Toxic house: one Countrywide shame at a time March 9, 2010

(This is a reprint of an article I wrote for my Examiner.com column in Sept. 2009. As of this writing — March 9, 2010, the only change that has taken place is the bank hired someone to build a new fence around backyard of this mess.)

COUNTRYWIDE’s TOXIC ASSET: House destroyed in 2006 fire still valued at $106,890

San Antonio – More than three years after a two-story house with a brick facade was destroyed by fire, it remains on the county tax appraisal rolls with a value of $106,890, and the walls have yet to be demolished even though the ruin is a clear safety hazard to neighborhood children.
    The house was built in 2000 and is surrounded by homes in the Sunset subdivision – a west Bexar County-based KB Home development, – that are all less than 10 years old.
    The year the house was destroyed, 2006, it was valued at $97,990. Two years later, the official valuation peaked at $110,470. The only reason the price came down a little is because the Bexar Appraisal District made a blanket reassessment of property values in light of the recession.
    But the house is worthless. Look at it. There is no roof. The interior was completely gutted. Portions of the back and side walls have caved in. And the two-story high front brick facade is just waiting for a good strong wind to knock it over.

Children, pets sometimes play in destroyed house. Photos by Adolfo Pesquera
    This article is not an indictment of the BAD, (more on that organization later; and they really should change their acronym), but a detailed autopsy on what happened to this property, on how it affected this working class neighborhood, and an in-your-face example of toxic assets.
    Call it ‘March of the Clueless,’ but going through the history of this property is a discouraging journey into how giant mortgage companies fail to deal with toxic assets – those legions of residential properties we keep hearing about that are worth much less than the institutional owners are willing to admit because that would reveal how weak their portfolios actually are.
    For more on that, read: ‘Major banks may report toxic assets as profits’ here.
    Back to this autopsy, here is a quick summary for those of you who have to leave after the first nine paragraphs: 

    Bexar Appraisal District DID NOT KNOW the house was destroyed until I called them on it earlier this week;  Bexar County Public Works DID KNOW about it, but they were not notified until last year;  Countrywide Home Loan Inc., the owner, most likely does not know the house’s condition, even though the Bexar County Public Works Division code compliance office made REPEATED ATTEMPTS to notify them;  Countrywide Home Loan Inc. is still paying taxes on the property, more than $2,000 last year, as if the property is still habitable and in good condition;  BUT (here’s the weird part) Countrywide is making NO ATTEMPT to sell the property (no real estate broker signage has been on site for some time);  oh, and ProComm, the law firm that acts as trustee for the homeowners association, filed a lien against the last occupant in January 2007, even though she lost the property to foreclosure six months earlier.
    How’s that for a comedy of errors?

    Now, let’s get back to the neighbors that have to live with this. Maritza Peña, 38, lives in the house immediately to the right of the ruin. She has two children, ages 6 and 11.
    She and her husband have complained off and on to whomever they can find in an official capacity.
    “We called the homeowners association,” Mrs. Peña said. “They said to call the bank. We called the bank. They said to call the homeowners association.”
    By Peña’s recollection, those phone calls took place the first year. Since then, she’s made complaints to the Bexar County Sheriff’s Office. On one occassion, she complained that children were getting into the house.
    “The fence fell down. I said, ‘I have kids. Somebody needs to do something.’ The dispatcher told me to fix the fence. My husband was in Afghanistan with the Army. I said, ‘Are you crazy? I can’t do that kind of job!’ I was so mad.”
    Peña has no immediate plans to move, but she added that should her family ever need to leave they would have a terrible time selling their house.
    “When this house is like that?” she said pointing next door. “Oh, no, no, no.”
    Patricia Kelley, 75, lives in the house immediately to the left. She uses a walker and it takes her awhile to answer the door.
    “It’s a hazard,” Kelley said of the house. “It attracts small children and animals. My cats go in there a lot.”
    Kelley moved into the neighborhood the day of Halloween, 2005. She remembers the evening the house next door caught fire the following July.
    “I was home. Somebody was banging on my door. But it was dark and I wasn’t about to go answer,” Kelley said.
    The person banging on her door, it turned out, was Mario Peña, Maritza’s husband. He was trying to get Kelley to evacuate. Kelley refused to leave her house until she saw a sheriff’s car pull up. The responding firefighters came from Geronimo Village Volunteer Fire Department.
    “There was no wind that night,” Kelley said. “The fire shot straight up.”
    Kelley and the Peñas were lucky the winds were quiet. The houses in this subdivision sit only 10 feet apart. Mario Peña and another neighbor were spraying the burning house with garden hoses. Peña was upset the firefighters took about 15 minutes to show up, but the VFD station is on Talley Road – 7.62 miles away.
    The firefighters could do nothing to save the burning house. It was in “full bloom,” as firefighters say. But they did keep the neighbors’ properties wet and safe.
    The timing of the fire was curious. Kimberly Butler, the previous occupant, moved out the week before, Kelley recalled.
    “She had been living there since before I moved in,” Kelley said. “I wasn’t even sure that she was not coming back. There was an above-ground pool in the backyard that was in the process of being installed.”
    What Kelley did not know was that Ms. Butler had not kept up on her payments. Countrywide repossessed the house on Independence Day, July 4th, 2006.
    I say Countrywide repossessed, but in all things involving giant mortgage companies, nothing is that personal.
    Alicia Hughes did the actual paperwork. According to county land records, where Hughes filed her affidavit, she was an employee of National Default Exchange L.P., then a subsidiary of Barett Burke Wilson Castle Daffin and Frappier L.L.P., the law firm of Countrywide Home Loans Inc.
    Countrywide, as the grantee (buyer), repossessed the property for $102,040, which I feel safe in assuming was the balance owed on Butler’s mortgage.
    The months passed and at first neighbors just assumed something would be done. It might take awhile, but surely something would be done. Then the Peñas decided to make some calls, but they never quite figured out how to get Countrywide’s attention.
    Sunset Vista Association Inc., through its HOA manager ProComm, was the first legal entity to take action. But their efforts were a bit misguided. ProComm agent Melinda K. Flowers, in an effort to enforce unpaid home owners association dues, fines and late charges, filed a lien with the Bexar County Clerk for $544.63 against Kimberly Butler, claiming she was still the owner of the property.
    That lien was filed Jan. 19, 2007. Butler was out of the house the end of June, 2006.
    Bexar Appraisal District, meanwhile, was obliviously raising the value of the house. The valuation went from $97,990 in 2006 to $104,430 in 2007 to $110,470 in 2008, and is presently set at $106,890.
    I asked Kelley if she thought the ruin next door was worth $106,890. That old lady looks cute when she rolls her eyes.
    Virginia Guzman, an employee in the residential section of the BAD, (there’s that acronym again), had a moment of spoken reflection when I explained that the house at 10143 Bastrop Creek was a flamed out ruin and had been so for more than three years.
    “I see that the valuation is $106,890,” she said.
    “I know that,” I said. “That’s why I’m calling.”
    “I am going to create an inspection request for someone to go out and visually inspect that property,” Guzman said.
    Okay. Now we’re making progress.
    Guzman explained that even after an inspector eyeballs the property, a reduced valuation will not become official until the next round of valuations are released in 2010.
    Better late then never, I say. But why did the valuation keep going up in the first place?
    Guzman explained that most properties are reassessed each year using data from recent home sales in the immediate area. There just are not enough inspectors to visually inspect each house in Bexar County.
    And if the owner does not protest, the valuation is never given a second look.
    Needless to say, Countrywide never protested.
    “I don’t think they know that it’s in that bad of a condition,” Guzman said. “Otherwise, why would they keep paying taxes at the value we give it?”
    And Countrywide is paying the taxes.
    Nancy Moreno at the Bexar County Tax Assessor-Collector office said Countrywide is current on its taxes for this property. Their last payment was made Dec. 30, 2008.
    The next bill is due this December, and it is for $2,295, AND fourteen pennies.
    The BAD may have been ignorant of the situation, but the Bexar County Public Works Division was not.
    “The first official complaint was made to our office in 2008,” said Carol Kendall, the nice lady that answers the phone in the Code Compliance office of Public Works.
    Code Compliance sent a certified letter to Countrywide on May 23, 2008 notifying the mortgage company/absentee owner of the property’s condition.
    “On June 10th, the letter was returned unsigned,” Kendall said.
    On June 17, 2008, a Code Compliance officer posted a second notice on the front door of the property, and in September of that year Code Compliance, following procedure, posted a notice in the city’s newspaper of record.
    I’m guessing Countrywide doesn’t read the newspaper, either.
    The case is now filed with the Justice of the Peace, Precinct 2, Kendall said.
    What does all of this accomplish?
    “Most of the time, we don’t do a total demolition,” Kendall said.
    The extent to which Public Works takes action to render a property safe will depend on the opinion of the county’s environmental engineer, she said. However, the case is still pending; there is no court date set for a hearing.
    Kendall is not optimistic anything will happen through the court soon. As she explains it, due process requires a lengthy amount of time to get a response from Countrywide’s “agent for service.”
    That would be CT Corporation System, Kendall said. Their headquarters is at 3 Winners Circle in Albany, N.Y., but Bexar County would be dealing with the Dallas office.
    CT Corporation System describes themselves as a Wolters Kluwer business, providing “intelligent software and service solutions that empower legal professionals to more effectively manage dynamic information, speed workflows and make critical decisions.”

