Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



What's Next at Lender Processing Services?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

This article is part of our Rising Star Portfolios series. You can read about the Dada Portfolio here.

This morning, Lender Processing Services (NYSE: LPS  ) , a major provider of back-end support for the mortgage industry, reported a 5% rise in revenue for the fourth quarter. Earnings declined 6%, while earnings per share rose 1%, to $0.78 per share.

If you want to adjust those earnings for a "non-recurring accrual adjustment in our Loan Transaction Services segment" and the fairly expensive departure of LPS' former CFO -- as the company does -- you end up with a 12% rise in earnings per share.

The mortgage and foreclosure booms in recent years have been a boon for LPS. And there is a large backlog of various fees and foreclosures coming down the pike over the next few years as a result of a difficult economy, unaffordable mortgages, and junk fees.

Still, revelations about shoddy recordkeeping in the housing market and the possible enormity of the foreclosure fraud scandal have the potential to throw a wrench in the booming market for foreclosure processing. Bears point to LPS' high leverage and legal exposure to alleged robo-signing and fraudulent foreclosure practices. There are signs of trouble as judges are increasingly pushing back against some of some of the notorious deficiencies by servicers, and LPS' CEO described the current environment as "sluggish."

It'll be interesting to see how this political and legal struggle between the mortgage industry and servicers such as JPMorgan (NYSE: JPM  ) , Bank of America (NYSE: BAC  ) , Wells Fargo (NYSE: WFC  ) , and Citigroup (NYSE: C  ) on the one hand, and homeowners and state attorneys general on the other.

You can follow the Dada Portfolio on Twitter @TMFDada, or visit our discussion board here.

Ilan Moscovitz doesn't have an interest in any of the companies mentioned in this article. The Fool, through the Dada Portfolio is short Lender Processing Services and Bank of America. Through another Rising Stars portfolio, The Fool owns shares of Bank of America and JPMorgan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1436259, ~/Articles/ArticleHandler.aspx, 10/20/2016 5:29:02 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 -4.58 -0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 4:00 PM
BAC $16.56 Up +0.09 +0.55%
Bank of America CAPS Rating: ****
C $49.58 Up +0.10 +0.20%
Citigroup CAPS Rating: ***
JPM $68.26 Down -0.09 -0.13%
JPMorgan Chase CAPS Rating: ****
LPS.DL $0.00 Down +0.00 +0.00%
Lender Processing… CAPS Rating: ***
WFC $44.93 Down -0.33 -0.73%
Wells Fargo CAPS Rating: ****