Finding documents to respond to a subpoena is like finding needles in a haystack.

As any firm involved in mortgage processing, servicing, or securitization can tell you, legal discovery and subpoena response is a:

  • Major cost of business
  • Potential risk to reputation
  • Potential source of legal sanctions

Properly responding is hard since it can encompass all electronic data produced by a firm. This can include, among other things, metadata, documents, databases, spreadsheets, “deleted” data, legacy data, emails, text messages, and instant messages, all of which are stored in various storage systems, including archival systems, including tape, microfiche, and more.

A very small subset of examples of the kind of information that can potentially be demanded in discovery includes:

  • Copies of every document signed by a specific officer of the company
  • Copies of any documentation that allows for a given employee to sign documents
  • All manuals on the drafting or execution of foreclosure and mortgage-related documents
  • A list of all employees, dates of hire and termination, and their duties
  • All documents regarding any contracts with a specific law firm
  • Any price lists provided to prospective customers
  • All communications with a specific firm relating property-related transactional documents or records filed in any court
  • All financial transactions with a specific firm

As discussed in “How to Drive the Mortgage Industry Forward” pulling this diverse data together from dozens or maybe hundreds of separate data sources can be a nightmare.

Legal sanctions (for example: Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery; Sanctions of the Federal Rules of Civil Procedure) provide a strong incentive for companies to create comprehensive document retention and retrieval systems before litigation is anticipated as failure to respond in a timely manner can result in summary judgements or instructions from the judge to assume missing responses are unfavorable to the firm.

Solving the Problem

A universal mortgage document or metadata repository should be the backbone of any discovery process in the mortgage industry. See “Building a Universal Mortgage Repository” for a discussion of what a universal repository should look like. To quickly recap, amongst other benefits, a universal repository provides:

  • A single source of truth – consolidated view of ALL the information relating to its mortgages
  • Quick access to new data and new data sources – minimal ETL
  • Support for new data governance and regulatory demands
  • Enterprise data integrity, reliability, and security
  • A complete history of each mortgage
  • Ability to handle many billions of documents
  • Geospatial queries

In order to effectively respond to discovery, a firm’s response team must be thoroughly familiar with what type of relevant information exists, the format in which the information exists, where the information is stored, how accessible the information is. A universal repository greatly simplifies this task.

Master Data Management

Data Governance and Master Data Management (MDM) are an essential backbone for the discovery process. To effectively respond to subpoenas there must be solid document retention and retrieval policies and a thorough understanding of what information exists, where it exists, and how it is stored within the company. Without this it can be difficult to convince judges or subpoena issuers that the response a firm provides is accurate and complete.

A solid understanding of document retention and deletion helps firms, even years later, to explain why some documents are submitted as part of a discovery response and some are not. For example, a universal repository makes it much easier for a firm to understand which documents were available and why other documents were deleted and unavailable to be included in a discovery response.

With data spread over many independent silos it is nearly impossible to create and enforce a rigorous MDM framework. With a universal repository, especially one powered by a flexible database platform, the task becomes much simpler.

Building a Truly Universal Repository

While a document or metadata repository can greatly ease the burden of subpoena response, a repository’s full potential can be achieved when e-mail, instant messages, text messages, voicemail, etc data are all stored in the repository along with the primary metadata or documents. With this level of repository, initial selection and filtering of documents can be accomplished from a single source, and sometimes with a single search or query.

MarkLogic is uniquely capable of handling the needs of a universal repository even with all these different kind of data. For a discussion of how to build a universal mortgage document or metadata repository with MarkLogic see “Building a Universal Mortgage Repository”.

After the Query

After an initial set of documents has been retrieved, it is necessary for attorneys to review the document set to determine which items are required to respond to the discovery. This review step can be enormously expensive.

A universal repository can substantially mitigate this cost by providing a centralized store of metadata on the underlying documents and other data. Attorneys can quickly select or reject documents by scanning metadata on large numbers of documents at once instead of individually examining each one.

Wrapping Up

While discovery and subpoena response is a major burden for firms in the mortgage industry, a Universal Document or Metadata Repository can minimize the costs while improving the accuracy of handling the discovery process. Best of all, a Universal Repository can do this while improving the efficiency of day to day operations and providing the firm with a 360° view of its customers.

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