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Reuters finds loan processor’s problems more serious than CEO said

Tent with "Save Our Home!" sign by Flickr user JacobRuff

Photo by JacobRuff on Flickr.com, where the caption reads, "Save our home, or we sleep in this tent."

Scot J. Paltrow of Reuters dug into court records to see how truthful the CEO of Lender Processing Services (LPS) was when he called legal concerns “overblown” about the company’s use of fraudulent documents in foreclosures. After that comment in late October by CEO Jeff Carbiener, the company’s stock price rose 13 percent.

Scot’s investigation found, however, “that LPS’s legal woes are more serious than he let on. Public records reveal that the company’s LPS Default Solutions unit produced documents of dubious authenticity in far larger quantities than it has disclosed, and over a much longer time span.”

For this story, Scot offered several useful tips, so I’ll break them up into two posts.

Today’s Tip:  “Often you’ll find that what you think is a writing problem actually is a reporting problem. By getting a missing bit of information to fill in a gap in the story, the writing problem goes away,” Scot says.

The challenge Scot says he faced in writing the story was weaving complicated mortgage and legal information into a narrative showing how the story fit into the mortgage and foreclosure crisis.

Much of the information came from Scot’s search of county recorders’ offices around the country. He plugged in the names of specific lenders and loan servicers to find examples of suspect mortgage assignments.

“It was slow work, and when I found examples I needed, I then had to search for another document establishing when the related foreclosure case had been filed,” he says.

It also took a while to develop what he calls, “critical mass,” which is when enough people involved know you’re working on a story and begin to open up themselves, “either because they assume you already know something, or to try to make sure that you properly understand what you’ve learned,” he says

“It often is only at this end stage that some of the most hard-hitting, revelatory information pops out. You then must take the time to take a complicated tale and write a simple, readable, compelling story.”

Coming Monday: How court dockets are your friends.

In Economy, Featured, Investigation, Investing | Banking, Real estate | Econ development.

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