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Moody's: Maybe Document Custodians are to Blame

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Thursday, ~errber 1" 2010

M:lody's In'-'Cstors SerJce Inc. has weighed in on the widespread fo reclosure-documenl problems with a report
questioning whether document custodians fo llowed industry standards in tracking and holding original
mortgages notes in their files . It also identified specific document defects that could pre'A3nt ser.icers from
foreclos ing .

While one major custodian told M:lody's that the original note is present "in almost all of their files ,' alleast one
major securitization law firm did not routine ly check Ule custod ial receipts before a securitizaton clos ing .

Yehudah Forster, a ~dys 'lice president and senior analys t, wrote that the vast majority of notes and key
documents exis t "But exady how large that \last majority' is , precisely how disorganized the fi les of custodians
and servicers are, and how practicallyfindab le the exisbng documents are , is uncertain ," Forster wrote.

MJre problematic is that securitization agreements are "ambiguous" as to wh ich party wou ld be responsible for
curing missing or defectiw documents , he said .

While s ponsors typica lly would haw to repurchase problem loans out of a pool, Forster wrote, they "may not haw
honored these requests , if an~ne made them ."

Though MJodys tried to buttress servicer claims that most defects are curab le , it adm its that there are cases in
which document defects will prewnt a servicer from being able to foreclose on a defaulted borrower.

