Photo by iStock

Charles Piller and Robert Lewis are among this year’s finalists for the Gerald Loeb awards for their Sacramento Bee stories exploring hard money lending. The first of their two stories starts with a district attorney who borrowed from a hard money broker, which the story defines as the equivalent of a “legal loan shark who uses others’ money to make high-priced loans.” They write:

“Newell’s ties to the broker offer a window into a culture of fraud in the hard money community in Nevada County. A Bee review of thousands of pages of court and regulatory filings shows that for more than 20 years, a number of hard money brokers have misused or stolen their investors’ money. Some brokers landed in prison; many investors lost their life savings.

Abuses typify the hard money industry. A Bee review of statewide data for the biggest 344 brokers operating around the peak of the real estate bubble found one out of every four has been accused of wrongdoing or sanctioned by the state Department of Real Estate in the past decade.”

The winners of the Loeb awards, which honor business journalism, will be announced next month. 

Today’s Tip: Make sure you have every record associated with real estate transactions, Charles says.

“It’s easy for your eyes to glaze over, but you have to be sure you’re getting everything because one missing document totally changes everything,” he says. “You have to be dogged and determined to find everything.”

Finding the properties linking hard-money brokers to investors and borrowers required connecting names and various types of transactions, Charles says. Because the real estate records weren’t easily comprehensible, they contacted about six real estate experts to interpret them. They created a guidebook for each transaction to be sure they’d collected all of the information.

Charles Piller

The story also relied on campaign contribution data, contractual agreements with investors, regulatory reports and information from the California Department of Real Estate. The final tally of pages was between 7,000 and 10,000, Charles says.

The reporters also benefited from getting the primary people involved to sit for an interview. Charles says getting the hard-money broker was the biggest challenge. He said no 10 times before finally consenting.

“It’s a rare story where you interview three of the principal characters and they’re all crying in the interview,” Charles says. “It’s never happened in my career before.”

The reporters coverage of hard-money lending prompted legislative changes.

The passing of a bond issue will now enable this Colorado school district to build a new school. Photo: Denver Post

David Olinger of the Denver Post questions investment bankers’ involvement in school bond campaigns, noting that their help to pass tax increases may be a violation of Colorado law. He writes:

“The Denver Post analyzed 15 successful Colorado bond campaigns backed by large contributions from investment banks. In every case, the bank that helped finance the campaign sold the bonds.

The Post found that individual school districts took as much as $137,500 from a single bond company, and that in six of the 15 campaigns, bond company donations amounted to a majority or nearly half of all contributions.

By comparison, no person can give more than $1,100 to a Colorado gubernatorial candidate, and corporate gifts to state candidates are forbidden.”

“This story could be told in a number of states, because I saw contributions to other states’ school bond campaigns from the same players,” David says.

Today’s Tips: Check campaign records to find connections between investment bank contributions and contracts.

For this story, David says he collected records from the Colorado secretary of state, which keeps campaign records that can be searched by contributor. He compared that information against bond issue data from the Municipal Services Rulemaking Board’s EMMA site. He says the bond’s official statement will provide the underwriting discount, or profit.

David Olinger

“Sometimes you can learn a lot by comparing information in two different databases,” David says. “The Bond Buyer had a very good story on this subject earlier this year, which found a perfect correlation between bond contributions and bond contracts in California school campaigns.”

The MSRB also collects data showing how much bond houses contribute to bond election campaigns, David says. He warns the data can be difficult to find.

Also check court records. David says a civil suit involving former Stifel Nicolaus political consultants who moved to Piper Jaffray “helped provide some insight into how these guys work.”

“An emergency room doctor in June called federal regulators to report an ‘unsafe environment’ after he treated several Amazon warehouse workers for heat-related problems. The doctor’s report was echoed by warehouse workers who also complained to regulators, including a security guard who reported seeing pregnant employees suffering in the heat.

In a better economy, not as many people would line up for jobs that pay $11 or $12 an hour moving inventory through a hot warehouse. But with job openings scarce, Amazon and Integrity Staffing Solutions, the temporary employment firm that is hiring workers for Amazon, have found eager applicants in the swollen ranks of the unemployed.”

The story earned Spencer a spot among this year’s finalists for the Gerald Loeb awards that honor business journalism.

Today’s Tip: Don’t dismiss what people say about the workplace, Spencer says.

