LPS profits on mortgage origination services
Mortgage technology firm Lender Processing Services (LPS) grew from a net loss to a profit of $2.8 million, or 3 cents a share, for the fourth quarter of 2012.
That figure is up from a net loss of $21.2 million, or 25 cents a share, in the fourth quarter of 2011.
Full-year earnings for 2012 hit $70.4 million, or 83 cents a share, down from a profit of $96.5 million, or $1.13 a share, in 2011.
A 15% annual gain in revenue from origination services pushed LPS’ income higher even as fourth-quarter revenue in the transaction services segment fell 7.7% to $311.7 from a year earlier. This drop is partly attributed to a 26% decline in default services revenue.
However, the decline in default services revenue was somewhat offset by a 14.8% annual hike in origination services revenue for the fourth quarter of 2012.
"Default Services revenue and operating income decreased as a result of lower industry-wide foreclosure activity and strategic actions to reduce risk and enhance returns," LPS said. "Origination services revenue and operating income increased as a result of higher industry refinance volume."
LPS noted that it put certain legacy foreclosure processing and regulatory issues behind it, allowing the company to "focus more of its time and energy on growth and innovation," said Hugh Harris, president and CEO of LPS.
In late January, the company announced it would settle foreclosure and documentation processing issues with 46 state attorneys general and the District of Columbia for $127 million.
The firm’s technology, data and analytics revenue grew 8% over the previous year in the fourth-quarter.
And for the entire 2012 fiscal year, origination services revenue rose 20% from 2011 to $625 million.