Loans and Debts and Data: Data Exploration Corner slides

Loan Problems, Fannie Mae, et alIs the worst over?

August 24, 2011

Mark R. Madsenhttp://ThirdNature.netTwitter: @markmadsen

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.

What is the composition of what people owe?

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…

Improvements in badness ≠ things getting better

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.

% in foreclosure: Q3 2011, year to year change

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

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.

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

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%

Foreclosures by quarter: a little good news

Bankruptcies might help see what’s coming

Combined might show a worrisome trend

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.

The pattern of unemployment in 2008

The pattern of foreclosures in 2008

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.

Not really, but there is a pattern

This analysis done by Emily Sciarillo at GeoCommons

What does it look like?

This analysis done by Emily Sciarillo at GeoCommons

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.

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=1dd657ec484da85e

These slides also available at: http://www.slideshare.net/mrm0/

All the other FedSpend shows: http://www.insideanalysis.com/fedspend/

About the PresenterMark 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.

About Third Nature

Third Nature is a research and consulting firm focused on new and emerging technology and practices in business intelligence, data integration and information management. If your question is related to BI, open source, web 2.0 or data integration then you‘re at the right place.

Our goal is to help companies take advantage of information-driven management practices and applications. We offer education, consulting and research services to support business and IT organizations as well as technology vendors.

We fill the gap between what the industry analyst firms cover and what IT needs. We specialize in product and technology analysis, so we look at emerging technologies and markets, evaluating the products rather than vendor market positions.