Federal Regulators (OCC, Federal Reserve, OTS, & FDIC) investigate & write up an Interagency Report that states:
third-party law firms hired by the servicers were nonetheless filing mortgage foreclosure complaints or lost-note affidavits even though proper documentation existed.
The review did find that, in some cases prior to 2010, the third-party law firms hired by the servicers were nonetheless filing lost-note affidavits or mortgage foreclosure complaints in which they claimed that the mortgage note had either been lost or destroyed, even though proper documentation existed.
During the review of servicers, examiners assessed servicers’ relationships with third-party vendor Default Management Service Providers (DMSPs), focusing primarily on DMSPs that supported the execution of foreclosure-related documents, such as affidavits of indebtedness, lost-note affidavits, and assignments of mortgages
Many trusts filed exception report documents confessing to a long list of missing loan documents including promissory notes & assignments. Many examples here start on page 20 and continue on and on and on until page 250. Take note that this extensive list only includes trusts where American Home Mortgage Servicing is the servicer & Deutsche Bank is the Trustee & Document Custodian. There are countless other REMIC trusts that also have exception reports.
Florida Bankers Association inform the Florida Supreme Court that the notes were destroyed to prevent confusion. (pg 4 here)
The reason “many firms file lost note counts as a standard alternative pleading in the complaint” is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file. See State Street Bank and Trust Company v. Lord, 851 So. 2d 790 (Fla. 4th DCA 2003). Electronic storage is almost universally acknowledged as safer, more efficient and less expensive than maintaining the originals in hard copy, which bears the concomitant costs of physical indexing, archiving and maintaining security. It is a standard in the industry and becoming the benchmark of modern efficiency across the spectrum of commerce—including the court system.
So, which is it? Who is lying?