Somebody's Got to Do It

Everyone now knows about the foreclosure mess.

But somebody's got to do them eventually. Let's not forget that paperwork problems or not, these loans are in default.

So I bought a very small position in a clobbered company:

Buy 0.5% long position in DJSPW @ $0.23

These are August 2012 $10 warrants on DJSP, a Florida foreclosure paperwork company. These warrants become regular shares at expiration if DJSP is at $10 or more, so they act like a long-dated call option. There are no options on DJSP.

Lender Processing Services' (LPS) subsidiary, DocX, has a price list for banks that includes measures to "create missing intervening document," and "recreate entire collateral file." LPS is down to $27 from a 52-week high of $44, while DJSP is down from $13 to $2. Once (if?) the regulatory oversight is cleared up, I believe they could generate a healthy cash flow for years. Who knows, maybe fixing the document mess will raise the cost to banks along with DJSP's profit.