Spencer says he first got a tip about working conditions at Amazon after writing a story about the temporary staffing agency that helps Amazon recruit employees.

Spencer Soper

“The more we looked, the more we found,” Spencer says. “It wasn’t just a routine complaint about work, but a work environment that needed to be exposed.”

Corroboration from federal regulators and the emergency room doctor helped support the claims, he says.

The story notes the paper found 20 employees to talk about the workplace. Spencer says many people weren’t willing to talk because they still worked at the warehouse. But the stiff job market also made people wary of talking about the company – even anonymously – because they didn’t want to jeopardize their chances to find other jobs, he says.

For this story, Spencer says he found employees by calling people and visiting the warehouse. Last year, Mike Hudson offered additional tips on finding employees, including websites such as Ripoff Report.com, GlassDoor.com and Jobitorial.

A screenshot from the Columbus Dispatch graphic that ran with the "Credit Scars" series.

Jill Riepenhoff and Mike Wagner of the Columbus Dispatch analyzed about 30,000 consumer complaints from people who’ve been unable to correct errors on their credit reports for a four-part series called Credit Scars. The complaints, filed with the Federal Trade Commission and attorneys general in 24 states, accuse credit-reporting agencies Equifax, Experian and TransUnion of violating the Fair Credit Reporting Act.

Jill and Mike write in the kick-off article:

“Nearly a quarter of the complaints to the FTC and more than half of the complaints to the attorneys general involved mistakes in consumers’ financial accounts for credit cards, mortgages or car loans. Houses sold in bank-approved ‘short sales,’ at less than the value of the mortgage, were listed as foreclosures. Car loans that had been paid off were reported as repossessions. Credit cards that had been paid off and closed years earlier showed as delinquent.

More than 5 percent complained to the FTC and more than 40 percent to the attorneys general that their reports had basic personal information listed incorrectly: names, Social Security numbers, addresses and birth dates. An Ohio man said his report identified him as having been a police officer since 1923. He was born in 1968. A woman in her 60s said that her credit report listed her as 12 years old.”

Today’s Tip: Determine your methodology upfront.

Jill says Freedom of Information Act request to the Federal Trade Commission yielded scanned PDFs – not the electronic copies they requested. To create their database, they had to sort the information by hand. Because the complaints were unverified, they decided to eliminate duplicate and vague complaints.

Jill Riepenhoff

“The data needed to be balanced to be defensible to credit-reporting agencies,” Jill says. “Reporters often want to have a huge quantity, but we have to realize it’s OK (to have fewer numbers).”

Much of the information didn’t include identifying information. To find victims, Jill says she went to the Ohio Supreme Court to read lawsuits related to violations of Fair Credit Reporting Act.

Jill’s other bit of advice is to check complaints filed with the attorney general’s office.

“Consumers complain about everything from defective toasters to mortgage brokers who are scamming them on a home sale,” she says. “There’s a wealth of information and they’re untapped resource.”

Some offices, including in Ohio, file the complaints in electronic formats that can be easily searched for specific topics, she says.

By Flickr user Joe Garde

Alejandro Lazo of the Los Angeles Times reports that mortgage foreclosures have led to a boom for apartment rentals across the country. He writes:

“The foreclosure mess has pushed millions of former homeowners with tarnished credit into a competitive apartment market across the U.S. Add fresh demand from young workers, few new units and tight standards for home loans, and the result is rental sticker shock not seen in years.

Rents are surging from New York to Los Angeles. The average monthly U.S. rent for apartments hit $1,008 in the first quarter, pushing past the all-time high set in the third quarter of 2008, according to the data firm RealFacts. USC’s Lusk Center for Real Estate forecasts a 10 percent jump in Los Angeles County rents over the next two years. In certain markets, it is now cheaper to own a home than rent.”

Alejandro’s story offers anecdotal data from rental agencies and renters, which he found by using source finder site HARO and by calling brokers. But the story also gives readers real numbers.

Today’s Tip: Find analysts that cover real estate investment trusts to gather information about the local rental market.

REITs’ shares are traded publicly so analysts often cover them, which means lots of data, Alejandro says. Reporters also can check the REIT.com site for reports and sources.

Alejandro Lazo

Alejandro also recommends RealFacts, a database firm that tracks apartment rentals nationwide.

Finally, schools such as USC’s Lusk Center for Real Estate can offer data. Alejandro says the Lusk Center offers local market summaries and forecasts.

