Preservation Letter and Discovery

The Preservation Letter: A Critical First Step

One way to establish that the records are incomplete is through a preservation letter. A properly drafted preservation letter demands that the servicer or foreclosing party retain and produce all records, communications, and documents relating to the loan.

Once sent, follow up with discovery requests (interrogatories, requests for admission, and requests for production). Together, these tools create a paper trail showing whether the opposing side has concealed or withheld required documents.

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Why This Matters: Incomplete Records = Objectionable Evidence

When servicers present only fragments of the file, they open themselves up to objections under evidentiary rules. In fact, failing to produce full records can suggest concealment of critical defects — such as breaks in the chain of title, improper assignments, or lack of standing.

Dan Edstrom, senior forensic analyst for Livinglies, explains it plainly:

“They are concealing documents they are required to produce, and have an affirmative duty to produce.”

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Legal Duties They Cannot Ignore

There are multiple frameworks requiring servicers and their attorneys to maintain and produce competent, complete documentation:

• National Mortgage Settlement – Requires servicers to send homeowners the evidence supporting the validity of assignments.

• California Homeowner Bill of Rights (HBOR) – Mandates servicers ensure they have competent evidence for the substantial documents used to foreclose.

• Rule 9011 (Bankruptcy) – Attorneys signing court filings must certify that factual contentions are supported by law, evidence, and reasonable inquiry.

• Rule 3001 (Bankruptcy) – Proofs of claim must include the writing on which the claim is based. If unavailable, an explanation must be provided. Failure to attach the writing (or explain its absence) is an omission of material fact.

Each of these rules highlights the same principle: banks and servicers cannot cherry-pick, conceal, or fabricate records to push a foreclosure through.

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Practice Tip

When “business records” are introduced:

1. Object to foundation – Demand proof that the records are complete and reliable.

2. Highlight omissions – Use your preservation letter and discovery record to show gaps.

3. Argue prejudice – Incomplete records prevent the court from evaluating the true facts.

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The Takeaway

The “business records” exception is not a free pass. Incomplete records are not admissible records. By using preservation letters, targeted discovery, and timely objections, homeowners and their attorneys can level the playing field and hold servicers accountable for hiding the very documents that could reveal the truth.

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Tags: BKR, business records, complete docum, Concealing documents, discovery, preservation letter, Rule 3001, Rule 9011
Posted in discovery |