Bankruptcy

The Business of Document Production

By Bob Lawless

In legal circles, "document production" is a term of art usually used to describe the transmission of evidentiary documents from one side to another as part of the discovery process in civil procedure. With the mortgage crisis, it also now can refer to the business of documenting the complex ownership chains that were created when mortgages were passed from originator to bank to securitization pool and then perhaps even further down the line. As Katie Porter commented a few weeks ago here at Credit Slips, there seems to be a boom industry in creating the documents to be back upon lenders' claims that they own a particular mortgage. (If you're unfamiliar with these issues, Porter's post provides the relevant background plus some links for more information.)

Now comes a Wall Street Journal story, courtesy of reporter Amir Efrati and Carrick Mollenkamp, saying there is a criminal probe involving one of the top providers of mortgage documents to the lending industry. According to the story, prosecutors are said to be "reviewing the business procedures" of Docx LLC, a subsidiary of Lender Processing Services, Inc. Given the problems that have been reported about mortgage documentation, I was surprised that this article did not get more attention. The article also links to some bankruptcy court documents where LPS services were used, and court sanctions are being sought. Well worth a read.

Full post as published by Credit Slips on April 05, 2010 (boomark / email).