Abigail Field’s latest article is a must read. Forget the energizer bunny, this just keeps going and going…it does not stop.
from DailyFinance
When an LPS client has a mortgage that goes into default, Lofton explains, LPS starts managing the loan. In order to do that, the appropriate LPS employees are given login information for the bank’s database. As a security measure, each login is unique. That login grants access to the bank’s entire database of current and defaulted loans, so that the employee can address whatever problem exists. For example, if a payment that should have been applied to a defaulted mortgage was accidentally credited to a current mortgage, the LPS employee needs access to the current mortgage to fix the error.
When an employee can’t fix or reconcile data in an account, she is supposed to enlist the help of her supervisor, and if needed, her supervisor’s supervisor. Each manager also has unique login information, and each bank apparently has additional security protocols that LPS employees are supposed to follow. If the employees and supervisors were following the rules, all would be relatively well. But according to Lofton, they were not:
“…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.
110. With this unauthorized access to the Bank’s computers, the [LPS] associates could go into the banks computer files and manipulate the data….
112. I was particularly concerned that during “crunch” times …Team Associates were cutting corners….
116. When an employee cut corners, the employee left out one or more steps that should have been performed and had to make something up.
117. The problem caused by cutting corners might not come to light until six months down the road when an attorney asks questions about the billing record.”
For you to understand a little more about “the 4 minute foreclosure” you first have to know some key players in the controversy surrounding the foreclosure process today. I included a few excerpts from an article written by Gerlad B. Alt for DS News March of 2007 that you will find at the end. I only wish MERS was included in this article because without this device none of this would have been made possible.
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a public government sponsored enterprise (GSE), headquartered in the Tyson’s Corner CDP in unincorporated Fairfax County, VirginiaFreddie Mac, one of America’s biggest buyers of home mortgages, is a stockholder-owned corporation chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of home-ownership and rental housing.
Freddie Mac was the first investor to improve on the so-called standard timeframes by tightening the noose and imposing what seemed at the time like draconian and arbitrary standards for completion of legal actions for foreclosure and bankruptcy. To reinforce its point, the Federal Home Loan Mortgage Corporation adopted a designated counsel program under which the attorneys chosen to participate were expected to meet and be graded against these more stringent dates.
LOGS Network is a multi-state network of title companies and law firms and connecting them via a proprietary web-hosted software system. They developed a proprietary statistical program called ASAP (Attorney Scorecard and Performance) to help manage the more than 250 law firms its outsourcing division. By introducing , invented the field counsel industry that serves residential mortgage banking. LOGS Network was co-founded by Gerald M. Shapiro of Shapiro & Fishman PA a law firm who handles foreclosures for the financial industry. His network held a virtual monopoly on all foreclosure and bankruptcy work nationwide until the early 1990s. In addition, he preempted the entire industry by creating the “cradle to grave” concept through business developments in title, closing, document preparation, foreclosures, REO, outsourcing, collection, and debt acquisition businesses.
Fidelity National, a national default outsourcing and information provider, was one of the first in the industry to implement time-frames a high priority instead of a guideline standards. It instituted a policy recognizing and rewarding those attorneys who did work for its clients in a consistently shorter time than their competition. Fidelity mentality was the faster the better and by publicizing and comparing the time to completion of various legal tasks among the hundreds of law firms doing work for its client base. It created a demand for attorneys to keep up with their business practices in the same sequence that other industries have had to in the sense of “recreating the wheel” so to speak to keep up with growing competition.
By having a goal of recovering nonconforming assets for the servicers this put pressure on the time frames they had in order to recover title.
Of course, when the only acceptable
test for quality becomes a simple test
of speed, it is inevitable that some of
the participants will feel compelled
to cut corners to stay in the game.
State your full name and current position.
Provide us with your definition of a document custodian.
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Do you retain images of original of all documents?
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Do you have a Records Compliance or Management Department?
Explain how it works, who is employed there, and where it is located.
Describe all information that you store electronically.
Do you have an ESI manager?
Who, where does he or she work, what does he or she do?
What is your policy on the retention of electronically stored documents?
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If yes, then explain how they work and how documents are achieved.
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State the name of the director or manager of your document archiving operation.
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State the names of all of the servers and the location of all such servers that contained any ESI data related to this case.
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IF so, please explain the extent of such access, how it is tracked, and purpose of the same?
Have you migrated any ESI data in this case from older, disparate media sources into modern managed tools?
If so, explain in detail the older data systems, how the migration occurred, and explain the new storage media used?
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Does your backup vendor use DLT4, LT01 or 4MM tapes?
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Do they use Backup Exec, NetBackup, Legato Net Worker, Trivoli Storage Manager, ArcServe, CommVault Galaxy or HP Omniback?
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Do you use Novell GroupWise or any others?
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If so, describe the media and how this is accomplished and by whom?
Explain all due diligence programs and procedures used to verify the integrity of your data?
Explain all due diligence programs and procedures used to secure and safeguard your data.
Do you maintain custody logs on the transfer of any ESI data?
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Do you have a “Best Practices” guide for of the operations described herein?
Can you produce it?
Pew family trusts which I am a beneficiary and/or remainderman have maintained
investments in various banks, mutual funds, and other entities that maintain
interests in various shares, mortgage backed securities and/or debt issuances and I
have been a shareholder in many mortgage companies including Fannie Mae,
Bear Stearns, JPMorganChase, Washington Mutual, MGIC, Ocwen and Radian,
many of which are members, owners and shareholders in Mortgage Electronic
Registration Systems, Inc. [MERS].
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