DOCX Price List Shows Purchased Perjury

Yves Smith of Naked Capitalism has uncovered a price list from a company called DocX that specializes in “document recovery solutions.” DocX is the technology platform used by Lender Processing Services to manage a national network of foreclosure mills. The price list includes such things as “Create Missing Intervening Assignment,” $35; “Cure Defective Assignment,” $12.95; “Recreate Entire Collateral File,” $95. Notes Smith:

    [C]reating . . . means fabricating documents out of whole cloth, and look at the extent of the offerings. The collateral file is ALL the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage backed security holder. This means most importantly the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.

How do you recreate the original note if you don’t have it? And all for a flat fee, regardless of the particular facts or the supposed difficulty of digging them up.

All of the mortgages in question were “securitized” – turned into Mortgage Backed Securities (MBS) and sold off to investors. MBS are typically pooled through a type of “special purpose vehicle” called a Real Estate Mortgage Investment Conduit or “REMIC”, which has strict requirements defined under the U.S. Internal Revenue Code (the Tax Reform Act of 1986). The REMIC holds the mortgages in trust and issues securities representing an undivided interest in them.

Denninger explains that mortgages are pooled into REMIC Trusts as a tax avoidance measure, and that to qualify, the properties must be properly conveyed to the trustee of the REMIC in the year the MBS is set up, with all the paperwork necessary to show a complete chain of title. For some reason, however, that was not done; and there is no legitimate way to create those conveyances now, because the time limit allowed under the Tax Code has passed.

The question is, why weren’t they done properly in the first place? Was it just haste and sloppiness as alleged? Or was there some reason that these mortgages could NOT be assigned when the MBS were formed? Denninger argues that it would not have been difficult to do it right from the beginning. His theory is that documents were “lost” to avoid an audit, which would have revealed to investors that they had been sold a bill of goods — a package of toxic subprime loans very prone to default.

14 Responses

  1. No, but it’s out there.

  2. Bob G.

    Any luck finding that case?

  3. Bob G.

    The judge in the bankruptcy case you write about was likely not informed that the trust was “in default” , bailed out, and that no proceeds will any longer be conveyed to security investors. And, that the SPV trust is likely now back on the balance sheet of the security underwriter’s parent corporation by FASB 166 and 167.

  4. Can’t access the http://www.docx.com website.

    Is this outfit still in business?

  5. i do not care how old the price list is, I guess that with inflation and profiteering they may have increased the prices and may have aggregated or expanded some offerings. The result is the same.

    I also believe LPS shredding party has started!!!!

    AS FAR AS THE P.R. CAMPAIGN FROM WALL STREET, IT IS HAPPENING, WE NEED TO KEEP PUSHING, WRITING, CALLING, AND THEN DO IT ALL OVER AGAIN TOMORROW AND THE DAY AFTER TOMORROW.

    THEY ARE TRYING TO BURY THE NEWS AND THEIR CRIME. REMEMBER THEY OWN MADISON STREET AS WELL.

    BUT THEY DO NOT OWN ME.\\

    I CLOSED MY BANK ACCOUNTS IN CITBANK AND OPENED A BANK ACCOUNT AT A LOCAL BANK AND A CREDIT UNION.

    MY MONEY WILL NEVER GO TO FEED THESE THIEVES, NO MATTER HOW LITTLE IT MAY BE.

    i WILL BUY CASH, THE NEW U.S. ECONOMY.

  6. Folks, I’ve seen a fed bk case recently, where the court held that the mortgages could still be assigned to the trust, just wouldn’t allow for remic status, but wouldn’t impact whether the mortgages were actually assigned. I’ll try and find the case cite.

  7. Bob G:
    Now you’re thinking like a true Wall Street Tycoon! That’s what we should have started doing from the beginning. {{{LAUGH}}}

  8. Bob G

    You have some good ideas…But we better keep some of these to ourselves as a last resort.

  9. WELL I GUESS YOU COULD …ASK YOUR LOCAL BANK FOR DETAILS.

    OH ONE MORE THING YEAH THAT’S FRAUD UPON THE COURT.

    PITCHFORK & TORCHES MARCH ON DC FOLKS
    GETTING CLOSER !

  10. mack the knife: loans must be assigned within the cut-off date assigned to that security-typically the date the 10k is filed. 8k’s are filed during the aggegation period.

  11. Neil: While listening to their last conference call with their investors on October 6, LPS’s CEO stated with disdain that that price sheet was ridiculous and that it was more than ten years old. When the investor (I believe it was Barclays) asked if it was BEFORE LPS purchased Fidelity, he said, “YES”.

    My question: Is there anything on that price sheet that would “date it”. Meaning a document or process that wasn’t in existence ten years ago?? Just curious, because the SNOW JOB they gave their investors on that call was incredible. They should NOT lie to their investors like that… as if they are STUPID and don’t follow up on their statements. Thanks

  12. I’d like to see a copy of this DocX price list, LPS is a party to my securitization and I’m in US Dist Court in Northern California. Also, if the REMIC language is available as it relates to the property being conveyed within the same year as the MBS, this is invaluable when compared to the County chain of title.

  13. Tax evasion, anyone? Hey, if you can fool the people and fool the courts – why not the IRS? The IRS is always the last to catch on.

  14. Hmmmm. So why couldn’t a homeowner order up one of these “original” notes indorsed in blank, then indorse it over to himself, and then mark it “Paid In Full?”

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