The company also recently warned that these very issues…
I get some pretty vicious comments on my blog at Marketwatch.com, just as I’ve gotten nasty comments on every public forum I’ve ever been a party of, from my days at TheStreet.com, Financial Times, Fox Business, CNBC, and so on. (For what it’s worth, the only exception would probably be when I got nothing but love from thousands of people after my Tonight Show appearance from 2007.) It comes with the territory. And I’ve explained before how when the viewer/reader hate-o-meter goes off the charts that it’s probably a good bet that I’m on to something with my analysis. In some sense, the hate-o-meter is one big doth protest too much, contrarian indictator, and Flip It all wrapped up into one.
And I tell you what — the comments I get whenever I write about LPS and why I think the company is likely to be a big scapegoat in the alleged robosigning/foreclosure-gate/document fabrication run rampant in the TBTF mortgage industry. Here are some of the comments from my recent LPS articles:
Maybe you copied them, you jerkface – Jaybob, June 23, 2011
I hope you stay in too long and lose your arse. – Xybizy, June 23, 2011
My personal favorite of late:
Poster Child for Broken Clock Syndrome. – Gilbert, June 23, 2011
Or this guy and a few others seem to blame me for LPS’s problems:
If you want to provide information to subscribers, that’s one thing. But, to continually do this in the way that you are — should not be allowed! – Stockman, June 23, 2011
I’ll answer that last one with by simply going back to my homework and analysis once again and letting them speak for themselves. Anybody doing serious homework on the foreclosure-gate crisis in all its iterations would come across when they’d find this article among many about LPS from Yves Smith that links directly to the May 10 Lender Processing Services 8K:
The Federal Deposit Insurance Corporation, in its capacity as Receiver for Washington Mutual Bank, filed a complaint on May 9, in the U.S. District Court for the Central District of California to recover alleged losses of approximately $154,519,000. The FDIC contends these losses were a direct and proximate result of the defendants’ alleged breach of contract with WAMU and alleged gross negligence of the defendants with respect to the provision of certain services by LPS’s subsidiary LSI Appraisal, an appraisal management company. In particular, the FDIC claims that the services provided failed to conform with federal and state law, regulatory guidelines and other industry standards, including specifically the provisions of the Uniform Standards of Professional Appraisal Practice. LPS previously described the possibility of this suit in its Form 10-Q filed May 5. In its complaint, the FDIC cites, as the cause of the damages claimed, 220 appraisals performed between June 2006 and May 2008. However, for more than 75% of the appraisals identified by the FDIC, LSI was contracted only to provide reviews of appraisals, not to conduct the initial, full appraisals. For these properties, the full appraisals were provided by other entities, unrelated to LSI. For all appraisals subject to this complaint, LPS believes there is no basis for a claim that LSI engaged in “gross negligence” or breach of contract related to these appraisal services.
Or as Abigail Field points out from this sworn statement from Adrian G. Lofton a former LPS employee that gave the New Jersey court that is investigating mortgage fraud in New Jersey:
“…109. …most of the [LPS] Associate Team members had gained unauthorized access to the logins and passwords of their team associates and supervisors for all of the bank servicers’ computers. With this unauthorized access to the Bank’s computers, the [LPS] associates could go into the banks computer files and manipulate the data. I was particularly concerned that during “crunch” times …Team Associates were cutting corners….When an employee cut corners, the employee left out one or more steps that should have been performed and had to make something up.”
Or even worse, would be if any of the allegations in this lawsuit City of St. Clair Shores Employees’ Retirement System v. LPS et al. Amended Complaint May 18, 2011 are true:
“Illicit practices were pervasive throughout the Company during theClass Period and included the fabrication of documents, “robo-signing,” the forging of documents, improper notarization, violation of security protocols, and the concealment of known mistakes from courts, attorneys, and clients. For instance, through DocX, theCompany engaged in the wholesale fabrication of mortgage assignments, which were filedwith county clerk offices and used as evidence by LPS’ clients in foreclosure proceedings toevict homeowners. Moreover, to increase the speed at which it processed mortgage-relateddocuments, LPS required its employees to engage in “robo-signing” and “surrogate signing.”“Robo-signing” involved LPS employees signing mortgage related documents at records peeds without verifying their accuracy. “Surrogate-signing” or forging, as it was internally known, involved LPS employees forging the names of various bank officials on these same mortgage documents.”
Now if you’re doing your homework and trying to find some revolutionary trading ideas which means finding ways to actually try to profit from your homework…you’d probably decide that these issues, problems and trends are clearly not good for the stock. And pointing out these problems and the filings I’m finding them in and concluding that when there’s something out there that’s not good for the stock that it might be profitable to figure out how to short such a stock is not the problem for this stock or this company. Indeed, the only people that are accountable for this company’s stock price and this company are its executives and directors. Not guys like me with my, as many a commenter has called it, “mullet” hair do on some blog on the Internet who are fully disclosing what I’m doing as I’m doing it.The company also recently warned that these very issues, problems and trends that I’ve been highlighting for more a year now are now indeed impacting the company’s ability to make money and the stock really started getting hit.Look, my job these days is to research the markets from the top down and the bottom to find the very best trading ideas and then to write about those trading ideas for you guys here on my blog on Marketwatch and in my investment newsletter Revolution Investing published by Marketwatch and to outline the specific trades I’m doing for my own personal account with those ideas at TradingWithCody.com.
I am putting my money where my mouth is — as I’ve written many times before, I’m betting on an even bigger app/smartphone/cloud/tablet stock bubble and I’m betting against companies exposed to problems in places undergoing revolutionary changes such as the mortgage industry right now. And that includes LPS. And I will continue to do my job writing about what I consider to be the very best trading and investment ideas I can. And that means I’m going to continue writing about LPS and why I think it is such an opportunistic short idea. And I’m going to try to buy some more puts or short more of the common on any significant rallies as I have been since this stock was in the mid $30s.
