If you watched last week’s political theater on Capitol Hill — a series of congressional hearings into the document errors that have plagued lenders and servicers — you might have seen Rep. Maxine Waters (D-Calif.) waving a pricing sheet from a company called DocX
in the face of a panel of mortgage servicing executives, wanting answers.
This pricing sheet has ignited a firestorm of criticism from consumer groups, as well as helping at least in part to fuel an investigation
from the Florida Attorney General — and after last week, is now part of Congressional evidence, too.
Jacksonville-based Lender Processing Services
[stock LPS][/stock], which acquired DocX in August 2005, hasn’t been spared these groups’ ire. In fact, Carol Asbury, the Florida-based foreclosure defense attorney that first posted the DocX pricing sheet
on her blog Oct. 2, characterized the document as “Lender Processing Services’ DocX document fabrication price sheet.”
Other consumer websites, including the Naked Capitalism blog, jumped on the document
and called it a “bombshell,” alleging that it proved LPS was engaged in forging mortgage documents.
Yet no one, apparently, bothered to ask where this document actually came from. On her blog, Asbury merely said it was “from the catalog,” and provided a nondescript PDF document without source attribution.
There's just one problem with all of this: Not one person I've spoken to in the industry, including clients of the DocX business unit, say they've ever seen such a pricing sheet. Not one. Some even suggested to me that the document might have been fabricated. (LPS, for the record, declined comment.)
The truth? Can you handle the truth?
Here's the real bombshell about the now-infamous DocX pricing sheet: It is very much real, but it was in use more than a decade ago, and last seen years before LPS actually acquired Docx in late 2005. No wonder my sources couldn’t remember seeing it. Who would recall a 10-year-old pricing sheet from a then-much-smaller company in an obscure corner of the mortgage services world?
Look at the below image, taken from the PDF document
posted on Asbury’s blog:
Now, look at this link
— from October 9, 2000 — and also imaged below for comparison purposes:
It’s pretty clear that whomever created the DocX pricing sheet in PDF form posted on Asbury's blog (I have no idea if Asbury is the original source, of course) stripped it out of an online web site archive. What this means is that this isn’t a secret document, nor is it anything resembling a current one. It was
a public document dating back to 1998, and apparently in use through 2002/2003 according to my search of the archives at the Wayback Machine
; and it is still
a public document, insofar as it’s freely available in the Internet archives for anyone to link to.
A little additional research shows, too, that the GetNet business line at DocX — the service that spawned the pricing sheet in question — apparently ceased to exist in 2003.
Let’s leave aside for a moment the interpretation of service line items on this Y2K-era pricing sheet. I wouldn’t claim to truly know what “recreate entire collateral file” ultimately means, for example, although consumer attorneys suggest it means forging documents from whole cloth. (I’ve of course been told otherwise by title industry experts.)
The real issue here isn’t what’s actually on the pricing sheet. It’s the time frame in which it was actually used.
How can anyone reasonably suggest that a pricing sheet from a decade ago, for a service line that apparently was discontinued seven years ago, is in any way reflective of recent services? Wouldn't the fact that the GetNet service line seems to have been discontinued by DocX be just as likely, if anything, to serve as evidence that the service wasn't broadly adopted?
Using this same pricing sheet to then attempt to implicate LPS stretches the bounds of the believable, too, given the significant differences in time between when the document originally existed and when DocX was eventually acquired.
We don’t know for certain what customers DocX had in the 1998-2003 period that used the GetNet service, if any. Nor do we know for certain how a service line that apparently last existed seven years ago has any actual relevance to what is done in document services today — in fact, I’d bet that most borrowers don’t even have the same loan today that they did seven years ago.
But I can clearly see the effect of omitting such critical information: Consumer groups get in a lather, state attorneys general demand a complete accounting of DocX activities, companies that provide mortgage services get dragged through the mud, and our congressional leaders use the document as evidence to indict the entire servicing industry. That’s quite a coup.
A double standard?
Foreclosure defense attorneys have been very aggressive in asserting that banks and servicers are routinely lying to consumers; and banks and servicers are now, as a result, subject to intense scrutiny over all of their actions. That’s not necessarily a bad thing, as we’ve seen in the robo-signing scandal and associated fallout.
But the same level of scrutiny now applied to servicers ought to apply to both sides of this very heated debate, including those making the accusations. That those so aggressively accusing mortgage servicers of lying and fraud may themselves also be guilty of the same is a troubling trend. Because it begs important questions: What other fact patterns have been twisted around? Who can we really trust to tell the truth here?
Given the political, legislative and judicial leverage that is now at stake in the battle over foreclosures — the outcome of which will largely determine the future of housing finance in this country — doesn’t it make sense for all of us to question what we hear from everyone? Shouldn't we at least be consistent in the standards we judge by?
Because in the dispute over foreclosures, as with nearly every other dispute in life, reality ultimately lies somewhere in between two extremes.
Paul Jackson is the publisher of HousingWire.com and HousingWire Magazine. Follow him on Twitter: @pjackson.