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

by Chicago Agent

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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