LPS Report Issued: Florida and the Judicial Foreclosure Process Get Zinged – Could There Be a Hidden Agenda?

Posted By on September 13, 2012

There’s another new report out on the state of the Florida real estate market, and South Florida home owners — people in places like Broward County or Miami-Dade — need to be aware of its findings.  The source is Lender Processing Services (LPS) and the name of the report is its “Mortgage Monitor Report”.  Here’s how LPS describes its Mortgage Monitor Report:

LPS Mortgage Monitor is an in-depth report of mortgage industry performance. The monthly report is based on data from the company’s market-leading repository of loan-level residential mortgage data and performance information, including more than 40 million active loans across the credit spectrum. This data is analyzed by LPS experts to produce more than 30 charts and graphs reflecting both trend and point-in-time performance observations.

You can read and download this latest Mortgage Monitor Report from LPS from its website.  And what you’ll find about Florida, to summarize things, is this – taken from their press release:

… In Nevada and Florida, two of the states with the highest percentage of underwater borrowers, more than three percent of borrowers who were up to date on their payments are 60 or more days delinquent six months later. This suggests that further home price declines – should they occur – could jeopardize recent improvements.

The July data also shows that non-judicial foreclosure states continue to see greater improvement in non-current rates (including loans 30 or more days delinquent or in foreclosure) than those in their judicial counterparts. On a year-over-year basis, judicial states have seen non-current inventories decline 3.1 percent as compared to an 8.7 percent drop in non-judicial states. Looking at the change from the peak, the non-current inventory in non-judicial states was down 31 percent compared to a decline of 13 percent in judicial states. A few states on both sides of the foreclosure process – Washington (non-judicial), New Jersey and Vermont (both judicial) still remained at historic highs as of the end of July.

“As negative equity increases, we see corresponding increases in the number of new problem loans,” said the Senior Vice President of  LPS Applied Analytics. “More than 3% of borrowers who were up to date on their payments are 60 or more days delinquent six months later.”

Larry Tolchinsky’s Tip:

If the name “LPS” sounds familiar, it should.  Lender Processing Services has been in the cross-hairs of June Clarkson and Teresa Edwards, those two Assistant Attorneys General who were ferreting out all that foreclosure fraud until their were fired last year, for a long time as a real evildoer in the Florida Foreclosure Fraud mess.  (For details, read our eBook that’s offered for free in the right sidebar).

In fact, Clarkson and Edwards considered LPS as the real Villain behind all the robo-signing and other frauds, and they still do:  read this Miami New Times article for more on what they’re doing.

The FDIC has sued LPS for appraisal fraud, too.  The federal government included in its lawsuit against Lender Processing Services a public record that lists 89 different Florida appraisers, by name, and at that point in time 35  of those appraisers already had disciplinary actions against them before the Florida Real Estate Appraisal Board. (We’ve covered this in past posts, including providing a link for getting access to that complete list of names – go here to learn more about all that horror.)

So, when LPS issues this nice, tidy report that gets a nice welcome in the media and various industry publications, one has to wonder what is happening here.  Because in this report, LPS is clearly distinguishing between states that do not have the protections of court oversight of bank foreclosures (non-judicial states) and ones like Florida, that do (judicial foreclosure states).

LPS Report Warns of More Defaults and Frets Over Judicial Foreclosure States.

In LPS’s new report, we learn not only that almost 20% of American homeowners are current on their monthly mortgages (even though the house’s value is less than the home loan they’re underwater) but that there’s a big concern that if values fall much further, that these folk are going to default too.

“As negative equity increases, we see corresponding increases in the number of new problem loans,” LPS reports. “In Nevada and Florida, two of the states with the highest percentage of underwater borrowers, more than 3% of borrowers who were up to date on their payments are 60 or more days delinquent six months later. This suggests that further home price declines – should they occur – could jeopardize recent improvements.”

And next, LPS finds that non-judicial foreclosure states have “greater improvements with delinquency rates falling faster” as compared to the judicial foreclosure states which aren’t keeping up: they are “not seeing non-current loan rates drop at the same rate.”  Moreover, LPS finds that nonjudicial foreclosure states had almost 10% (8.7%) decrease in inventories where mortgages weren’t current while judicial foreclosure states only had a decrease of 3.1%.

Enough on all this mumbo jumbo.  Bottom line, looks like there’s another log on the fire here that has been started by those who want to change Florida from being a state where foreclosures have to be filed as lawsuits down at the court house, so a judge can oversee what is happening.  So things like FRAUD and things like banks trying to just cancel their foreclosure lawsuit when faulty affidavits are found to avoid getting in trouble (the pending Pino case) won’t be such a big, thorny problem for lenders.

No surprise that LPS would like nothing more that to avoid having to face a judge in each and every foreclosure action that is filed in the State of Florida.

As  I have been saying, it’s the Wild Wild West out there.  Once again, it’s imperative that Florida home owners – particularly those with underwater mortgages – get an experienced Florida real estate attorney to work with them as soon as possible to fight against any attempted foreclosure of their home.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655.

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