¿WTF?

    I’m sorry. I have to laugh now. I think I’m going to hurt myself.
    Kendall has some experience with CT Corporation System.
    “This particular company, they’re hard to work with,” Kendall said. “They represent a lot of big mortgage companies. I don’t think it will do you any good to talk to them.”
    Ms. Kendall, I will take your word on that.
    Alright, in the whole scheme of our nation’s toxic asset mess, this is just one tiny spec, one real world example.
    Still, I feel I have learned a lot about how big banks and mortgage lenders operate versus how local public entities operate.
    Bexar Appraisal District is going to do something.
    Bexar County Public Works Division is trying to do something.
    And Countrywide is …. what?
    They are paying taxes on a pile of charcoal.
    It irks me that I’m helping Countrywide (now a Bank of America holding) by doing them the favor of getting the valuation lowered on a house they “don’t know” exists!
    I think they owe me $2,295.
    They can keep the fourteen cents.

    PS:  In the interest of full disclosure, I have a real property interest in that neighborhood. But that’s not why I’m exposing this mess. (I really do want the two grand. Is there a lawyer out there that thinks I have a case?)
    Kidding!

Mother Jones looks at Ocwen March 9, 2010

Journalist Andy Kroll, as part of a package of stories on how big banks have corrupted the American capitalist system, does a good job of updating the misdeeds of the mortgage servicing industry.

Take a look at this Mother Jones article.

Kroll tells how a Stockton, Calif. woman has been struggling against the fraudulent assessments made on her loan by Ocwen Loan Servicing, and goes on to summarize that the Federal Trade Commission has only settled three major cases since 2003.

That would be ALL they cases the FTC settled, since the agency never bothered to look at mortgage servicers prior to 2003.

“The (FTC), Office of the Comptroller of the Currency, and Office of Thrift Supervision also have limited oversight over the mortgage industry,” Kroll states in Mother Jones. “An OTS spokesman could name only one formal action the agency has taken against a servicer—Ocwen, in 2004. An OCC spokesman said his agency has never taken action against servicers.”

The FTC settlements totaled $70 million. But that did not keep servicers in check.

“EMC Mortgage, a JP Morgan Chase subsidiary, settled with the FTC in 2008 for misleading and ripping off borrowers. That settlement, however, didn’t help consumers like Tammy Cothran, who says EMC foreclosed on her house outside Pensacola, Florida, even though she wasn’t in default.”

There is also a link from Kroll’s article to another web page that gives advice on fighting bad mortgage services. A number of the comments to both articles are worth a look.

Fined! Mortgage service pays up for its mortgage fraud January 26, 2010

Fifteen months after I started digging into mortgage service abuse and fraud, I filed my last article. The Federal Trade Commission announced its settlement with Fairbanks Capital Corp. It seemed a fitting place to close the book.

There was more to the story. But keeping abreast of other mortgage abuse situations couldn’t compete with taking on home builders – so many of whom were hastily slapping up subdivisions, often on questionably prepared ground, with inappropriate foundations, and unskilled laborers, and then flipping loans and handing customers worthless warranties to avoid the inevitable liabilities.

I moved on.

The FTC settlement announcement ran Nov. 13, 2003. The headline:

FTC says mortgage servicer to settle

The Federal Trade Commission announced Wednesday a settlement with Fairbanks Capital Corp., a major mortgage loan-servicing company that does extensive work in Texas.

