Magazine article Mortgage Banking

LPS HPI Updated to Better Reflect Non-Distressed Market

Magazine article Mortgage Banking

LPS HPI Updated to Better Reflect Non-Distressed Market

Article excerpt

0n April 9, Jacksonville, Florida--based Lender Processing Services Inc. (LPS), announced it had updated the way it calculates its home-price index for sales concluded during January 2012. As a result, its measure of home-price changes now accounts more accurately for the impact of short sales on broader market prices. The index will also now incorporate broader geographic coverage because of the inclusion of Federal Housing Finance Agency (FHFA) home-price index (HPI) data, the company said.

"With proper accounting for short sales, we see two things. First, prices on normal (non-distressed) properties are doing a hit better than had been estimated before. The dramatic fall in prices after the bubble is actually closer to 26 percent, less than the 3o percent which we and others have previously reported," said Raj Dosaj, vice president of LPS Applied Analytics. He noted, "This is due to the fact that many of the short sales appear to be the same homes that saw over inflated values during the bubble."

The second conclusion LPS drew after making the revisions to its house-price index was that servicers were getting about the same price on both short sales and foreclosure sales in areas with high levels of distressed transactions. …

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