For more tips on tracking rentals in your area, check out Melissa Preddy’s post on the rental market boom.

Photo by iStock

A recent piece by Shan Li for the Los Angeles Times details the premiums fertility clinics pay for egg donations. She writes:

“It’s technically called an egg ‘donation.’ But if you’re a young Asian woman, donating your eggs to an infertile couple can fetch enough cash to buy a used car or perhaps a semester at college.

The same market forces that drive the price of cotton, copper and other commodities — supply and demand — have allowed Asian women to command about $10,000 to $20,000 for their eggs, also known as gametes or ova.”

My first thought: Who knew?

Shan says the story was generated from a previous piece she wrote about Chinese couples coming to the United States to find surrogate mothers. The practice is illegal in China.

Shan Li

The initial story came from her father, who joked about newly rich people in China spending their wealth in over-the-top ways like hiring ex-military men as bodyguards for a three-day vacation in Egypt, she says.

Today’s Tip: Don’t assume a topic is too personal.

“Young people’s perception of what is private and what is public has shifted dramatically,” Shan says. “I was constantly surprised at how open these women were to discussing something that I presumed was intimate and personal.”

She says she found a few donors by searching for tweets about “donating eggs” and “getting paid.” She added that the clinics openly talked about their businesses and the variations in prices.

On the other hand, getting couples to talk for the previous story took about six months, she says. “Two couples were finally willing to speak if I used their English nicknames,” she says. 

Photo by iStock

Ken Bensinger of the Los Angeles Times tells the story of people who paid more than $350,000 for lifetime unlimited first-class travel on American Airlines. Their AAirpass program travels earned them more than 30 million frequent flier miles each.

Ken starts the story with two men who purchased the passes and writes:

“But all the miles they and 64 other unlimited AAirpass holders racked up went far beyond what American had expected. As its finances began deteriorating a few years ago, the carrier took a hard look at the AAirpass program.

The AAirpass system had rules. A special ‘revenue integrity unit’ was assigned to find out whether any of these rules had been broken, and whether the passes that were now such a drag on profits could be revoked.

Rothstein, Vroom and other AAirpass holders had long been treated like royalty. Now they were targets of an investigation.”

Ken says the story idea came after he and a colleague discussed how much value they’d place on lifetime contracts. Curious, he searched to see if one had ever existed. That’s when he found American Airlines’ program and references to lawsuits stemming from it.

“It was like a happy accident you stumble across,” he says.

Even better, a Factiva database search showed no one else had written about the issue, he says.  (He recommends using databases like Factiva and LexisNexis  instead of just relying on online searches.)

Ken Bensinger

The lawsuits led him to Rothstein and Vroom. He interviewed them face to face, and also spoke with their lawyers, who provided tons of information from lawsuits.

Today’s Tip: Ask lawyers for depositions.

Among the stacks of paper, emails and CDs were depositions, which provide detailed testimony taken outside of court. Ken says lawyers will reference quotes from depositions in their pleadings, but don’t file them with the court. Some court dockets note a deposition has been taken, while others don’t.

“With depositions, both sides have access,” he says. “If one side won’t give them to you, try the other side.”

Photo by Flickr

When Marilyn Geewax of NPR saw foreclosures and apartment vacancies increasing three years ago, she wondered where people had gone. “They had to be someplace,” she says.

She found Census data showing a 10 percent jump in number of households with multiple generations of adults. That prompted NPR’s series Family Matters: The Money Squeeze, which profiles three families.

The most recent segment explores the costs of at-home caregiving. Citing a MetLife report, the segment notes the typical woman’s lost wages average nearly $143,000. “That figure reflects the wages lost while not working — typically for about five years — as well as lower wages after returning to the workforce with rusty skills. When foregone pension and Social Security benefits are counted, the out-of-pocket losses roughly double.”

Today’s Tip: Use insurance company studies and newsletters to gather data.

Marilyn Geewax

The MetLife study provided a lot of data for the segment, including annual costs for various types of adult care.

Reporters can find studies by searching for insurance companies online. Also, AARP offers data, Marilyn says.

The profiled families in the segment responded to Facebook queries, she says. She suggests reporters contact the Office of Aging in their areas, community centers and church groups to find families.

Another angle to consider is the lack of community resources to handle elderly care, Marilyn says. Many community centers and aging programs have had funding cuts.

Sun-Sentinel reporters searched tax records for homeowners, coming up with a long list of banks.