Under the settlement, Fairbanks will pay $40 million to customers who suffered from improper charges on their accounts and in many cases were wrongly forced into foreclosure proceedings.

Utah-based Fairbanks’ former CEO, Thomas Basmajian, also agreed to pay $400,000 in redress. The FTC consent order noted that Fairbanks did not admit any wrongdoing but waived its right to challenge the FTC’s findings.

Texas ranks sixth among the states in the percentage of the nearly 500,000 loans being serviced by Fairbanks. Several San Antonio residents complained in 2002 that Fairbanks fraudulently charged late fees on house payments, charged for costly homeowner’s insurance when valid policies were already in place, forced clients into higher monthly payment  plans based on fake accounting and other systematic improprieties.

Sen. Paul Sarbanes, D-Md., said the settlement sends a message to mortgage servicing companies: “They better change their practices now, at once.”

“These are servicers of sub-prime mortgages that engage in a set of bad practices designed to push lenders into delinquency and default,” Sarbanes said. “Fairbanks was one of the worst.”

Armando Simon, a psychologist living in Live Oak, was put on notice three times that his house was being put into foreclosure proceedings.

Simon is concerned that the amount of money provided for in the settlement may not be enough to make right the clients who were wronged. He was forced into bankruptcy court, yet Fairbanks’ most recent offer was only to erase the $14,253 debt the company claimed he owed.

“There is nothing there for attorney fees, nothing for pain and suffering,” Simon said. “My wife went through a nervous breakdown. I’ve had to do more counseling with one person than I’ve had to do with anybody. She woke up in the middle of the night dreaming she was living under a bridge.”

Fairbanks was to have appeared in court Dec. 1, he said, but it requested an extension because the company can find no record that it foreclosed on Simon’s house, even though their collections department made three attempts to foreclose.

At Wednesday’s news conference, FTC Chairman Timothy Muris said the settlement, which took place in a Massachusetts federal court, would be coordinated with a related class-action lawsuit. The Boston law firm Grant & Rotti several class-action lawsuits moving forward in several states.

PMI Group Inc., Fairbanks’ majority shareholder, recently announced it is setting aside $55 million to settle claims, which would be the yet-to-be-announced private class-action settlement at about $15 million. PMI Group fired Basmajian and several other top executives at Fairbanks in the spring.

Muris said the order lays out procedures by which Fairbanks will repair the credit of clients wrongfully reported in default and will institute reforms to prevent such activities.

“It is particularly important that the commission stop unfair or deceptive practices in this industry,” Muris said, “because consumers have no choice about who services their home loans – and it can be extremely difficult for subprime borrowers to avoid an abusive servicer by refinancing or paying off their loans.”

The Web levels field in mortgage fraud & other consumer issues January 24, 2010

By the summer of 2003, the grassroots movement to bring Fairbanks Capital Corp. to heel for its misdeeds was impressively apparent to anyone following this story.

It never became a national story, though, despite the fact that it was affecting people from coast-to-coast and drawing in local print and television media in many major markets.

In the sense that it never reached the kind of critical mass that would put it on national television networks for a sustained period of time, the story did not get the attention I thought it merited. But mortgage servicing fraud had been exposed and some measure of justice was meted out.

And I learned some valuable lessons about citizen journalism.

While I was an experienced reporter, I was no longer one of the rock stars of the newsroom. I had my day in the sun. During the early to mid- 1990s, I was in a position to generate a substantial body of work, and I made Page 1A at the San Antonio Express-News regularly.

But by the start of the decade, I had migrated to lower profile beats. I was interested in immersing myself in business and private sector issues. The stories were not as sexy as street crime or government scandal, but I was happy.

However, I was no longer in a position to participate in special projects – no more crusading public journalism campaigns for me. Had I gone to my editors insisting this mortgage servicing fraud scandal was worthy of a long-form Sunday Page 1A feature, or even a more compacted series that management would tout in local TV commercials, I would have gotten nowhere.

Where I wanted to go with this, I would with very little corporate support. The newspaper would let me publish. Beyond that, only my editor, Vicki Vaughan, showed any enthusiasm. What ran in print stayed on the Business page, and the local impact was but a ripple.

Yet, I had an impact far beyond San Antonio. How did that happen?

The Internet happened. It allowed me to collaborate in a very deliberate way with the leaders of a movement. These were the victims of Fairbanks, and the victims of other mortgage servicers. These were the lawyers dedicated to consumer advocacy.

There were Web sites set up by private individuals, mostly notably Craig Kenney in Maryland and his conti-fairbanks.com. I had a cadre of victims and lawyers in need of someone on the media side who would be willing to take the time to learn this issue. They were willing to share their stories and their hard evidence, and eager to share court documents.

I ran with it. And they then went to their local media – so many of my contacts were outside of Texas – and pointed to my work and said, ‘See! See! It can be done. And here’s how.’

It was sheer coincidence that Hearst Corp. pioneered the critical exposés on this issue. I just happened to work for the San Antonio Express-News, and Craig Kenney just happened to live in Maryland, thus, putting him in position to influence a Hearst-owned TV station in Baltimore.

On June 6, 2003, the Express-News published a story that I crafted with the intent that it be a kind of debriefing on this back story.

Funny thing, the story only ran on the Express-News website. It was not published in the paper. And shortly after I complained about this, the story was pulled from the website.

What I discovered was there were censorship issues. There were a few words, ‘sucks’ in particular, that were necessary to the story. This being the ‘family newspaper of record,’ I couldn’t get around the censorship.

I noticed later – but I was never sure it had anything to do with this story – that was resistance within our new organization about encouraging other websites to link or copy-and-paste our stories into their Internet pages.

It bothers me still that some newspapers resent it when grassroots movements appropriate stories that circulate information vital to the public interest. I know it happens; I have seen management complain directly to the staff of other websites, and insist they yank stories that I’ve written.

Yet, news organizations tolerate it when aggregators like Yahoo and Google appropriate the same  information for the sake of pure profit.

Despite this story’s quick disappearance from the Express-News Web site, I kept a printout, and it is now the only hard copy in existence.  The story headline read:

Consumer complaint sites growing in popularity, effectiveness

By Adolfo Pesquera

There are scores of consumer complaint Web sites where cyber gripers, as they are known, can let others know about their bad experiences.

Each site’s success in changing a company’s practices depends on how the Web site manager organizes the information and how he responds to the company being criticized.

