Nevada sues home foreclosure firm
The state of Nevada has filed a lawsuit against a Florida firm responsible for more than half of the nation’s annual foreclosures, claiming that it defrauded homeowners and turned them out of their houses without due process.
On Dec. 16, Attorney General Catherine Cortez Masto filed the suit against Lender Processing Services Inc. and its subsidiaries — collectively known as LPS — a Jacksonville, Fla., firm that processes foreclosures for a number of banks and lending institutions. The lawsuit includes allegations of widespread document falsification, forged signatures, deceptive statements made by LPS, misrepresentations about LPS’ fees and services, and evidence of an overall press for speed and volume that required employees to execute and/or notarize up to 4,000 foreclosures a day.
“The robo-signing crisis in Nevada has been fueled by two main problems: chaos and speed,” said Attorney General Masto. “We will protect the integrity of the foreclosure process. This lawsuit is the next logical step in holding the key players in the foreclosure fraud crisis accountable.”
The Office of the Nevada Attorney General recently indicted Gary Trafford and Gerri Sheppard as part of a separate, criminal investigation into the conduct of robo-signing scheme, which resulted in the alleged filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008.
LPS is also being investigated by California Attorney General Kamala Harris for its foreclosure practices.
In an article in the Los Angeles Times, LPS said it has been cooperating with the Nevada Attorney General’s Office for more than 14 months and it would defend itself vigorously against the charges.
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Several years of home sales data under scrutiny
Estimates of existing homes sold over the past five years from the National Association of Realtors (NAR) may have been overblown, the trade organization announced on Dec. 15.
NAR said it plans to downwardly revise sales of previously owned homes going back to 2007 on Dec. 21, when it releases its monthly home sales report.
Characterizing the adjustment of previously released numbers as “a year-long re-benchmarking process,” chief economist Lawrence Yun explained on the NAR website that a series of errors may have led to over-counting home sales, including relying on data from the Multiple Listing Service (MLS) and outdated 2000 U.S. Census numbers.
NAR hasn’t revealed exactly how big the revision to home sales will be. Yun did say, however, that the decrease will be “meaningful.”
“For the real estate business, this means the housing market’s downturn was deeper than what was initially thought,“ Yun said.
According to Yun, NAR became aware of the upward “shift” in data during its most recent re-benchmarking process this year. With the help of the government, economists and real estate groups, the NAR will release revised numbers on Dec. 21 at 10 a.m.
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Builder confidence rises again
Builder confidence in the market for newly built, single-family homes rose two points to 21 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December. This marks the third consecutive month in which builder confidence has improved, and brings the index to its highest point since May 2010.
"While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. "However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving."
Builder confidence primarily gained strength in the South in December, where a four-point gain to 25 brought that region’s HMI score to its highest level since March 2008. A one-point gain to 16 was registered in the West, while the Midwest held unchanged at 24, and the Northeast slipped one point to 15.
The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." Builders are also asked to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
"This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend," said NAHB chief economist David Crowe. "While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months."
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