Thursday, January 03, 2008

OMFG Fire Up the Shredders

Forbes breaks this story:
American Home Mortgage Investment Corp.'s plan to destroy 490,000 hardcopy mortgage loan files has drawn fire from federal bankruptcy monitors, who say it could hurt homeowners' ability to sue the failed lender.

The company, once one of the country's largest mortgage lenders, says it can no longer afford the $45,000-per-month rental on warehouse space to preserve hard loan files.
"The only loan files that we are destroying or seeking to destroy have been fully imaged," Kalas said. "Anything related to consumer concerns or loan fraud or anything like that, the information would be available on American Home servers."

Investors who own the loans also have protested the plan to destroy the files, complaining in court papers that they have had trouble getting full documentation from American Home, and don't want to see the paper files destroyed.

"Tanta the Great" at Calculated Risk has both denouned and settled this. Several judges who have been exposed to the shady lawyer practices seeking to obviate this fundamental protection have wisely followed her lead.

Documents and provenance are de rigeur. When all that French stuff starts showing up you know it is serious.


Ogg the Caveman said...

Is this the Murst! lender to start shredding its files?

Sweet Cashback said...

First we need to go back to steam powered car engines in order to efficiently use all that burning paper!

Anonymous said...

Have the judge turn the papers over to investors, let them pay for storage. Problem solved.

Rob Dawg said...

I can only pray that my loan is in the burn pile.

Honestly I know it isn't but still...

Trust me. In the next six months we will see people having their mortgage forgiven based upon broken paperwork.

H Simpson said...

How can the spokesperson say they cannot afford half a million in storage costs with a straight face.

Ask how big a bonus the CEO took home last week and ask to take the half million from this year's tip.

The "new" business cycle:
First come the rumors.
Then come the shreddings
Third are the indictments
Forth come the torts
Finally dicks go to jail and the process starts all over again.

When will we ever learn?


Anonymous said...

Trust me. In the next six months we will see people having their mortgage forgiven based upon broken paperwork.

Of course. They are coming to the end of the ponzi. Debt forgiveness will be seen as a way to stimulate the economy. People who are responsible, save, and live within their means can't sustain the scam.

Bilgeman said...

Maybe they can donate 'em to the frigid elders that "Joe Citgo" is flacking for.

They can burn them to keep warm this winter.

s said...

h simpson, since they've been in Chapter 11 since August, one would hope the bonus was exactly $0...