Craig Kenney – a Maryland businessman who went after Fairbanks Capital Corp., a major mortgage loan servicing company – managed to evict the top management of his nemesis in less than three years.

Fairbanks, under pressure from its majority shareholder, PMI Group Inc., brought in its own people in May as part of its response to investigations by Fannie Mae, the Federal Trade Commission and the Department of Housing and Urban Development.

Fairbanks was accused of fraudulently charging late fees, insurance fees and other costs, and of wrongfully foreclosing on thousands of mortgages. When PMI cleaned house in May, about a third of the roughly 600,000 loans Fairbanks serviced were at some stage of foreclosure. In a settlement with Kenney, PMI agreed to let him author a borrower’s statement of rights.

“It’s going to say what we want it to say,” Kenney said. “The other mortgage servicers are watching this very closely.”

Kenney shut down his Web site – conti-fairbanks.com, which grew to 9,000 pages – and replaced it with borrowerhelp.com, which he intends to use to help reform the mortgage service industry.

The mortgage industry has fielded several angry Web sites, like homesidecomplaint.com, countrywidehomeloansucks.com and wamu-sucks.com.

Kenney believed his site was effective because it focused on one company. The site listed dozens of lawsuits that could be downloaded, and it documented customer complaints from all over the country. It offered discussion forums and links to news stories about Fairbanks.

“I’m not sure anyone really welcomes media scrutiny, particularly when there are real problems that need to be addressed,” said James Ozanne, Fairbanks’ new CEO. “Nevertheless, I must say that some of the coverage has helped us to identify and help borrowers with legitimate grievances and to understand the breadth and depth of the problems the company faced.”

Fairbanks established a customer assurance review department, and borrowers with unresolved issues can email the company at question@fairbankscapital.com.

KBHomesucks.com, a site set up by Fort Worth resident Brian Saltsberg, is in its infancy. Saltsberg created the site out of anger over the entire buying process he went through with KB Home, a major home builder based in Los Angeles that also happens to be San Antonio’s largest builder with 31 percent of the market.

Saltsberg was dissatisfied with his house’s lumber and suffered a major water leak – which took months to repair – the first night in his house. He finally stopped payments on the house and recently cut off negotiations with KB Home.

“The way I look at it,” Saltsberg said, “if I keep 10 people from buying a KB Home, at $150,000 average price per house, that’s $1.5 million in sales they lose.”

KB Home did not seem bothered by Saltsberg’s site.

“All successful companies face this challenge, and these sites are what we embrace for the privilege of enjoying free speech in our country,” a KB Home representative said.

Even more general Web sites can be effective, according to their owners. Ed Magedson claims to get 7 million hits a month on his ripoffreport.com, perhaps the best-known complaint site.

Magedson frequently works with law enforcement agencies to expose scams. Under certain conditions, he’ll negotiate settlements for disgruntled clients.

“Once there’s a rip-off report, they linger there forever,” Magedson said. “I’m told by different producers from almost every TV network that they use the Web site constantly.”

Consumeraffairs.com, a Virginia-based site owned by journalist James R. Hood, cooperates with lawyers who use the database to mine information for class-action lawsuits.

“We have about 54,000 complaints in the database now,” Hood said.

In operation since 1998, Hood made the decision Monday to launch a second site, consumeraffairs.org, in order to lobby government agencies.

“I think these sites do some good,” Hood said. “But some days I go home and say, ‘Geez. I don’t think I can do this anymore. It’s like a crime beat. What some of these companies do is so heartless and really goddamn cruel.’ “

—————

A footnote:  The KB Home spokesman that was being so magnanimous about Seltsberg’s site and his free speech was blowing smoke. Shortly after this story ran, KB Home started putting gag clauses in their contracts. They tried to get home buyers to agree in writing at the time of closing that they would not complain in public or on the Internet about any disagreement. All issues relating to disagreements with KB Home, its practices and products could only being discussed in binding arbitration, behind closed doors and in secret – all records being sealed forever.

Fitch downgrades Fairbanks January 20, 2010

The week following the Moody’s Investor Service downgrade, Fitch Ratings became the last of the three major ratings services to downgrade Fairbanks Capital Corp.

We ran this story May 14, 2003:

Loan servicer downgraded — Fairbanks suffers from management changes, complaints

By Adolfo Pesquera

Fitch Ratings on Tuesday downgraded Fairbanks Capital Corp., a leading servicer of subprime loans, due to uncertainty about its financial strength and management stability.

The move follows the removal Friday of Fairbanks’ founder Tom Basmajian as chairman and CEO. PMI Group Inc., a 57 percent shareholder, nominated people to the board in an attempt to turn around the troubled company.

Fitch was the last of the major ratings agencies to downgrade Fairbanks. “Fitch is concerned about the continued loyalty of senior management, in light of recent executive management changes,” the company said in a statement.

The San Antonio Express-News reported last August that some of Fairbanks’ Bexar County customers were being wrongfully forced into foreclosure proceedings or delinquent account workout agreements.

Following a wave of consumer complaints, the Federal Trade Commission began a review of the company last October and the HUD Inspector General joined the investigation in March.

Fairbanks had no immediate comment on the Fitch downgrade, but has previously stated it anticipates the federal investigations will not turn up any wrongdoing.

Fitch plans on-site reviews next week to Fairbanks’ servicing facilities in Texas, Utah, Florida and Pennsylvania. It will use the reviews to assess Fairbanks’ servicing practices and evaluate the impact of the new management team.

Loan servicer Fairbanks Capital gets downgrade January 20, 2010

By May of 2003, federal investigations into Fairbanks Capital Corp. were getting the attention of the ratings agencies that monitor financial institutions.

And Fairbanks’ victims, the many homeowners that were losing their life savings as a result of the company’s bad acts, turned out to make great television. One Hearst-owned television station in Baltimore was crusading against Fairbanks in particular, and this drew the attention of U.S. Sen. Barbara Mikulski, who on March 6, 2003 demanded that HUD investigate Fairbanks.

The FTC had already acknowledged that in October of the previous year it began its own investigation into Fairbanks abuses of federal laws.

On May 8, 2003, a wire story came across about Moody’s Investor Service downgrading Fairbanks. This was a direct reaction to news of the same week – and the Express-News ran a wire service photo of Sen. Paul Sarbanes, Dem.-Md., with the story I had in the May 9th edition – that Sen. Sarbanes had been asked by a non-profit agency in Baltimore for an investigation of Fairbanks. Sarbanes helped found the Baltimore City Flipping and Predatory Lending Task Force.

