Audit Notes: a missing foreclosure figure, Denton, Brookes

How many "boomerang" buyers are there again? Gawker's secret sauce, etc

This Wall Street Journal story says buyers who went through foreclosure are already back in the market, buying houses again.

They’re so common, they already have a name: “boomerang” buyers.

Buyers Back After Foreclosure ‘Boomerang’ Home Seekers Become Eligible for Mortgages and Hit Market Again

How common? That’s the catch. The third sentence gives away the hole in this story:

Millions of families lost their homes to foreclosure after the housing crash hit six years ago. Now, some of those families are back in the housing market. Call them the “boomerang” buyers.

It is difficult to quantify the exact number of boomerang buyers, but real-estate agents, mortgage brokers and home builders all say a significant number of new buyers are families and individuals who went through foreclosure as recently as three years ago, the time period that buyers who defaulted on a mortgage must typically wait before becoming eligible for a mortgage backed by the Federal Housing Administration.

Instead of exact numbers, there are no numbers that specify how many boomerang buyers there are.

Instead, there are anecdotes and this estimate:

At Cornerstone Communities, a San Diego home builder, roughly 20 of the 110 closings they have had this year came from buyers who have been through a foreclosure or short sale, estimates Ure Kretowicz, the company’s chief executive.

That’s “roughly” 18 percent, and an estimate at that. What is the actual figure this year? Not known.

The question of buyer behavior before and after the crisis is politically fraught, and the WSJ has stumbled on the subject on more than one occasion.

Real data on such questions are needed.

—When Nick Denton talks about the future of Gawker, anyone with an interest in news innovation should listen. He’s always seemed a jump ahead, and the site’s financial success and popularity make it a model to be reckoned with.

His memo on the future of the gossip site brings up an overlooked aspect of the model that strike me as important. A key ingredient seems to be how tightly integrated are all facets of the operation. Editorial, advertising, technology, and, now, even readers themselves are all cogs in the machine, and all have to mesh perfectly for it to work. Denton:

Gawker’s initial proposition was editorial. The characters in our story have been journalists. But they are supported by the sales people who fund our enterprise, the engineers who make it possible to publish so swiftly to 40 million readers a month, and the operations staff who make this machine of anarchy run so efficiently. Our attachment to authenticity informs all departments.

I’ve heard this theme recently from Rob Grimshaw who runs the digital operations of the FT and spoke to an Audit Breakfast last week about how the paper had to effectively reinvent itself in order to became an effective digitally player, connect with readers directly (instead of through third-party distributors), and take on Apple and win. It took, for instance, about ten departments—marketing, tech, editorial, etc.—to develop the FT’s original (successful) IPhone App.

That kind of integration—different units actually working, like, together—was unheard of under industrial-era models. But now, whatever the business model, pay (FT) or free (Gawker), collaboration across news organizations isn’t just a nice idea anymore, but imperative.

—The FT scoops that Rebekah Brookes received £7 million in what the FT calls, simply, a “pay-off”s following her resignation as head of NewsCorp.’s company’s scandal-plagued U.K unit, News International.

It’s another significant development in the hacking story, which, it should be recalled, began to first crack in 2009 on news that News Corp. had made seven figure payments to hacking victims in return for their silence. That was two years before the Milly Dowler story, which finally broke it wide open. It’s not the crime; it’s the coverup.

—It wasn’t inevitable that Josh Tyrangiel would be named Ad Age’s editor of the year, but the favorable buzz surrounding BusinessWeek since Tyrangiel took over in after Bloomberg acquired it in late 2009 almost makes it seem like it. A hattip from here from making business news buzzworthy.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.