Megan O’Matz and John Maines of the Florida Sun Sentinel found a way to quantify the number of bank-owned abandoned houses in foreclosure. Using data to determine who owns the properties, Megan and John found the proliferation of vacant, often untended properties is partly fueled by ownership uncertainties. In part one of their three-part series called Bad-Neighbor Banks: How Big Lenders Spread Blight, they write:

“The Sun Sentinel, in its investigation, identified banks as owners only in cases in which they held title to the property. But the newspaper also found that years after launching foreclosure suits, some banks or their agents balk at completing the process and taking title to homes that are unlikely to sell for much. That practice fuels a separate legal “limbo’ problem that traps thousands of vacated homes in years-long court cases, often as they tumble into ruin.
Banks pay little price for letting neighborhoods rot.”

In one case, a child drowned in an abandoned property’s pool that “was unrecognizable as a place to swim,” the story says.

Today’s Tips: Tools to track abandoned bank-owned properties. 

Megan O'Matz

Megan and John searched county tax rolls and property appraiser data to determine how many bank-owned homes existed in the area, Megan says. Using key words such as “mortgage” and “loan” along with bank names led them to more than 19,400 properties owned by bank and other mortgage lenders in Palm Beach, Broward and Miami-Dade counties. That compares to only 2,500 a little more than five years ago, she says. They used those numbers to create a graphic.

Determining how many properties were empty or abandoned proved to be a bigger challenge. Tax rolls and property appraiser records don’t indicate if a home is abandoned, and Florida census numbers don’t exclude vacation homes. They soon learned that several cities require lenders to “register” the addresses of foreclosed homes when they become vacant no matter who holds the title, she says. Some cities submit a list of properties to VacantRegistry.com, a private service. For others, Megan and John had to call. From those sources, they counted more than 17,350 foreclosed properties registered as being vacant in Miami-Dade, Broward and Palm Beach counties, she says.  “As you can imagine, homes are sold and foreclosed on every day, so you really can only get a snapshot in time,” Megan says. “We think there is overlap, maybe considerable overlap, between the 19,400 we plotted on the map and 17,350 we counted on the registry.”

They also relied on property code violations. They looked for information including addresses, owners, inspector comments, and dollar amount for fines or liens. They sorted through the data to find bank names from among the owners.  Megan says they found more than 10,000 violations against banks in a small sample of 100 municipalities in the area. “If we had been able to obtain and work with data from the whole region, the numbers would be considerably higher,” she says.

Finally, code enforcement offices in some of the cities provided inspector reports and photographs of rotting houses.  “They have the tough job of sorting out the proper owners and want to talk about the frustration of this side effect from the foreclosure crisis,” she says.

With all of the data, there was still one other problem: understanding who handles what, she says. The roles of trustees, loan servicers and master servicers weren’t clear. Even some attorneys and real estate agents she contacted didn’t know, she says. She finally found bankers and Securities and Exchange Commission documents to clarify. Lucky for us, she used the information to create a graphic explaining all of the relationships.

Screenshot from the Detroit Free Press' reporting on the economic recovery in Michigan.

Katherine Yung and Greta Guest of the Detroit Free Press give readers a macroeconomic view of Michigan’s recovery. They offer perspectives from several areas: businesses, social service agencies and sports. The story notes that the Detroit Red Wings sold out their home game season for the first time in five years. They write:

“From rising home sales to a sharp drop-off in first-time filings for unemployment benefits, the economic data clearly show that Michigan’s economy has left its darkest days behind, thanks in large part to the comeback of the Detroit automakers.”

The story also acknowledges that “there’s a long way to go before the damage wrought by the great recession is completely repaired.”

Today’s Tip: Check the economic recovery status in your area by looking at deeper data.

Real estate and unemployment have been the key tools in measuring the economic recovery. But to get a broader view, Katherine turned to other sources as well.

She uses the Bureau of Economic Analysts to track growth in personal income. The U.S. Census Bureau provided information about state tax receipt information. The Bureau of Labor Statistics provided inflation rate information as well as unemployment data. The actual numbers helped create the story’s graphics.

Katherine Yung

She also checked the pace of bankruptcy filings, and interviewed area economists and state economic development agency officials.

From there, she sought the stories of real people.

“I thought about types of businesses that would be sensitive to how the economy is doing,” she says. ‘Then I brainstormed about which local companies would be good to call.”