News Flash: AP Writer Uses Bad Evidence to Support Position

I take time to read things. That’s why I notice things like this:

The No. 1 reason people fall behind on their mortgage is loss of a job, or some source of income, perhaps from a divorce or death of a spouse. If a borrower is unemployed, lenders don’t have many options but foreclosure.

Two years ago, about 36 percent of mortgage delinquencies were caused by loss of income or unemployment, according to research by mortgage finance company Freddie Mac. But that number has risen to 45 percent this year as the unemployment rate has ticked up to a five-year high of 6.1 percent.

Jon Falen, 33, put his four-bedroom house in Olathe, Kan., with high-end appliances, granite kitchen countertops and a landscaped lot, on the market more than two years ago after health problems forced him to leave his job as an air traffic controller.

Falen and his wife, now delinquent on their two home loans, are finally scheduled to sell their house next month.

But there’s a big catch: The buyer has agreed to pay only $490,000, which is $70,000 less than what the couple paid for it in 2002.

Making matters worse, Falen and his wife owe $675,000 to two lenders because they used their home equity – which soared during the housing boom – to pay off student loans and remodeling expenses.

Though Falen and his family seem to have avoided becoming another foreclosure statistic by cashing out on retirement plans and dipping deeply into savings, he is chastened by the drawn-out experience. [Emphasis added.]

The rest of the article is a hodgepodge of conflicting “facts” and urban legends. This bit, though, is fascinating for its utter shoddiness. Consider that it starts by pointing out an increase in employment-related foreclosures due to increasing unemployment, but then gives the example of a man who lost his job due to health reasons. That’s sad and all, but people lose their jobs due to health reasons in good economic conditions and bad.

Then, consider that the man owed over $100,000 more on the house than the price at which he purchased it only six year before. That’s simply irresponsible financial planning, although he and his family should be commended for, apparently, using their own resources to solve the problem for themselves.

I suppose my point here is that I noticed this because I read the story carefully. And I wonder: do most people do the same? I tend to think not, simply because if they did, then I’d hear more people talking about both the shoddy nature of today’s “news” reporting, as well as fewer complaints about “Wall Street greed” when they talk about the financial crisis. Does anyone else question whether this writer is merely very bad at selecting evidence to support his conclusions, doesn’t understand that his evidence doesn’t support his conclusion (or both), or is so intent on making his point that he simply chose what seemed like a particularly “tragic” example regardless of its relevance?

Am I wrong? Are more people talking about these things than I’m experiencing here on the Left coast?

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