"This may be especially true when the originator is out of business and cannot re-elEcute correctiw documents,"
Forster wrote. "A1d in cases whe re the servicer cannot or repeated ly fails to produce the co rrect documents,
courts maynotbe s~pathetic."
Max Gardner’s Rules for the Examination Of
The Electronic
Document Custodian
Posted on03 October 2010. Tags: archives, assignment of mortgage, boot camp,
custodian, data,
documents, electronic document custodian, employment, ESI, evidence,
foreclosure fraud, litigation, LOGS,
Gardner, records, recovery
Written on June 22, 2010 by admin
State your full name and current position.
Provide us with your definition of a document custodian.
What is your exact job title?
What are your responsibilities?
Where are you employed?
Where does your company store original documents?
How are they stored?
If you outsource this storage, who is the outsource provider?
How do you confirm delivery to the outsource provider?
How do you retrieve original documents?
How long do you save original documents?
Do you have a written original document destruction policy?
Please explain it and produce a copy of the policy.
Do you retain images of original of all documents?
How are they retained?
Where are they retained?
How long are they retained?
What type of computer system is used for the image retention?
Do you have a Records Compliance or Management Department?
Explain how it works, who is employed there, and where it is located.
Describe all information that you store electronically.
Do you have an ESI manager?
Who, where does he or she work, what does he or she do?
What is your policy on the retention of electronically stored documents?
Do you have a written policy for ESI documents?
Do you have any automated archiving systems?
If yes, then explain how they work and how documents are achieved.
Where are the archived documents stored?
How do you save data to a file that has already been achieved?
State the name of the director or manager of your document archiving operation.
How do you store data acquired through mergers or acquisitions?
How do you retrieve historical data from the archives?
Explain the process in detail.
Do you have an organizational-wide data map or inventory of all electronically
stored data?
Can you produce a copy of that map?
Do you have any litigation ready data files?
Where are they stored?
How are they created?
Who is in charge of creating these files?
Why are they created?
Is there such a file in this case?
Where is the data stored?
Do you have any electronic data stored on tapes?
Describe the data and the type of tapes?
Where are these tapes stored?
Do you maintain a disaster recovery location?
Where is it?
Do you store electronic data at this location?
How is it stored?
How long is it stored?
What types of servers are used to store the data at this location?
How long is the data stored?
Do you have a data destruction policy at the disaster location?
Please explain and produce all written protocols.
Explain how you retrieve data from the disaster location?
Explain the time and expenses involved in securing date from the disaster
recovery location?
State if any data related to this case has been destroyed?
Describe the data in detail and when and under what circumstances it was
Have you seen any notice in this case to preserve all of the ESI?
When, where and how did you see it?
Has any data related to this case been destroyed since you saw it?
Who is your Media Destruction Manager?
Where is this person located?
What are the responsibilities of this person?
Explain all of the steps your company has taken in this case to preserve ESI
Have you created a data file of ESI for this case?
When was it created?
Name all parties involved in the creation?
Where is that data filed now?
Explain all of the steps that were taken to create the ESI file for this case.
Are there any ESI that you could not find or include in the file?
If so, please explain.
If any of the data still exists, have you or anyone in your company investigated
the restoration of any
deleted or damaged data?
When, who did this and what did they do?
If not, then why not?
With respect to the ESI file that has been created for this case, have the
documents been scrubbed for
If yes, then when, who ordered, and why?
Who was involved in the scrubbing?
Was a scrubbed metadata file created?
Who created the file and who has custody of the file?
Do you backup your data every day?
How and where is the backup data?
Who is in charge of your backup operations?
What data is backed up?
Do you back up programs and systems or just the data?
What is the difference between your backup data system and your archived data
storage system?
How long is backup data retained?
What is the format for the media in the ESI file created for this case?
Did you ever stop backing up or archiving data in this case in anticipation of
If so, when, why, and who ordered such actions?
When was a litigation hold placed on the destruction of any of the ESI data
related to this case?
Who issued the hold and how was it implemented?
Do you have any type of dormant document liability policy?
If so, then please explain in detail how it works?
Has any of the ESI data in this case been destroyed or deleted pursuant to a
dormant document liability
If so, can you identify who took such action, when it was taken, who ordered it
taken, and why it was
Name all parties who have access to any of the data related to this case.
Explain all security features employed by your company to prohibit the
unauthorized access to any of your
ESI data?
Do you keep any type of catalogue of information on tapes or other media
related to historical ESI?
If so, please explain how this system works?
Where are the catalogues filed and how are they maintained?
State the names of all of the servers and the location of all such servers that
contained any ESI data related
to this case.
State your current policy on saving company email.
State your current archiving and backup programs with respect to email.
State all of your email format types, date ranges for retention of email, and the
names of all custodians.
Please identify all types of files used by your company, the capacity of such files,
the creation dates and
how those dates are preserved, the modification dates and how they are
recorded, and the maximum size
of each file.
Does your company employ a de-duplication policy as to ESI data?
If so, please explain how it works?
Has any data in this case been subject to destruction pursuant to any such
If so, identify all such ESI data.
Do any lawyers representing you in this case have access to any of your data
IF so, please explain the extent of such access, how it is tracked, and purpose of
the same?
Have you migrated any ESI data in this case from older, disparate media sources
into modern managed
If so, explain in detail the older data systems, how the migration occurred, and
explain the new storage
media used?
Name all of the parties on the data migration team or group.
Do you have a Legal Records Management Team?
Name all of the Team members and the location?
Was the Team involved in this case?
If yes, then explain in detail the extent of their involvement.
Do you use a third-party IT vendor for ESI data capture, storage and archiving?
If so, who and how long have they been used?
Who is the on-site representative for your ESI vendor?
Does your backup vendor use DLT4, LT01 or 4MM tapes?
What type of backup software does the vendor use?
Do they use Backup Exec, NetBackup, Legato Net Worker, Trivoli Storage
Manager, ArcServe, CommVault
Galaxy or HP Omniback?
Describe all messaging systems used by your company.
Do you use Lotus Notes?
Do you use Novell GroupWise or any others?
How is the messaging data saved, backed up and archived?
Do you convert the messages media to any other type of media for storage?
If so, describe the media and how this is accomplished and by whom?
Explain all due diligence programs and procedures used to verify the integrity of
your data?
Explain all due diligence programs and procedures used to secure and safeguard
your data.
Do you maintain custody logs on the transfer of any ESI data?
What type of logs?
Who maintains and where are they located?
Do you have a “Best Practices” guide for of the operations described herein?
Can you produce it?