Servicers are Not Servicers: Their Reports Are Not Business Records

Disclaimer: This article is for educational purposes only and not legal advice. Always consult a licensed attorney in your jurisdiction before acting on any information here.

---

The Illusion of Servicing

Companies like Ocwen and others routinely appear in court claiming to be “servicers.” But let’s be clear: they don’t actually perform servicing in the traditional sense. A true servicer is a bookkeeper for someone else—collecting payments, maintaining ledgers, forwarding funds, and handling customer communication.

Instead, what usually happens is this:

• A “servicer” designates a witness in foreclosure court.

• That witness is rarely a records custodian or employee with actual knowledge. More often, they are independent contractors who work from home and whose only job is to testify.

• They present a payment history report, not an actual accounting ledger.

---

Report vs. Ledger

The payment history offered in court is not the servicer’s accounting ledger. It’s a selective report designed to look like evidence of a debt. What’s missing?

• The full ledger showing all transactions from origination to the present.

• Any disbursements to a real creditor.

• Evidence that payments reduced an actual receivable owned by the named plaintiff.

Even if the alleged claimant stepped forward, the report would still not reflect the full general ledger required to prove a real loan account receivable.

---

The Bigger Problem: Who Handles the Money?

In reality, servicers often don’t collect or handle borrower payments at all.

• Payments are sent to an address with the servicer’s name but are actually controlled by third-party lockbox operators (often connected to Black Knight or CoreLogic).

• Deposits don’t go into servicer accounts—they go into accounts owned or controlled by investment banks that are not creditors.

• The servicer only accesses data through third-party computer servers.

This means the so-called “payment history” is generated by a vendor, not the servicer, and the court witness has no personal knowledge of how entries were made.

The real question is: Who receives the money from borrower payments and foreclosure sales? If it’s not the named plaintiff, then the wrong party is pursuing foreclosure.

---

Discovery Strategy

Defense counsel should target the hidden mechanics:

• Demand descriptions and copies of the lockbox agreements that define who really handles payments.

• Ask whether the lockbox operator reports to the servicer or to a third party with no ownership interest in the loan.

• Press on whether the servicer ever touches borrower funds or merely views records produced by someone else.

This exposes the weakness: if the servicer never received or disbursed funds, its records are not admissible as “business records.”

---

Florida Law on Business Records

Under Florida law, hearsay is barred unless an exception applies. The business-records exception (Fla. Stat. § 90.803(6)(a)) requires proof that:

1. The record was made at or near the time of the event.

2. The record was made by, or from information transmitted by, someone with knowledge.

3. The record was kept in the ordinary course of a regularly conducted business activity.

4. Making the record was a regular practice of that business.

Courts have consistently held that a witness must either:

• Testify as custodian of records,

• Stipulate to admissibility, or

• Provide a compliant certification under Fla. Stat. §§ 90.803(6)(c) and 90.902(11).

Without meeting these requirements, the so-called payment history is inadmissible hearsay.

---

The Takeaway

In foreclosure defense, don’t let a “servicer’s” witness smuggle in fabricated reports. Push back:

• Challenge whether the witness has personal knowledge.

• Demand the entire accounting ledger.

• Object that the payment history is incomplete, unreliable, and not a true business record.

Remember: if the servicer can’t show where the money went and who received it, they can’t prove standing or entitlement to foreclose.

Posted in Servicer |