The article was simply titled:

Loan servicer gets a downgrade

By Adolfo Pesquera

Fairbanks Capital Corp., a major mortgage loan servicer, was downgraded this week by Moody’s Investor Service because of concerns that revenue will be affected by its efforts to comply with federal regulations.

In March, Fairbanks became the target of a  criminal investigation by the Department of Housing and Urban Development’s office of inspector general.

Tuesday’s action by Moody’s dropping Fairbanks’ rating from “strong” to “below average,” was the latest in a series of adversities preceded by a flood of complaints from homeowners who alleged they were wrongfully assessed thousands of dollars in fees and penalties.

In many cases, consumers said they lost their homes or were brought to the brink of foreclosure because of Fairbanks errors.

Standard and Poor’s lowered Fairbanks rating from strong to below average last week.

The S&P move cause PMI Group Inc., which owns 57 percent of Fairbanks shares, to withdraw its earnings guidance for 2003.

Fairbanks became the subject of a series of San Antonio Express-News articles last August after Bexar County residents came forward with complaints that the company initiated foreclosure proceedings based on erroneous non-payment information.

The Express-News investigation found that the company engaged in numerous questionable activities, including late fee penalties on payments that were made on time, and force-placing higher cost property insurance on residents who already had current policies.

Fairbanks even penalized one resident for allegedly not keeping current with property taxes, even though the client had a valid contractual payment agreement with the tax assessor.

The Federal Trade Commission in October publicly expressed its intention to the servicing segment of the non-prime industry.

In company statements, Fairbanks said it was “disappointed by and disagrees with the extent of S&P’s rating change.”

Fairbanks President Bill Garland further stated that the company would fully cooperate with the HUD and FTC investigations.

Fairbanks acknowledges that there have been numerous lawsuits and news reports regarding consumers citing predatory and deceptive business practices. The company alleges that in many instances, the complaints contain inaccurate or misleading information.

“We have reviewed these complaints and look forward to presenting the facts in response to the HUD and FTC reviews,” a company statement said.

Garland said Fairbanks has initiated a review of all loans currently in foreclosure or subject to referral to foreclosure.

“As a leading servicer in the non-prime market, Fairbanks takes its responsibilities very seriously,” he said.

The Salt Lake City-based Fairbanks specializes in servicing subprime loans. Roughly a third of its 600,000 loan portfolio is more than two payments behind, Garland said.

However, hundreds of clients nationwide have alleged in numerous class action lawsuits that the “late payment” record keeping is often in error.

In a nationwide class action lawsuit filed April 17 in California, attorneys allege that Fairbanks’ error-prone ways are actually “a scheme of unfair, unlawful and deceptive business practices” used to wrongfully enrich Fairbanks and PMI.

Until seven weeks ago, Fairbanks was successfully claiming in courts that its mistakes were irrelevant, thus excluding all accounts not actually in default. But the U.S. Seventh Court of Appeals ruled March 20 that mortgage servicers could not avoid federal laws regulating debt collectors because of bookkeeping errors.

By Fairbanks’ logic, wrote Circuit Justice Anne Claire Williams, only debtors that were correctly put into default status could use federal protections aimed at correcting mistakes.

“This broadens the reach, no question,” said Richard Sommer, a San Antonio real estate attorney and consumer advocate. “If a servicer asserts that a debt is in default, then they become subject to this act. You can’t say, ‘Well, we made a mistake thinking it was in default when it wasn’t.’ “

The opinion of the court in Chicago arrived by coincidence in the midst of a media blitz in Baltimore, where Hearst Corp.-owned WBAL-TV was airing complaints of Maryland residents with Fairbanks-controlled accounts.

The Hearst Corp. also owns the San Antonio Express-News.

Baltimore’s Community Law Center, a nonprofit agency that deals with predatory lending, responded by becoming a clearinghouse for hundreds of distressed homeowners.

Diane Cipollone, the law center’s research and policy director, asked U.S. Sens. Barbara Mikulski and Paul Sarbanes, both founders of the Baltimore City Flipping and Predator Lending Task Force, to seek an investigation.

Mikulski asked HUD Inspector General Kenneth Donohue for a review. A nationwide HUD Hotline was opened; complaints can be made via email at hotline@hudoig.gov or at (800) 347-3735.

“What they are doing to these people is despicable, and it is absolutely wrong,” Mikulski said. “And I want to urge the investigations to go forth to see if Fairbanks has done criminal acts, if they have possibly broken regulatory acts. And if that’s so, I want them decertified, and I want them prosecuted, and I want redress for the victims.”

Cipollone said her agency is too preoccupied with saving homes from foreclosure to initiate a national dialogue now, but hopes in time to pressure lenders to avoid using servicers that engage in predatory practices.

“I hope there will be some national discussion on what needs to be done so this doesn’t happen again,” Cipollone said.

It took a national dialogue to respond to predatory lending practices, Cipollone said. But while laws addressed the wording, preparation and closing procedures for loans, the back office functions involved in servicing those loans fell through the cracks.

Mortgage loan servicers: bunglers or evildoers? January 20, 2010

Robert Doggett, Texas Rio Grande Legal Aid attorney

By Jan. 5 of 2003, when I got a Sunday feature published on mortgage loan servicing abuses, what was going on at Fairbanks Capital Corp. was gaining traction across the country.

As more lawsuits were filed and more discussion generated on the issue of their supposed epidemic of errors, Fairbanks executives continued to insist they had no motive for forcing homeowners en masse into foreclosure.

Indeed, the industry position was that it was more expensive to go through foreclosure and not in the interest of the investors to whom the mortgage servicers answered.

But there was a counter argument. Was it not possible, even likely, that some mortgage servicers would be less interested in the investors they obtained mortgage portfolios from, or the homeowners they were supposedly billing for handling billing on principle and escrow accounts?

It appeared there were mortgage services that acted like predatory banks, piling on fee after fee to suck all the equity out of the properties they held, and extorting under threat of foreclosure money for which the mortgage servicer was never entitled.

Some of the cases I reviewed showed a clear pattern of a company that was constantly fabricated numbers, piling up obscure fees and producing statements that were undecipherable. All they while, Fairbanks and some other companies with similar practices were frightening homeowners into outrageously costly forbearance agreements, concocting defaults to pressure people into forking over huge sums.

