This morning Amazon’s Web Services Group announced the “Amazon Simple Workflow Service,” a strong alternative to LPS Desktop, the core application by Lender Process Services.
Some background: Amazon has a division called Amazon Web Services, well-known in tech circles, where they “rent” servers and server-related functions. It is easy to use and inexpensive.
Amazon keeps adding services besides just renting raw computers: Simple Workflow (SWF) is their latest offering. Other services include computer storage rental, DNS hosting, email server rental (don’t worry; they take precautions to prevent spam) .. their list keeps growing.
I use Amazon’s rental service when I need, say, twenty servers to grind through a set of data. Rather than buying or renting twenty real computers with a few clicks I can do the same from Amazon. My servers are ready within a minute or two, they go away (and so does the cost of maintaining them) after I need them, and it doesn’t even cost much.
Many companies buy hundreds or even thousands of computers as needed. For example, Netflix uses AWS to stream their videos so they can rent the computers at night, when more people are watching TV, without bearing the cost of paying for them during the day.
LPS is the foreclosure processing service that was spun off from Fidelity Title Insurance. They’re the bad-boy of the mortgage servicing industry and seem to get themselves perennially in trouble. For example, LPS is the company that acquired DocX, which employed “Linda Green” and the high-school students signing her name on forged property documents. They shut down DocX awhile ago but still have high-volume signing offices spread around the country.
LPS’ core offering is LPS Desktop that enables workflow, the ability to farm out and track foreclosure related tasks as they grind through the system. Time prevents a full explanation of every problem but LPS Desktop seems, even more than MERS, to be at the core of many of the self-inflicted foreclosure related problems ailing the country.
That makes sense because LPS is inherently conflicted; they offer many of the “services” that LPS Desktop enables. Much like a grocery store is likely to put their higher-profit private label items at eye-level, or charge a premium for other companies to do so, there’s an inherent conflict-of-interest between LPS’ service offering and LPS Desktop that enables banks to “shop” for those services.
Luckily for the country, and not so lucky for LPS, Amazon’s offering seems to do exactly the same thing as LPS Desktop. It’s not “free,” in the money sense, like LPS Desktop is, but it is free from conflicts of interest, unlike LPS Desktop. SWF, like most Amazon web services, is inexpensive and looks easy to implement.
For example, I could probably quickly create an LPS Desktop clone in a short amount of time, especially if I re-purpose the core document review technology in my Find The Fraud application.
Now that this technology exists there is no reason for banks to continue using LPS Desktop.
I was once in a business seminar where some consultants said that the elements of trust are honesty, reliability, competence, and caring. This describes Amazon, and it’s exactly the opposite of LPS.
Servicers should switch to Amazon’s SWF service ASAP. It’s a neutral, conflict-free vendor with a reputation for integrity and competence, to handle their workflow management needs.
I obviously am not a fan of foreclosures: I think they’re costly and oftentimes result from the bad-faith failure to mitigate breaches of contract. Foreclosure is oftentimes a first option when it should be a last option. Still .. it is inevitable that foreclosures will happen. In that case they should be handled responsibly, respectfully, and thoughtfully.
Switching from LPS to Amazon, a neutral vendor, to manage the core coordination, facilitation, and workflow is a good first step to cleaning up the foreclosure process.
Yesterday the New York Times reported that the Missouri Attorney General, Chris Koster, indicted DocX — home of former superstar robo-signer Linda Green — on 137 counts of fraud related to false releases. DocX Faces Perjury Charges in Mo. Foreclosures. Despite the headline the indictment uses the term “Deed of Release” 340 times: this indictment is about people who paid their loans then had their bank breach its obligation — which they were paid for — to mark the obligation as satisfied.
That is, this is the mirror opposite of foreclosure robo-signing: this criminal case is about protecting those who did pay but where the bank, to save a few dollars, didn’t live up to its end of the bargain.
Interestingly, I have a Linda Green signed release myself, on a house I paid off years ago. I’ve asked the bank and MERS to file a perfected instrument and have been told that shouldn’t be a problem; we’ll see. They have been filing corrective instruments in foreclosure-related cases, though not — at least to my knowledge — in cases where people paid off their homes either through refi’s or by simply paying.
It’s a bummer to pay for one’s house then have the bank use teenagers forging the name of a bank “Vice President” who’s sole work history before obtaining that job was as a Clerk in an auto-parts store and who “authorized” teenagers working after high-school to sign her name
Let’s check out loan volume in my home County during the boom and after to get a feel for how widespread this problem could be: