Jeremy Pomerantz is senior vice president of Nationwide Title Clearing
. Recent events in the mortgage industry are being widely misrepresented in the press, in his opinion. So it is in this regard that Pomerantz believes that a little education can go a long way.
HousingWire: Can you tell us what NTC is and what you guys do?
Nationwide Title Clearing provides a variety of services to lenders, servicers and investors that are focused on the post-closing side of the mortgage market. Although we have expanded to cover many services not related to document preparation, when we do prepare documents they are primarily lien releases, through which a mortgage/deed of trust is released from title. This typically happens when a homeowner has paid off a loan through the sale of a home or through refinance. Our main document service benefits homeowners by making sure they have a clear title (hence the origin of our company name).
Our lien release service is often ordered along with one or more additional value-added services, such as recording, tracking and imaging the document, ordering the collateral file, mailing documents to homeowners with customized cover letters for clients, e-recording, etc.
We also prepare mortgage assignments for servicers/investors to fulfill the purchase and sale agreement and/or land record requirements, although that volume is significantly less than lien releases. Typically we perform our assignment services for bulk sales of portfolios on behalf of the current owner of the mortgage servicing rights or for the investor. This is to ensure the title is clear. In that process, we review the recorded mortgage chain of title and identify deficiencies for clients to correct.
We offer a number of services unrelated to document preparation, including property reports and title searches, locating recorded documents and providing copies, final document tracking and imaging, among others. We also have a variety of other smaller services and customizations to meet each client’s need. That’s what we’re known for in the industry — the ability to design a service that can have many moving pieces, which also integrates with the client’s internal systems and processes.
As a result, we have to undergo rigorous third-party and client audits of our practices and standards, which range from employee background checks and drug testing to physical and IT security. We also have system and physical controls in place for each step in our processes.
All of our services are designed to keep the industry running smoothly and to provide vital functions and information to lenders, servicers and investors once a loan is closed. We aren’t in the business of foreclosures at all.
While we serve a wide range of different types of customers, we like to say that we’re actively contracted with eight of the nation's top 10 servicers as well as directly with the GSEs and the Federal Deposit Insurance Corp. (where we perform a variety of services related to seized portfolios).
HW: How has NTC coped with the volatile landscape of the mortgage title industry in the last six months?
Fairly well. We’ve actually grown quite a bit in the past year. Because banks have had to shift their efforts internally to vital activities such as loss mitigation and loan modification efforts, they need our services more than ever. At times, our biggest challenge has been meeting deadlines and scheduling projects due to overload, which we consider a better problem to have than too little work. Two or three years ago, the mortgage industry came to a standstill — that was far worse and harder to weather than current times.
Due to the stories being sensationalized in the mainstream media over the past year or so, we’ve proactively been reviewing every aspect of our processes, putting in any added layers of control needed to ensure every single process is solid and exceeds all standards. The motto around here is that we want to be bulletproof for our own and our clients’ security.
HW: We hear stories of people paying off their mortgage, then getting a foreclosure notice... can NTC help end this type of confusion by "tracking the note"?
Since we’re not really involved in the foreclosure process at all, I could only speculate as to why or how that could occur or how a payoff might cross paths with a process already set to occur. I am fairly certain this is not a common occurrence or systemic problem at all. But this brings to light what may be a bigger issue: Borrowers and mainstream reporters often don't understand what the difference between a note and mortgage really is and how it is handled by the industry.
Several reporters have reached out to us to comment for stories that just don't make any sense. For example, a reporter for a major mainstream media outlet called to say he believed that 500,000 notes have been lost during the foreclosure process. He was trying to find out if it behooved investors or servicers to lose or destroy the notes. He had heard from his “sources” that it cost $500 to pull a single file from a custodian and that it was of financial benefit for the servicer to not bother asking for it. I don’t think any of what he had heard was true, but it gives you an idea of how far from reality some of the nonindustry reporters concepts and sources are, and how little understanding they have of our industry.