This was more common among mortgage servicers that specialized in subprime loans, those loans that functioned like the iceberg that sunk America’s economic “Titanic.”

The attitude of these mortgage loan servicing companies, I have long been convinced, was this:  ‘We will extort, steal and take everything we can get from them. And if anybody asks, we will say these homeowners are financial illiterates. They don’t know  how to manage their money. Why do you think they had to settle for a subprime loan in the first place? They are idiots and we are financial experts. Who are you going to believe? These idiots, or us?”

The mortgage servicers culled the healthy as well as the weak from the herd of millions of mortgage loans. What were a few hundred thousand extortionist thefts through shady mortgage loan service practices when there were millions of loans out there? Who would notice?

How egregious was this behavior? It was so  bad that a consumer advocate attorney in West Virginia convinced the state supreme court to declare a moratorium. In that state, Fairbanks was barred from foreclosing on any mortgage they serviced for residents of West Virginia.

The story that ran at the start of 2003 attempted to address some of these issues. Unfortunately, it is tricky to accuse companies and their employees of intentional criminal activity without a high level of proof. So, I was often confined to describing them as complete idiots who should have known better.

The article was titled:

Mangled mortgages – when the American dream turns nightmare

By Adolfo Pesquera

For most American homeowners, mailing a monthly mortgage payment is a routine experience. But for the thousands struggling with poor service from blundering mortgage service companies, the experience became horrific.

Robert Doggett, a Texas Rural Legal Aid attorney (Mr. Doggett is still with the firm, but the name has changed to Texas Rio Grande Legal Aid), has 12 years experience protecting homeowners from bad mortgage companies.

“The laws are not helpful or clear, so (mortgagees) push the limits, they rob equity,” Doggett said. “They’re all doing these tactics and their attitude is, ‘We’ll see who goes to jail.’ “

When a homeowner gets stuck with an inept mortgage company, the warning signs often show up early. Billing is done through a mortgage servicer, which may be a subsidiary of the lender, or a separate company contracted to manage the account.

Mortgage companies often take over huge portfolios involving thousands of loans from other companies. The first 60 days after a loan transfer is critical, and most homeowners find this is where their problems start.

That’s what Gloria Cortez, a San Antonio insurance agent learned. Her mortgage company acquired her account in January of 2002 and her first correspondence was a February letter notifying her that her account was in default.

Cortez knew her account was current, but she didn’t know the new mortgage company already had violated federal law. The homeowner’s first letter from the mortgage company should be a notice of which company now holds the account, and that no late fees or other penalties can be charged during the first 60 days.

A spokesman for Cortez’s mortgage company claimed her account was in default from its first day. But Cortez’s previous mortgage company claimed it transferred the account in good standing.

The new mortgage company, Fairbanks Capital Corp., forced Cortez into what is called a “workout agreement,” which meant she had to pay $230 extra each month to catch up on several alleged missing payments.

She also was forced to send extra money to an escrow account to pay her taxes. Cortez protested, submitting written proof that she had a payment plan with the county tax assessor. Her mortgage company repeatedly ignored her protests and even claimed to have paid her taxes, yet the assessor had no record of payment from the mortgage company.

When mortgage companies neglect or mishandle accounts, the homeowner pays the consequences.

Louis Tejeda, 66, received tax delinquency notices last spring because his mortgage company had not paid the taxes. He made more than a dozen phone calls to his mortgage servicer.

“The money was there,” Tejeda said, “and they weren’t paying.”

Tejeda tried to pay the taxes himself, but the mortgage servicer stalled him and ultimately paid his taxes. However, they also had to pay late penalty fees and reassess his escrow account for 2003. His monthly payments jumped from $546 to $901.

Another San Antonian, Elizabeth Brown, an elderly East Side resident, was being charged for an insurance policy that was being pushed by her mortgage servicer. That’s called force-place insurance, and it is an accepted practice when the homeowner does not keep the policy current.

But Brown’s mortgage company was back-dating the effective start date to a period of months prior to its purchase.

Back-dating policies is fraud, according to the insurance industry lobby Southwestern Insurance Information Service.

Sandra Power, Brown’s insurance broker, said she occasionally encounters mortgage companies that commit another kind of force-place insurance abuse.

“When it comes time to bill escrow for insurance renewal, sometimes we’re billing one company and it’s been transferred to another,” Power said. “And we don’t know it.”

After one of Power’s clients notified her late of a transfer, she tried for several months to prove he had bought insurance through her. Although obligated by law, the mortgagee refused to cancel its more expensive minimum coverage policy.

Another common abuse has to do with late payment fees. Some companies seem to habitually assess late fees regardless of when they receive payment.

Because of that, Cortez, the San Antonio insurance agent who was told her mortgage was allegedly in default, pays $11.95 extra each month to send her payments via Western Union on the due date.

Despite her promptness, Cortez has repeatedly been charged a late fee.

James McMillen, a Corpus Christi consumer protection lawyer, said mortgage companies also throw irregular payments into something called a suspense account.

It starts when a homeowner pays more than what is due to accelerate payoff on the principal, but does not specify how the extra money should be applied.

“They throw that into a suspense account until they can figure out what to do with it,” McMillen said. “It doesn’t get counted as the monthly payment and several late charges may accumulate. Instead of applying it to the principal, they apply it to the late charges or escrow.”

Every month, for days at a time, Patrick Gill said his answering machine is filled with messages from his mortgage company, even though he pays on time. Gill and his wife have good jobs and do well enough to send their two daughters to Catholic school. But their experience as first-time home buyers has not been pleasant.

Although Gill sends his payment on the first of the month – it is not due until the 15th – he begins to get calls as early as the 16th asking him why he has not paid.

“It takes them 15 days to post the payment, sometimes they don’t get it at all and we have to stop payment on the check,” he said.

“The last thing I’m going to do is lose my home,” Gill said. “We’re just praying somebody will buy (that company) out.”

A buyout might solve the Gill’s problems, but once a mortgage company fouls up an account, any successor company usually inherits the errors, experts say.

Still, the lousy record-keeping can help those acting on behalf of a homeowner.

“I haven’t lost that many houses,” Doggett said. “Even after the foreclosure, I still sue.’

Mortgage servicers, Doggett said, often cannot locate paperwork.

“It’s hysterical to watch them try to find their own documents because they churn so many loans.”

That is not to say that winning cases he easy, he added. Many homeowners are frustrated by mortgage company clerks who do not know what is going on and have no authority.

