Did the FHA’s Foreclosures Really Rise by 73 Percent?

Did LPS publish flawed data about the FHA's foreclosures?

Lender Processing Services (LPS) made quite a stir last week with its report that foreclosures on Federal Housing Administration (FHA)-guaranteed homes rose by 73 percent in April.

Naturally, the FHA, feisty as ever, is not taking that claim mildly, and it has released its own numbers to contradict the now widely-cited LPS study. Here are the main areas of contention regarding the data:

  • LPS stated there were 63,129 foreclosure filings in April for FHA loans, but a spokesman from HUD has said that their data shows only 19,000 foreclosures for the month, or an 11 percent decline from March.
  • The issue, the HUD spokesman said, is LPS’ data pool; because it uses a sampling method, its numbers are flawed, but HUD has access to the full FHA inventory numbers.
  • In a statement on the discrepancy, LPS Senior Vice President Herb Blecher said the firm remains confident with its data, though it is working with the FHA to reconcile the numbers.
  • Perhaps most interestingly, HUD is not ruling out an increase in 2012 foreclosures; with the mortgage settlement a done deal, such projections have been lingering for months.

The FHA’s finances and balance sheets are constant media fodder. What do you think this data discrepancy adds to agency’s ongoing budgetary problems?

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  • Tanner B. says:

    Ah, LPS – their ‘technology’ amounts to nothing more than sweatshops full of robo-tards helping to hold down the homeowners while the banks fee-rape them before foreclosure. LPS is the banks whore, doing whatever dirty job the banks want a little distance from. Phony docs. phony titles, phony appraisals, LPS is right in there with its greedy paw out for more bank $. Like all whores, though, its days are numbered.

  • Susan says:

    Ah, Tanner – you don’t really know much about that company, do you? Get all your info from the interwebs, maybe? Anyway, that sort of mudslinging’s not really here nor there.

    The question here is whether the numbers being reported are to be believed, and when it comes to their mortgage data, LPS is very much considered the industry leader.

    But then again, we all know how crackerjack government agencies are when it comes to record keeping, right? Exactly.

    Either way, it looks like the two of them have met somewhere to figure out the differences, and I’m sure we haven’t heard the least of it. Though one has to wonder whether FHA will – if we find out LPS was right – be as loud in admitting their mistake as they were in disputing the report in the first place.

    And, likewise, if LPS is proven to have made the error, whether they’ll make as big of a splash issuing a correction.

    But: given the wiggle room in FHA’s statement, I know where I’m placing my bets.

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