We also have firsthand knowledge that some unscrupulous foreclosure defense attorneys are very willing to be sources of misinformation to reporters and judges in order to stall the process or win their cases. When that happens, articles or reports that contain erroneous information are propagated through the Web and read by everyone, including lawmakers who don’t understand the process. This can cause a general uproar and lead to “investigations” that are of no benefit to the borrowers or the financial industry.
HW: In an e-mail to HousingWire, NTC felt aggrieved with recent Bloomberg coverage linking the firm to robo-signers, where does Bloomberg get it wrong?
JP: A failure to understand how our industry works before taking a story to press has not been limited to a single mainstream media outlet. Many reporters who don't usually cover the mortgage or title industry are trying to write stories about what they're hearing in the marketplace and just getting it very wrong. It doesn't help that some anti-foreclosure attorneys are working very hard to make the issue more difficult to understand than it really is.
In the case of Bloomberg’s Nov. 15 story "No breaks for robo-signing computer stamping mortgage documents," we worked with the reporter to explain that lost-note affidavits can be prepared at any time during the life of a loan and is a normal "collateral document," not something specifically prepared for foreclosures.
We attempted to explain that at one time we offered a service through which we would provide documents relating to the mortgage collateral and then bundle them up with the other documents in the perfected loan file (original mortgage, note, assignments and related documents), then image them with trust receipts and forward them to attorneys working for the servicer. We no longer market that specific service. The reporter took that to mean that we were in the business of providing foreclosure documents. He considered the term “collateral documents” too industry-specific for his readers and left that part out. Despite our best efforts to describe where we fit into the industry, the reporter slotted us into his story where he needed us to be to make his case. Very disappointing.
In terms of the documents we sign and how we sign them, we sign them with correct authority, correct notarization and have completely audited practices, including our e-recording process. We aren’t signing affidavits for foreclosures, which require personal knowledge and really do need to be read by the person signing them. In fact, we sign no affidavits at this time, even if benefiting the borrower. The documents we do sign (lien releases and assignments) only require a signature to authorize the document and record it, and the person signing is not stating any personal knowledge. I believe 49 states only require the title of “authorized signor” on the document.
A handful of foreclosure defense attorneys are questioning how someone can sign on behalf of someone else and are trying to lead the media to believe that a provider couldn’t possibly sign as multiple entities — but that is the furthest thing from the truth. Our staff can only sign a document for an entity when our company and signors have been granted that power through a proper corporate resolution or power of attorney, otherwise we send it to the client to sign. We never allow a person to sign on behalf of someone else. All of the many providers, such as NTC, sign using these two methods of authority, and so do banks at times.
When you try to explain this to the mainstream press, it tends to fall on deaf ears. Instead, they’ve used the ambiguous term “robo-signers” to vilify anyone who signs any documents for the industry, even if they do so ethically and for the benefit of borrowers.
There are currently many untruths being spread unwittingly and broadly in the media and on the Web. We've found a number of papers and blogs defining assignments as “the” document that gives parties the right to foreclose on a mortgage. They are not prepared or filed for that purpose. Assignments just state in public land records, at any given time during the life of the loan, who owns the note or is servicing the loan. The right to foreclose is granted by the mortgage or deed of trust signed by the borrower when they took out the loan and signed the promissory note. That right is exercised when the borrower defaults on the mortgage and the owner of the note forecloses.
What we do is just the normal work of entering into the land records what has occurred during the life of that mortgage. The main reason the assignment has been labeled as a foreclosure document is because foreclosure defense attorneys have confused judges who are already overloaded and given this data to the media.
By attempting to confuse and undermine long standing industry-wide signing authority of nonforeclosure documents, a handful of foreclosure defense attorneys are thinking this is an angle to undermine most land records. That is very dangerous for everyone.
So, the Bloomberg story just highlights the issues we are facing. Unfortunately sometimes the reporters don’t want to understand or receive the correct information if it doesn’t fit the preconceived angle of their article.
Have someone who would be perfect for In This Corner? E-mail the editor.