LPS Applied Analytics Introduces LPS Home Price Index

by Marilyn Wilson on July 11, 2011

JACKSONVILLE, Fla. – July 7, 2011 – Lender Processing Services, Inc. (NYSE: LPS), a leading provider of mortgage and real estate technology, data and analytics, today announced that its LPS Applied Analytics division has introduced the LPS Home Price Index (HPI). The LPS HPI shows historical price trends for residential properties in the United States, offering cost-effective estimates of property values that underlie residential mortgage portfolios and securities.

Leveraging LPS’ unique data sources and innovative algorithms, the LPS HPI offers broad coverage with high geographic resolution. It comprises more than 13,000 ZIP codes nationwide, including many in non-disclosure states. Within each ZIP code, the LPS HPI provides five price tiers to show price range and patterns of change for entry-level homes, high-end homes and homes in the middle market.  REO discounts down to the ZIP code level are also provided and used to correct for distortions that otherwise occur when REO sales are included in HPI calculations. Together, these features make the LPS HPI a reliable tool for estimating borrower stress, negative equity and potential for default and loss — essential factors for today’s decision makers.

Two LPS data repositories, SiteX Real Estate and McDash Loan Data, provide the foundation for the HPI. Together they provide data for approximately 75 percent of U.S. properties nationwide; 98 percent of these properties are indexed at the ZIP code level. LPS owns and maintains these repositories, which facilitates efficient processing, and allows the LPS HPI to show market trends up to two months before other available indices.

In addition to its accuracy and coverage, the LPS HPI also offers mortgage professionals and investors a stable view of home price trends. Using proprietary methods and refinements for smaller geographies, LPS ensures that its results portray a true characterization of the market.  For included geographies there are no gaps in historical data, and monthly updates result in minimal restatement.  The LPS HPI is a powerful foundation for portfolio management models.

“With multiple economic issues pressuring local home prices, it’s more important than ever that mortgage industry professionals have an accurate understanding of the property values collateralizing loans in their portfolios,” said Dan Berman, president of LPS Applied Analytics. “It’s not feasible to order updated appraisals or even Automated Valuation Model (AVM) reports for every property represented in a portfolio, but the LPS Home Price Index is a cost-effective means of estimating current property value, risk of loss and borrower stress.”

About Lender Processing Services

Lender Processing Services, Inc. (LPS) is a leading provider of integrated technology, services and mortgage performance data and analytics to the mortgage and real estate industries. LPS offers solutions that span the mortgage continuum, including lead generation, origination, servicing, workflow automation (Desktop®), portfolio retention and default, augmented by the company’s award-winning customer support and professional services. Approximately 50 percent of all U.S. mortgages by dollar volume are serviced using LPS’ Mortgage Servicing Package (MSP). LPS also offers proprietary mortgage and real estate data and analytics for the mortgage and capital markets industries. For more information about LPS, visit www.lpsvcs.com.

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