FHA Disputes Report That Foreclosure Starts Rose in April
The Federal Housing Administration is disputing a report that foreclosure starts on loans it insures spiked by 74 percent from March to April.
Lender Processing Services Inc. (LPS) may have erred extrapolating numbers from its database of information on 40 million loans in reporting yesterday that new foreclosures on FHA-backed loans rose to 63,126 in April from 36,311 a month earlier, FHA spokesman Lemar Wooley said in an e-mail. The FHA said its own numbers showed an 11 percent drop to 18,975.
“The bottom line is that the numbers in the LPS report for April simply don’t accord with our data,” Wooley said.
The FHA is expecting an uptick in foreclosures because legal disputes between state and federal officials and mortgage servicers over faulty foreclosures were resolved with a $25 billion settlement in February, Wooley said. Foreclosures had been slowed while the parties were negotiating.
The report by Jacksonville, Florida-based LPS, which said overall foreclosure starts declined 2.6 percent in April to 181,584, attributed the FHA spike to the expanded role the government mortgage insurer has played since the collapse of private housing finance in 2008. Loan originations backed by the FHA, whose website bills it as the world’s largest mortgage insurer, tripled that year.
“LPS has every confidence in its data and believes that there is likely a simple explanation for the difference between our numbers and FHA’s reported foreclosure starts for April,” said Herb Blecher, senior vice president for LPS Applied Analytics. “We have reached out to the FHA directly on this, and will share our findings as soon as we have a definitive answer.”
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