The clerks give folks the run-around, Doggett said. “It can be a giant nightmare. It’s not that much easier even if you know what you’re doing. I look forward to getting ahold of the lawyers on the other side; you can rely more on what they say. Unfortunately, when it gets to a lawyer’s stage, it’s not good.”

Homeowners may be hit with still other charges, including something known as a “property preservation” fee that is allegedly levied to pay someone to drive by a house to see  that it is still standing.

Such charges often are not discovered until a house is sold. Experts stress that a homeowner needs to get a copy of the payoff statement from his title company to look for discrepancies and extra fees.

Sometimes, just getting the payoff statement can be difficult. Some local real estate brokers suspect that some mortgage companies delay in producing the payoff statement so the owner will have little or no time to dispute extra charges.

When Yolanda Medina sold a North Side rental property, her company stalled a week before faxing the payoff statement. There was a $1,226 charge referred to as “funds advance on borrower’s behalf, and an interest charge for this “loan” that she did not know about.

Five months after the sale, the company continues to ignore her requests for an explanation and refund. (As of this writing – January 2010 – Medina had long ago given up; she was never able to get the $1,226  refunded.)

Ben Bennett, a San Antonio real estate investor, specializes in distressed properties. He examines the foreclosure postings and makes offers to homeowners who are about to lose their homes, but only in situations where he sees enough equity to turn a profit.

Bennett said mortgage companies, put simply, are never to be trusted.

“I deal with mortgage companies on a regular basis, and there is nothing too stupid for them. Some of the stuff they do is just beyond belief,” Bennett said.

On one occasion, Bennett foreclosed from a second lien position on a property in his portfolio to help his daughter and son-in-law get a house. It took more than nine months of negotiations and a lawyer’s help to get the loan in their name.

“Afterward,” Bennett said, the mortgage company “destroyed their credit by reporting the foreclosure against them.”

Recognition for reports on mortgage servicing January 20, 2010

Adolfo Pesquera

Following my fourth installment on mortgage servicing problems, I was informed by James McMillen, a consumer advocate attorney in Corpus Christi who had been helping me with the series, that he had nominated me for a media award for my reporting.

Soon after, I was contacted by the National Association of Consumer Advocates, one of the nation’s most respected consumer protection organizations, and told I was to be awarded the media award of the year for local/regional reporting on consumer issues.

The problem of mortgage servicing fraud at Fairbanks Capital Corp. had affected many attorneys who were NACA members. It was a particularly difficult issue for them to get out in front of the public. The topic was difficult to understand and to explain, and it was a nationwide problem.

No other journalist had tackled the issue, before I came along.

The problem of Fairbanks Capital and of mortgage servicing abuses in general had not been resolved, but attorneys and their clients could see that I had gotten the ball rolling in the realm of news media.

I had to good fortune to tap into a grassroots movement started by victims of mortgage servicers. They had Web sites that linked or copied and pasted in full the articles I had written. The articles documented in great detail the errors – some  said deliberate tactics – committed by Fairbanks and others.

This in turn inspired other reporters around the country to look for cases in their back yard. I had provided a blueprint on how to get the facts out.

I was asked to appear at the 2002 Fall convention of the NACA in Atlanta. But I was given such short notice of my award that I could not attend.

I did not receive the award in person until the following year, when I attended the NACA’s 2003 convention in Oakland, Calif.

Meanwhile, there was still work to do.

Mortgage servicing errors at other companies January 20, 2010

As I progressed in my investigation into mortgage servicing fraud and incompetence, I learned that Fairbanks Capital Corp. (aka Select Portfolio Servicing Inc.) was hardly alone when it came to bad practices.

Many mortgage servicing firms were doing at least some of the things that Fairbanks did. Ripoff Report became a good source for leads on Fairbanks and other companies. They still are.

Included in my third installment on mortgage servicing problems, the Express-News ran a blurb at my request, asking readers who had problems with their mortgage servicing to contact us.

That is how I got in touch with Kenwood Drayton and Gary McKenzie. We ran their story Sept. 13, 2002:

Trouble with titles

By Adolfo Pesquera

Paying off the debt on a house is usually a moment of celebration, but two Bexar County residents had to wait – eight months and thirteen months, respectively – to get their mortgages cleared when the mortgage banks lost track of their paperwork.

Only after months of phone calls and inquiries did Kenwood Drayton and Gary McKenzie finally receive their documents this week.

They say they never should have had to go through the experience in the first place.

Drayton, a real estate broker, had plenty of experience transferring title on properties. But when it came to getting title on his house – a double-wide trailer near St. Hedwig – negotiations with Chase Manhattan were going nowhere.

“I thought I was very good at my job up until now,” a frustrated Drayton said.

His wife, Gisela Drayton, said they paid the loan in full Aug. 13, 2001. Despite that, they had no correspondence from the bank showing the loan was paid. Phone calls produced excuses about lost paperwork but no title.

The Draytons contacted U.S. Rep. Ciro Rodriguez, whose staff aide made unsuccessful inquiries.

Gary McKenzie, retired from the Air Force, likewise found himself stymied by a customer service process at Washington Mutual. Phone calls never were returned and he said customer service representatives frequently concocted false explanations about the release of lien on a property he paid in full Jan. 28.

“I’m pulling my hair out McKenzie said.

He was told on two occasions the release of lien was sent to the Texas State Trust. No such agency exists.

McKenzie repeatedly was told the release of lien was sent to the Bexar County Clerk for recording, and the clerk’s office can take up to three months to process it. McKenzie checked with the clerk’s office and found the paperwork wasn’t there, and that there is never a delay of more than eight working days.

County Clerk Gerry Rickhoff said such complaints are infrequent, but some mortgage company employees will say anything to get the customer off the phone.

“I’ve heard stories referred to where the claim is that the problem is here, when in fact research has proven it’s at the very feet of the person making those allegations,” Rickhoff said.

McKenzie’s property was a rental house being managed by Kevin Knight, owner of Liberty Management Inc. Knight tried helping McKenzie, but he has other problems with mortgage companies.

One failed to pay taxes from an escrow account on a property he owns. Another company reported one of his properties in foreclosure – hurting his credit rating – because a previous owner was heading toward foreclosure.

Still another tried to foreclose on a client’s property that was current on payment. Knight had to send copies of cancelled checks three times before it was resolved.

