17. The pattern of foreclosures in 2008

18. Is there a relationship?
Maps do not make
comparisons of data
easy. Besides which, we
really want to know if
unemployment and
foreclosures are
correlated.

19. Not really, but there is a pattern
This analysis done by Emily Sciarillo at GeoCommons

20. What does it look like?
This analysis done by Emily Sciarillo at GeoCommons

21. There are a lot more questions than answers
We have lots of data quality problems in the
government and financial sector data limiting our
ability to do meaningful analysis. E.g.
▪ Much of the government data is estimates
▪ There are minimal data standards
▪ Agencies and organizations duplicate duplicate work
▪ Minimal history or time series
▪ Lack of detail underlying the aggregates making basic
analysis beyond aggregate trends impossible.

22. Resources for data used:
Event timeline for the mortgage mess – http://timeline.stlouisfed.org/pdf/CrisisTimeline.pdf –
Datasets and mapping tools – www.geocommons.com
NY federal reserve bank (data on debt and credit) – http://www.newyorkfed.org/creditconditions/
Census data via their data retrieval tool (this link is housing data) –
http://dataferrett.census.gov/datasets.html#ahs
Home Mortgage Disclosure Act data – http://www.ffiec.gov/hmdaadwebreport/AggWelcome.aspx
This presentation (and the rest of the talks) video/audio download:
https://bloorgroup.webex.com/bloorgroup/lsr.php?AT=pb&SP=EC&rID=4166022&rKey=1dd657ec48
4da85e
These slides also available at: http://www.slideshare.net/mrm0/
All the other FedSpend shows: http://www.insideanalysis.com/fedspend/

23. About the Presenter
Mark Madsen is president of Third
Nature, a technology research and
consulting firm focused on business
intelligence, analytics and
performance management. Mark is
an award-winning author, architect
and former CTO whose work has
been featured in numerous industry
publications. During his career Mark
received awards from the American
Productivity & Quality Center, TDWI,
Computerworld and the Smithsonian
Institute. He is an international
speaker, contributing editor at
Intelligent Enterprise, and manages
the open source channel at the
Business Intelligence Network. For
more information or to contact Mark,
visit http://ThirdNature.net.

24. About Third Nature
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