Barry Ritholtz of The Big Picture notes that the recent data showing a slowing in foreclosures is an artifact of changes in foreclosure law in a few hard-hit states:

• California requires lenders to wait an additional 30 days after a homeowner misses the first payment before filing a default notice;
• Massachusetts now gives homeowners a three-months grace period after they default on their mortgage before the lender can file to foreclose. (The law is credited with an 84% drop in foreclosure petitions);
• New York passed a bill last week that requires lenders to send a preforeclosure notice to certain borrowers at least 90 days before foreclosure proceedings may be initiated;

Of course, the financial press is looking the delays caused by these changes, and running around saying, “Foreclosures are down, the housing crash has finally hit bottom.”

The only place with more false bottoms than financial Journalism is a Beverly Hills plastic surgery clinic.

The only thing that surprises me is that he links to an article that actually points out this fact, though it does have the prize quote, “Some cynics say the laws are designed to give the appearance that the housing crisis is easing ahead of the November elections.”

We cynics prefer to call ourselves the, “Reality Based Community.”