Yet another property that was current on payments was affected when a mortgage company agent, Knight said, “banged on the door and told a tenant they were going to foreclose.”

“We had to reassure the  tenant. If they would have bailed out, that would have been a hardship for the owner.”

Knight said it has been his experience not to expect returned phone calls when  dealing with mortgage companies.

However, following inquiries by the Express-News, McKenzie and the Draytons did get their phones ringing.

“This was the first time Washington Mutual has called me back,” Drayton said Monday.

By Wednesday, McKenzie did get detailed instructions on where to get the lien release documentation.

Washington Mutual is the nation’s largest mortgage originator, spokesman Joe Arbona said. And errors are a result of rapid growth through acquisitions made in the past year.

“In the past few months, we’ve been stepping up in a very proactive way, adding staff in trying to resolve these situations faster,” Arbona said.

Chase Manhattan, through JP Morgan Chase, sent the Drayton’s title by FedEx. It arrived Thursday morning, Gisela Drayton said.

“It was an unfortunate processing error,” said Charlotte Gilbert-Biro, a JP Morgan Chase vice president.

“One of our lien functions was transferred from one site to another. This file was sent to the new site along with ‘completed’ files, rather than with files that required additional processing,” she said.

“Certainly, this is a unique situation and not representative of our standard processor procedures,” Gilbert-Biro said.

“And we regret any inconvenience to our customers.”

Fairbanks Capital accused of poor record keeping January 19, 2010

The following article is a newly edited version of an article that ran in the San Antonio Express-News on Aug. 30, 2002.

Charging homeowners for property taxes never paid

By Adolfo Pesquera

San Antonio clients of a Utah-based mortgage loan-servicing company complain they’re stuck in a paperwork nightmare with the firm, causing them hours of frustrating phone calls and letter-writing.

Homeowner Gloria Cortez has been trying for six months to resolve a dispute with the company, Fairbanks Capital Corp., over a loan to pay delinquent taxes.

(Fairbanks changed its name to Select Portfolio Servicing Inc. in 2003, following investigations by the Federal Trade Commission and the U.S. Department of Housing and Urban Development)

A second resident, Yolanda Medina, has asked Fairbanks to reimburse her for funds that her records show she should not have been charged for a house she has since sold. Medina sold the house, which she relied on for a second income, because she found it too difficult to deal the mortgage servicer.

“I was spending so much time on the phone with them I was getting behind in my work,” Medina said. “I didn’t need the stress. I pity people who are stuck with them and can’t get away.”

Fairbanks is the target of several class action lawsuits filed in other states, where attorneys defending homeowners allege the mortgage servicer improperly charges clients’ accounts. An Illinois lawsuit alleges Fairbanks repeatedly imposes unauthorized late fees and charges for wire transfers.

Cortez’s troubles with Fairbanks began less than five months after the company acquired her loan. Fairbanks put her account under a forbearance agreement, a temporary payment plan that prorates missing mortgage payments, late fees and other charges and adds them to the borrower’s regular monthly payment.

Fairbanks said it initiated the forbearance agreement in May because Cortez was delinquent on her taxes and hadn’t made her last two monthly payments to her previous mortgage servicer.

But Cortez said she has a valid installment payment contract with the tax assessor, and sent Fairbanks copies of cancelled checks showing the supposedly missing payments.

Fairbanks President Bill Garland said he’s puzzled by Cortez’s claims. He said the issue of the two missing payments was resolved and his company told Cortez that in March.

“We consider this one of our success stories,” Garland said. “We worked with her. We reached an amicable solution.”

But letters dated March 6 and May 1 from Fairbanks to Cortez each ask for 60 working days to resolve the dispute. On July 17, Fairbanks wrote Cortez that “we have been successful trying to retrieve information from your previous lender.”

Cortez strongly disagrees with Garland’s characterization of discussions as amicable, and said the dispute has hurt her finances.

“Me and my husband worked so hard to repair our credit,” she said.

After the Express-News reported the dispute in its Aug. 9 editions, Fairbanks sent Cortez a letter dates Aug. 12 saying it had found the two missing mortgage payments. As for Cortez’s taxes, Garland initially said her installment contract wasn’t a problem.

“I think the resolution is we advanced the taxes,” Garland said. “I paid them on April 17.”

However, county records show the only payments received have been from Cortez’s checking account, and almost $2,800 is still owed.

Fairbanks also sent Cortez a letter dated Aug. 9 informing her that she was delinquent on her taxes and asking for proof of payment. Cortez forwarded Fairbanks a copy of her contract with the tax assessor-collector.

Other homeowners have questioned Fairbanks record keeping.

Medina sold a rental property on Casa Grande Street in part because she gave up efforts to get Fairbanks to provide correct statements on her loan.

Fairbanks got control of her loan in January 2002. A statement she received last week shows it immediately started charging her late fees and never credited her for her January payment.

It appeared to Medina that from the start Fairbanks could not or would not correct records.

Indeed, from the start, Fairbanks was violating industry regulations. By law, no mortgage servicer can charge a late fee during the first 60 days of its acquisition of an account.

Fairbanks also sent late notices for payments that had been made on time, Medina said. A letter dated April 23 indicated that the company wasn’t crediting the principal and interest according to the forbearance agreement she had with her previous mortgage servicer.

“That’s when I started calling,” Medina said. “It has been very time-consuming. The calls to them are just totally – you don’t get anywhere. There’s only one number you can call and it’s customer service, which is an oxymoron.

“They tell me I have to put my request in writing,” she said. “I write. I fax it to them. Nothing happens.”

Medina paid all taxes owed on the property June 28, a week before Tax Assessor-Collector Sylvia Romo said delinquent accounts would have been sent to the tax-collections law firm.

The house sold on July 31. Fairbanks sent Medina a letter dated Aug. 6 congratulating her for paying off the loan. Three days later, Fairbanks sent a letter stating, “the taxes on your property are in delinquent status,” and demanded proof of payment.

“These letters just crossed in the mail,” Garland said. “The processing window is in the neighborhood of seven to eight days.”

But Fairbanks’ tax delinquency letter was mailed 42 days after Medina paid her taxes. If Fairbanks relied on the tax assessor-collector’s report, it should have noted the taxes were paid in June.

Romo said some companies request information monthly, some less often. Fairbanks, she said, may have relied on old information regarding Medina’s account.

Garland said Fairbanks contracts with another firm, and he didn’t know how current its data was.

“I would hope its fresher than what appears to be the case here,” he said.